T hese days, just add dot com to anything you say to the City and the share price will go through the roof.
Airtours shares, along with the rest of the sector, have performed poorly of late, but the City got very excited when it made an offer for US-based travel distributor Travel Services International.
A cheekily titled press release calling TSI “a leading US Internet leisure travel distributor” sent Airtours’ shares rising 16%. Actually, TSI isn’t an Internet business at all, it just does a small percentage of its business through the Web, but there’s no point being pedantic when the share price is at stake.
Thomson and Airtours will, within the next couple of months, unveil their Internet strategies and they should resist the temptation to hype them out of proportion to get a short-term gain on the share price.
To take an extreme example, what would happen if Thomson said it was shutting all its travel agencies, refusing to work with any independents and investing millions in an Internet booking service?It’s share price would rise and its business would collapse.
With a few exceptions, the City does not have a great understanding of the travel industry.
The Internet is going to be hugely important but so are other forms of distribution and travel companies need to have a balanced strategy.
Jeremy Skidmore – editor