Travel-agent websites fight back

by Jemima Bokaie Marketing 07-May-08, 09:30

LONDON - Opodo is launching a campaign to promote its latest range of web tools, which are intended to differentiate the pan-European brand in a saturated online travel agency market.

The six tools include MyAirline, which enables users to compare the price of flights on their chosen airline with the average price for that date across all carriers, and EscapeMap, which pinpoints holiday suggestions on a map along with the price of relevant flights.

In the online market there has been a shift away from intermediary services, such as Expedia and Ebookers, toward direct sales. Growth has slowed across the sector as a whole.

The surge in high-speed broadband penetration in Europe has combined with suppliers' ability to take control of their own inventories to dent the competitive edge that online travel agencies once enjoyed.

British Airways' direct business was its fastest-growing channel last year, accounting for 50% of leisure sales, according to the airline. It attributes the growth to its revamped website, ba.com, which was overhauled in 2006, specifically to bolster online sales.

Moreover, European online hotel bookings via hotel-branded websites grew by a third between 2004 and 2007 to reach E4bn (£3.1bn), according to PricewaterhouseCoopers. This compares with bookings via online travel agencies, which increased 20% to E4.9bn (£3.8bn) over the same period.

In response, aggregator sites are beefing up their exclusive content in a drive to differentiate themselves and are boosting their marketing budgets to promote their added functionality.

Sales and marketing costs at Priceline rose nearly 50% between 2004 and 2007 and at Expedia they accounted for 35% of net margins last year.

Opodo, which launched in the UK in January 2002, is spending £10m on marketing this year, a year-on-year increase of 20%, and will focus its advertising on boosting the brand's image. The company recently appointed digital specialist The Search Works to manage its search marketing as it looks to drive online sales.

Supplier sites are also investing in their online content. Last month easyJet announced plans to relaunch its booking site as an 'intuitive travel portal' capable of helping consumers choose their holiday destination.

The revamped site will use technology that recommends destinations based on selected criteria such as budget, dates and activities.