The travel channel

Online reservations are allowing customers to book their entire holiday without leaving the comfort of their sofa. Brid-Aine Conway asks who this sales route is reaching, and whether this will leave retail travel agents behind.

There's no doubt that online booking is another of the internet's killer apps. In fact there's so little doubt that the International Air Transport Association (IATA), decreed that all airlines had to move to e-ticketing by May 31 this year. What began with the budget airlines has moved into the mainstream and tourists can now sort out their holidays from anywhere, at any time.

The move online, in conjunction with renewed competition in the shape of budget airlines, has brought far-flung destinations a lot closer for a lot more people, and this in turn has prompted more hotels, and more competition between hotels, meaning lower prices. This is obviously good news for the prospective traveler, but the industry is also seeing benefits from online reservations.

 

"From the airline's perspective, they can certainly reduce the cost of using a travel agent and distribution, for the passengers, they also want to shop for the best price. So airlines and consumers are both trying to reduce this intermediary, which is increasing their costs," says Hani El Assad, regional VP for the Middle East and Turkey at airport industry IT provider SITA.

Suresh John, managing director of India-based Intellect Data Systems (IDS), which provides central reservations systems to hotels, agrees: "The first benefit is dis-intermediation - there's no intermediary who's going to come in between playing the role of a consultant. What this means is you save costs. Any intermediary slows down the process of your booking and costs you money - that extra percentage he will charge."

When people book through a travel agent, both they and their hotel or resort are paying a percentage that goes to that agent. The online channel cuts out the man-in-the-middle, reducing costs. This equation would seem to equal the end for high street travel agents, but the industry is not so sure.

"I think they compliment each other, I don't think that one will really take the lead over the other," says Eric Bezard, MEA senior business solutions manager for Amadeus. "I think the revolution is clearly moving online, it's a channel that didn't even exist a few years back. When you look back to 20 years ago, the online channel was not even live, so in the last 20 years it's been really fantastic in terms of evolution - I mean who would have thought it would happen like this!

"But it will not, and I'd say it will never, replace the face-to-face relationship that a professional can have with his customers. The online channel will allow the travel consultant to focus on added-value services so it's an opportunity rather than a threat," he adds.

Shanjose Netto, IT manager at Millenium Hotel Sharjah also feels that online is just getting started: "I think this online revolution has started very recently and if you look at my hotel the total last year of room nights from online was 5.7% and almost 40% was from agents. So I think the online is catching up but I think since the agents are dealing in better packages, they still can hold on if they start providing better services and even cheaper rates.

Etihad Airways actually launched a number of physical travel stores recently, according to Jeremy Willmott, senior manager of digital strategy at the airline, who feels that the retail channel is a proven one that still has a place in the tourism industry.

"The popularity of the travel stores and the volume and the wide demographic we've got coming through them just shows that through all walks of life and all age groups, there is a segment that wants that personal touch. Particularly as you move up the luxury scale, there's people who are going to want more full service than self service," he asserts.