Online distribution channels on the move

Emarketer, a research company, has recently posted 2 reviews on the path of online travel. In the first, They remark that: “A tighter market will exacerbate the fierce competition between online travel agencies and travel suppliers in an already commoditized market.” We believe that indications such as this one, showing that price is recognized by 62% of airline travelers as the most important factor in flight selection (ahead of schedule), show that market comodotization is already there.

In their second review, Emarketer reckon that the pace of online travel growth in US is slowing, and adds the remark that new generation travel tools such as travel search engines and travel communities, are improving the flow of information and make travel decisions by private customers ever more accurate and price sensitive.

Together with these two highlighted aspects, we see a third important indicator. The table on the right (click to enlarge) shows the change in travel distribution channel: away from online travel agencies – on to suppliers websites (airlines, hotels etc).

Our numbers for 2006 show an even faster growth: 59% of travel reservation were booked on suppliers sites in the US, and in EU- mostly thanks to low cost airlines – 64% of the reservations were made in suppliers websites.

As always, we will end with an open question:

If the customers understand that, the travel communities speak about it, and the figures prove it- when will travel search engines start doing the same?

Finding special fares

Some three weeks ago, Farecast announced a new cherry picking service of the best deals available from a list of 26 towns in the US. The idea behind it is to have a computer compare average ticket price to a destination, and try to find a date in the coming future with a significantly lower price. Kayak offers a similar service called ‘Buzz’, based on previous searches made on the same route by other searchers.

Wegolo, a reservation system for low cost flights, offers a ‘hot & cold’ tool that allows customers to search for a low cost flight in European destinations based on their forecasted temperature for your date. Skyscanner, a low cost airlines scanner, offers an entire month (compared with 1 day in most services) fares preview for a specific route, allowing customers with high flexibility to better choose their trip date on a desired destination.

These are all great gadgets, some are even practical. Yet one question must be asked: for your flight- do these services go and find the best price, or do they just find another good fare? Is not finding the best price all the time is the core of travel search engine? If the answer to this question is ‘no’, then what is the core of travel search engines?

Flexibility please

One week since the website launch we handled some 120 requests, coming mostly from our main target audience for this period- Erasmus University students.

From this short taste of customer demand we can identify few patterns:

 

-          Most searchers requested date flexibility, preferably 3 days in each way (the maximum the site enables).

-          About half the requests we received are for transatlantic routes. We had requests varying from Fort Lauderdale and Santiago de Chile to Singapore and even Pakistan.

-          Most customers do not use the free text box we offer to enhance communication with the searchers.

 

We will watch and see if these preferences change with time once we introduce the site to other communities outside the scope of students in The Netherlands.