Flight club: online travel firms square up

For years, the travel industry had it its own way - consumers either went to the high-street and waited to speak to a representative, or spent time running up a phone bill. So how has the Web made a difference?

The dot-com revolution allows new companies to get involved in this sector while placing the old school - including even those setting up online - under threat. Expedia, easyJet, Priceline and Travelocity, to name but a few, are all Web-based businesses.

easyJet, the low-cost airline run by owner and MD, Stelios Haji-Ioannou, wouldn't be where it is today without the Web.

"Technology is crucial to the success of easyJet," said Haji-Ioannou. It gives easyJet the ability to run its own reservation system, which cuts out the need to pay for using the big airlines' systems. The company is selling over ten per cent of tickets online and Haji-Ioannou's aim is to increase that to two-thirds by 2002.

The established players now face a dilemma. Do they launch new brands or retain existing ones? Leading tour operator Thomas Cook is injecting £30m over three years into its online arm in an attempt to capture a significant share of this market. But it admits start-ups may have an easier path to market.

David Howard, head of IT at Thomas Cook Interactive, said: "With no organisational baggage, they [start-ups] can move more swiftly than Thomas Cook." Justifying his company's move Howard added: "We would like to do 20 per cent of our business online by 2002 and can do so by taking advantage of our shops, agents and call centres."

Having the bricks-and-mortar in place is one thing but attaching a front-end to an existing system doesn't necessarily provide a seamless operation. Kathryn Bullock, director at industry consultants Customer Solutions, said bolting on a front-end doesn't provide the customer with a decent service. She describes it as almost a waste of time.

She said: "It may be that it takes ages for a reply to an email, you can't confirm it's gone through and you may just end up with a call back in a few days."

She places the blame at the backend, and in particular, ViewData - a system that uses 14.4Kbps dial-up phone lines. She said: "The backbone in place, ViewData, is a dinosaur. There is still too much phone work, faxing and for customer relations to work."

But Ken Fraser, Internet and ecommerce research director at IDC, disagreed. He said: "A stand-alongside system is not a waste of time as long as it doesn't interfere with the system in place."

He claimed a good strategy is to take a group of workers, create a new team and leave them to it. Then by integrating it into the existing setup, a company would be more likely to succeed.

Customers now demand more information than ever before. (The cost of getting to the airport, how to get from airport to hotel, the cost of connections - the list goes on.) If one question cannot be answered, they will abandon an online sale and pick up a phone or - in the worst case - go elsewhere. In this scenario, the whole Web experience is worthless and does nothing to enhance what people think of the medium and ecommerce.

Still, the feeling is that it's better to be on the Net than have no presence at all. But while this has to be done so the viability of existing businesses isn't threatened, customers will only be retained if they are given the total solution, and not just part of it.

And for this to happen, players need to open up and talk to each other, creating a backbone suitable for the 21st century.

For related video items:
'The Travel & Transport Interview: David Howard, head of IT, Thomas Cook Interactive' http://www.silicon.com/a33781
'The Travel & Transport Interview: Stelios Haji-Ioannou, owner & MD, EasyJet' http://www.silicon.com/a27009

Stelios Haji-Ioannou is featured on silicon.com's Agenda Setters 2000 microsite: http://www.silicon.com/AGENDA2000/biog2/10.html