Cheap clicks: but can the online travel world cope?

Published at 11:30 AM on 14 December 2006

The online travel industry could be heading towards a serious slow-down due to consumers’ desire to hunt for the cheapest priced holiday, according to the latest research by PricewaterhouseCoopers LLP. The ‘Hospitality Directions Europe’ report into online travel industry suggests that this shift in the industry means that the strategies adopted by online travel agencies to build the industry may no longer prove successful. David Trunkfield, director, PricewaterhouseCoopers LLP, comments: “In the online world, people don’t care who they buy from, so long as they are getting a cheap price. If businesses don’t get their price right, consumers will go elsewhere. It is as simple as that. “Online travel agents are not yet providing sufficient differentiation in their offering, so it is not surprising that consumers are simply looking at the cheapest price – because to them everything looks the same.” The growth in broadband now means that people can compare prices more easily. David Trunkfield also warns that online agents need to know their customer even better now as they increasingly hold more power. “The market is becoming more competitive and it will be those agents that can attract customers to their sites, keep them on their sites and then convert clicks-to-trips that will have the competitive advantage. “Providing different, unusual products, bundling various offerings together, delivering exclusive content to consumers on a number of online platforms will all contribute to a strong business model for the future.” Findings from the research also indicate that online agents need to focus on hotel content in order to provide some of this differentiation. Agents that become destination specialists with a greater range of hotels will be the big winners. David Trunkfield, PricewaterhouseCoopers LLP, suggests that those agents that adopt a supplier-friendly approach to negotiations with hoteliers will be at an advantage. “Online travel agents that can work with hoteliers on yield and occupancy can get exclusive or increased inventory.”

For more information contact:

Sian. Mannakee
Technology, Telecoms, Entertainment, Media, Hospitality and Leisure, PR Manager, PwC 
Tel:020 7213 2538 
Mobile:07715 484 884 

David Trunkfield
Partner and head of Gaming, PwC 
Tel:020 7804 6397 


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