MARKET INTELLIGENCE
A ROUND-UP OF THIS YEAR’S TOP NEWS FOR THOSE DRIVING THE BUSINESS OF TRAVEL
ACCOMMODATION:
THE ONE TO WATCH
Be part of the action in 2010 and get into the online hotel bookings sector. MARTIN COWEN reports
There wasn’t much big news from
the online travel sector this year. But
what activity there was, indicated
where the focus will be over the next
few years – accommodation only.
Mergers and acquisitions were
few and far between, with one of
the biggest deals taking place in
the bed bank sector. Last month,
Dublin-based Web Reservations
International (WRI) was sold to San
Francisco’s Hellman and Friedman
for an undisclosed sum, with some
reports suggesting £208 million.
The biggest business in WRI’s
portfolio is hostelworld.com,
a site that shows how online
businesses are making money out
of accommodation: it gives small
independent accommodation
providers access to a reservation
system and global customer base
in exchange for commission.
This model works well in Europe
and Asia Pacific, where most hotels
are independently owned and
operated. In the US, small, familyrun,
bed and breakfasts are usually
part of a franchise network.
The agency model, as it is known
in the online world, is the principle
on which Priceline’s booking.com
has achieved market dominance
in Europe, and the business model
that others are following.
Expedia’s significant move was
launching its Easy Manage tool for
hoteliers to put their property onto
10 | Travel Weekly Active | December 18 2009
“The agency
model is the
principle on which
booking.com has
achieved market
dominance”
Expedia. When Wall Street analysts
were told the news in August,
Expedia chief executive Dara
Khosrowshahi said: “This will give
booking.com a run for its money.”
Elsewhere, ebookers re-emerged
with a focus on hotels. Its European
point of sales moved onto the same
platform as its US sister company
Orbitz at the start of the year, and
‘Hotels are a
sweet spot
for online
agencies,’
says Ian
McCaig
it started to introduce proven
initiatives from the US into Europe.
Another one to watch is
laterooms.com, part of TUI Travel.
Its focus is on the UK, although
it launched a number of local
language sites in Europe this year.
TUI Travel chief executive Peter
Long signed off the purchase of
laterooms.com in December 2006
when at First Choice, and while
£120 million seemed a lot, he has
got most things right so far.
Lastminute.com chief executive
Ian McCaig summed up the appeal
of hotels at World Travel Market.
“The sweet spot for online agencies
is hotels,” he said. “It is the most
under-penetrated online segment
in Europe. It’s the fastest-growing
sector and the yields are good.”
More business commentary and market intelligence on www.travolution.co.uk
www.travelweekly.co.uk
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