Clash of the Titans

A WAR of words has broken out between TUI and Lastminute.com over the success of global distribution system suppliers snapping up online agencies.

At the Eye For Travel conference in London this week, TUI group corporate director of strategy Thies Rheinsberg dismissed the “forward integration”of Sabre, Amadeus and Cendant as a waste of time.

Amadeus now owns a 74% stake in Opodo after originally taking a 55% stake last year.

Cendant bought Ebookers earlier this year, while Sabre owns Travelocity and is on the brink of buying Lastminute.

Rheinsberg argued the online agencies are being squeezed by traditional operators and new travel search websites and said the vast majority of consumers want content which the traditional operators own.

He also claimed customers trust online travel search portals more than online agencies and that consumers will use these websites to compare prices before booking direct.

“In the US, online agencies have dominated, with 80% of online sales through the Internet agencies and only 20% with suppliers. But this year the lines will cross and direct supplier sales will outstrip those through online agencies,” he said.

“Content is king and the search engines are seen as far more neutral than online players.”

He slammed the GDSs for competing against their traditional customers.

He said: “How do they explain to their traditional customers, the high-street travel agents, that they are now competing against them?”

Hoberman, who has agreed to sell Lastminute to Sabre in the latest of the forward integration deals, hit back.

He said: “More than a third of our business is through agents. Travel agents want deeper content which is what the GDSs can offer.

“Search engines are over-hyped. They make a commodity of the product which is no good for anybody. No search engine can pull together dynamically packaged prices. They use old data and their sales conversion rates are appalling,” he said.

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