KEY POINTS:
The travel industry is getting a shake-up with some new arrivals, a departure and a rapidly growing online customer base.
And the big changes are not over yet, according to some major players.
US heavyweight Expedia launched its New Zealand website last week, while a new local player
Mondo has just opened its first stores and online agency Zuji announced it would shut down its local online site.
Expedia New Zealand and Australia managing director Arthur Hoffman said the travel market here was worth about $25 billion each year but only about 5 per cent was done online, compared to about 60 per cent in the UK and US.
"The penetration of internet in general across the market ... is just shy of 80 per cent, which is very high compared to some other Asia Pacific markets and with high credit card penetration you would expect the [internet] travel market to be actually bigger in its size than it currently is," Hoffman said.
The online share of the market was expected to grow by about 27 per cent year on year, he said.
"I think this market shows a great potential to shift more and more travel from offline to online."
Mondo also had travel consultants available by phone.
Meanwhile, online travel company Zuji has ended an agreement with Stella Travel Services to deliver its local website, which will close down on November 30.
"It is very much a space that is extremely competitive and still evolving into a more mature online market and I don't think it will stand still in the next couple of years either." Hoffman says.
Mondo, the retail travel agency division of Flavour Travel Group, opened its first stores this month.
Group managing director Digby Lawley said the launch was a response to market demand.
"Research has told us that customers are looking for guidance and expect their travel agent to be knowledgeable and, if they don't know something, to find it out," Lawley said.
House of Travel retail director Brent Thomas said there had been some significant challenges in the industry during the last few years and the number of travel agencies nationally had dropped from about 800 to about 450.
Some operators had not been able to adjust from a previous environment where significant income came from supplier commissions, Thomas said.
"We've always said that we believe from a transaction point of view 50 per cent of our volume will come from online long-term, he said."
The internet now accounted for a third of House of Travel's enquiries, with more than half of domestic travel bookings made online.
However online booking was more suited to simpler itineraries and point to point travel, more common in places such as Europe.
"Even something as simple as the Gold Coast - a retail consultant who understands the product and understands the customer really well can add a huge amount of value by having a consultation," Thomas said.
"We can't pick and choose when we want to have a relationship with the customer we have to be with them through all channels."
Travel Agents Association of New Zealand chief executive Paul Yeo said in global terms New Zealand had a high percentage of travel agents per head of population.
"We're very big travellers and so we're very well served so you could argue there's some more consolidation to come," Yeo said.
"You'll end up with perhaps more niche travel agents who specialise in certain types of travel ... and you're going to see more development of online travel agencies."
