Who is winning the web war?
Travel Trade Gazette had a recent article reviewing research by Euromonitor telling us, amongst other facts, which are the top online travel companies in the UK. Just for the record, they list them as:
1. TUI Travel
2. Thomas Cook
5. Travelocity.com (a subsidiary of Sabre that owns lastminute.com.)
This got me thinking about a couple of questions: What might it take to be a winner in the web war and who are the winners beyond the obvious top 5?
Let’s get back to business fundamentals, whether your company is online or not, the winning formula is still the same – you need to generate profits. You will achieve this in two ways; firstly by making your business cost efficient and secondly by competing more effectively in the market than your peers. Cost efficiency is to a great extent about automation. To compete more effectively is about having the right products and being able to bring in customers without spending too much on marketing. That latter point incorporates customer relationship management, high levels of service and other activities that keep your existing customers coming back for more – far cheaper than winning new customers.
How does this translate to the world of the web? The online world lends itself to automation. I remember sitting at a console with the MD of a wholesaler business. We sat there watching the screen as travel agents logged in and booked product. The system connected to hotels and bedbanks to fulfil the bookings and confirmed them back to the agents. All we had to do was sit and watch. It was all fully automated. A wonderful example but there was a high cost to develop the systems needed to do this.
That is the problem. The high costs of automation are more affordable if spread over a large customer base. This favours larger, high turnover companies typified by Euromonitor’s top five. You will see this in the sophistication of their websites, their increasing success on mobile and the move towards personalisation and ongoing contact programmes. For the largest travel companies, this is all affordable.
However, there are plenty of excellent travel technology suppliers who can provide automation to smaller and medium sized companies at a reasonable cost; so if you are not a TUI or a Thomas Cook you can still compete to a good extent on cost efficiency.
To compete more effectively in the marketplace you can either be so cost efficient that your company undercuts the competition – the big is beautiful strategy – or have a product/service that has special appeal, positioning your business in a small niche where competition is light. This is where the web war can be won by smaller companies.
There have been some innovative travel businesses launched which, due to their new approaches to the market, have had little apparent competition. Many innovative businesses fall by the wayside but some, such as Airbnb or Gogobot, go on to succeed.
Nevertheless, smaller companies don’t necessarily need to be innovative. They can specialise, be experts in a particular field, for example, diving holidays, singles, destination specialists. Customers will seek out specialists as they will likely have better product knowledge than the generalists. Also, search engines favour specialist websites. This means it is possible for smaller companies to build a good online presence without it costing a fortune.
With all this in mind, here are my web war winners. In no particular order:
- Large travel companies that can afford to develop sophisticated technology and continually test and hone their websites.
- Small, specialist travel companies that work hard to build a reputation as being experts in their own product area.
- Technology providers that offer comprehensive, affordable systems that allow travel companies to successfully compete online.
- The search engines and Google in particular, who are raking in the travel industry’s online marketing spend.
- The better SEO (search engine optimisation) and social media agencies that can show a track record of bringing success to their clients.
- Good SEO and social media experts who are like gold-dust.
These are my winners, who are yours?