Competition is all around you
March 6, 2008
I’ve written before on the landscape of OTA and media companies which is getting more competitive everyday. But also the field of touroperators, airlines and hotelchains is getting more competive. At the PhocusWright conference at ITB John Kohlsaat, 
General Manager for Germany, Central Europe, Baltic and Denmark, of easyJet Airline Company made some comments on that matter. Easyjet, which is the 4th largest airline, is moving ahead fast. From flight only, they have added hotels, transfers and travel services to their offering. This will cause great problems for touroperators. They don’t own the capacity and will have to add value to it, to be profitable. The website that Easyjet uses for this is Easyjetholidays.com. It sees it as a revolution to the package holiday market. As customers are booking more and more direct at airlines and hotelchain websites and are being able to add other travel offerings to it, touroperators should be aware. Future will tell how fierce and bloody this battle will be.
In a few hours I will be heading back to the Netherland. The conference has been very interesting. The bloggers summit as well, great meeting all the bloggers 
from around the world. ITB was big, colourfull
and with great hotdogs!
Second Day @ PhoCusWright ITB - OTAs Speak Out
March 6, 2008
An interesting session with the leaders of some of Europe’s leading OTAs including: Alan Josephs, MD ebookers.com, Ignacio Martos, CEO Opodo, Ian McCaig, CEO Lastminute.com, Jens-Uwe Parkitny, VP & MD Expedia.com Gmbh, Javier Perez-Tenessa, Founder eDreams Inc. During the session Philip Wolf conducted an informal survey to determine whether the audience felt that the OTAs were doing a good job of differentiating themselves from each other. The resounding response from the audience was that they were, infact, NOT doing a very good job of differentiating themselves. So what can the OTAs do to make themselves different from each other? Not surprisingly, none of the OTAs had an answer to this question. Why is this? In my opinion, the question of differentiation implies that the underlying business models are different, and since all the OTAs share the same underlying business model then there is very little they can do to truly differentiate themselves.
So the question was asked whether or not the tabs that are viewable across all the OTA sites will change over the next few years. Again, the answer to this question was “NO” because the model supports the products that currently exist. When presented with the change in interface that Starwood had created for their Fourpoints Hotel brand, Mr. Martos stated that if Opodo only sold one specific product then they might be able to remove the tabs, but the types of products sold through OTAs is too complex for a simple interface, like the one used on Fourpoints.
When presented with the growing trend of experience based searching and integrating the dreaming and planning process into the OTA booking process, Mr. McCaig and Mr. Parkitny both talked about how their brands are trying to do more to build out experiential search into their brands. Mr. Josephs however questioned whether there was true value to the customer of providing non-monetized destination content along with the bookable content that ebookers provides.
The question of monetization was a particularly contentious one and all the OTA leaders seemed to have varying opinions regarding the issue of monetizing the traffic that visit their sites. While some, like Expedia, are already starting to move towards a mixed monetization model of providing pay per click as well as commission based bookings, other OTAs like ebookers had no plans to move into the mixed model and seemed to be reluctant to drive traffic away from their sites to their suppliers.
So what new technologies can we see from OTAs moving forward. Given the undeniable move to more social media, the impact of blogging, and the demand for customer reviews, we can start to see that OTAs will have to start integrating more of these social components into their sites. Expedia’s purchase of TripAdvisor is one example of how OTAs are purchasing and using social components to increase their penetration. Can we expect to see more travel social networks to sell to the big OTAs? Quite likely, given the amount of money that OTAs have. Will consumers support social networks that are purchased by OTAs and will they maintain their bias free status once purchased by an OTA? That remains to be seen. I would hope that they would try to keep the social components as separate as possible to maintain their perceived independence, but only time will tell.
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