Travel bug bites in cyber site explosion

By PETER GRIFFIN IT writer

As the last of the holidaymakers return to the office this week to clear their voicemail and the backlog of work piling up on their desks, many will be reviewing the experience of booking and paying for their summer exploits online.

For a growing number of New Zealanders, the groundwork in planning a local or overseas trip begins on the internet. Where once we would have popped into our local travel agent to lift a few glossy brochures relating to our dream destinations, now we are logging on, and becoming better-informed travellers as a result.

With the emergence of sites such as www.travelintelligence.net and www.travel.roughguides.com, the amount of useful and free travel information on the internet has exploded. Regular travellers are finding forums to impart their travel tips and experiences. It's bad news for travel writers but a goldmine for tourists wanting to know where to find the cheapest tour operator or which hotel offers the best view.

"What sites should we absolutely hit in New Zealand?" a South Pacific-bound couple ask on a message board at the travel website www.fodors.com.

An answer, one of several, comes swiftly via e-mail: "South Island for sure - don't miss the Pancake Rocks and in Christchurch, take in the Wizard. North Island - I liked Rotorua but our travelling partners couldn't stand the sulphur smell. The wineries are great. You just can't go wrong in NZ - it is a great country with great people. Cheap too. Have fun."

With tips like that and a host of home-grown travel retailers offering online booking and payment, the traditional middleman in the process, the travel agent, faces the prospect of slipping further down the food chain.

Bob Offutt, vice-president at Sabre Labs, the department of Sabre responsible for designing the travel reservation software utilised by a third of the world's travel agents, says consumers are going online for a more rewarding experience and to take advantage of discounted travel.

"As travel agents try to reduce their costs, the cadre of experienced agents who understand the destination you want to go to, who will give you pointers based on personal experience, is diminishing."

Mr Offutt, in New Zealand last week to meet staff of Sabre Pacific, has been at the forefront of designing systems that make online travel purchases a fast and painless experience.

"The internet created this sense on the part of the consumer that, no matter where they go, there's a lower price somewhere. Ten years ago you went to a travel agent and you expected them to get you the lowest price," says Offutt.

Sabre, which has stakes in the popular websites Travelocity and Virtuallythere, is taking online travel a step further with new software developments, integrating mobile devices into the process. A sneak preview of developments soon to come out of Sabre Labs includes a system allowing travellers to check in at the airport with their mobile phone and receive an electronic boarding pass in the form of a bar-coded text message.

While Sabre claims it is not out to disenfranchise travel agents - who, after all, form an important part of its business - the online revolution is one the travel agents have to accept or they will "disappear," says Mr Offutt.

With online travel business generating more revenue than any other segment of online retailing, a period of consolidation seems likely as independent travel and accommodation sites face competition from travel portals set up by the airlines. New Zealanders can now choose between booking a flight at an independent portal such as travel.co.nz or through an airline site such as Air New Zealand.

The emergence of airline portals such as Orbitz shook confidence in online travel giants Lastminute and Ebookers as it became obvious the airline portals could use their significant cost advantage to undercut prices.

The reality is more complicated. Airline-branded tickets are rarely sold at discount prices. Instead, slow-selling seats are sold through independent portals to avoid devaluing the airlines' brands. The independent sites therefore have a necessary place in the market and most have strong relationships with the airlines.

Greg Southcombe, managing director of travel.co.nz, says a substantial amount of Air New Zealand business goes through his website, which allows customer contact outside business hours as well.

"Around 42 per cent of all inquiries at the site take place after 5 pm and before 8 am. For us it's a million brownie points in the bank when our people reply at night."

The website, which notches up more than 100,000 page impressions each month and will soon launch a section on cruises, has eased thousands of travellers into the online environment, but does not truly conform to the e-commerce model: it does not take online payments.

"We don't accept online payments. We can do it, but it complicates the transaction earlier on. It would alienate people," Mr Southcombe says.

Online travel is by no means limited to globe-trotting tourists. Large corporates are also being given the opportunity to slash their travel expenditure. However, there is debate over how rapidly corporates are making the shift from a dedicated travel agent to placing business with an online retailer.

While travel.co.nz reports $6.5 million in revenue from corporates last year, others have found the online opportunities not as significant as is often made out.

Murray Watson, managing director of Auckland-based GlobalPro International, a corporate travel and expenses software developer, says the hype surrounding online travel has obscured its real value.

"Online booking systems are not a focus for us. It's not worth our while delving into that area."

Instead, GlobalPro, which manages travel and expenses for a number of corporate clients, including Farmers Trading and AMI Insurance, claims interaction with a travel agent remains vitally important. It believes the actual proportion of flights booked online may be as low as 4 per cent.

GlobalPro's software links office managers responsible for travel arrangements with travel agents and international reservation systems run by the likes of Galileo, Sabre and Amadeus. The company claims it can handle the administrative costs on annual travel expenditure of $1 million for $30,000.

"For every dollar spent on travel, 25 cents is spent on administration," says Mr Watson.

As users increasingly travel online for both business and pleasure and the security of electronic transactions becomes less of an issue, e-travel merchants may be the strongest proof that the business-to-consumer e-commerce model really does work.]

Links


Herald Online Travel

Travel intelligence

Rough Guides

Fodors

Travelocity

Virtuallythere

travel.co.nz

Air New Zealand

GlobalPro

eflights

Expedia

Sabre Pacific