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It's no wonder then, that new players are jumping in for a piece of the pie. Of the 10 top French e-tourism sites in July, only one, Nouvelles Frontières, was a traditional brick-and-mortar travel agency, according to NetValue, an Internet market-research group. And according to Forrester Research, pure e-travel agencies already control 25% of the e-travel business. "The relevance of the offer is what is important on the Internet, not how long the company has been in business. Clients are interested in finding the lowest price. They are less attached to brand names and [are willing to] explore [a number of] sites," says Bernard Ochs, vice-president at NetValue. This redistribution of roles in the travel business marks the beginning of a high-stakes battle in Europe among traditional travel agencies, new e-travel agencies, and even airlines for control of the growing and lucrative market. Already in 1999, more than 27 million European Web users looked for travel information on the Internet, according to travel monitor IPK International, and nearly 6 million reserved and paid for their trips online. Forrester predicts that 9% of all travel purchases in Europe will take place online in 2005, representing $35 billion in sales, compared with $860 million in 1999. According to Benchmark Group, e-travel represents 47% of all e-transactions in France. But whoever wants a stake had better act fast. "In six months to a year, the roles will be defined in France. By then, it will be too late to launch a new brand," says Abigail Leland, an analyst at Forrester. AIR BATTLE. Traditional travel agencies are, therefore, eager to move their businesses onto the Web. Like Nouvelles Frontières, other French agencies like Club Med, Fram, and Havas Voyages are creating Internet sites. So far, however, only 3% of Club Med's sales come from its Web site, created in June, and Fram has not yet included integrated reservation and payment methods on its site. But travel agencies are optimistic, and most French agencies expect 10% to 15% of their sales to come from their sites by 2005. What's more, Leland predicts that traditional travel agencies have a good future, since basic purchases will occur on the Net, but more customized and expensive trips will continue to be handled by travel agents. The battle for control of the e-travel business is bound to get more fierce as airlines jump into the game. Simple flights make up 60% of the travel business as a whole and 80% of e-travel. For these types of trips, e-travel agencies essentially handle basic queries for destinations and travel dates. And they get answers by consulting airline databases provided by companies like Sabre, Amadeus, Galileo, and Worldspan. French e-travel agencies like eBookers, Anyway, and Go Voyages depend largely on these databases to meet customers' needs. But when Europe's 11 major airlines (which include Air France, British Airways, Lufthansa, KLM, Alitalia, Iberia, SAS, Aer Lingus, Austrian, British Midland, and Finnair) come together to create their own online distribution of airline tickets, similar to Orbitz.com in the U.S., e-travel agencies will surely suffer. Indeed, airlines want to control ticket distribution and count on "capturing a significant part of Internet travel sales in Europe within two years," says an Air France spokesperson. LINKING UP. To keep their edge, e-travel agencies plan on adding other services to their Web sites. One such improvement will be the addition of organized tours, for example. Already today, all e-travel agencies have call centers that offer personalized advice to Web users. The arrival of high-speed Internet connections and the increased sophistication of software programs will also allow for improved search tools and a better presentation of travel offers. But that may not be enough. Airline Web sites already have a centralized system that offers a more complete global set of services than those offered by e-travel agencies. And as more travelers look for specialized and complex trips, the "clicks-and-mortar" combination of both an Internet site and a network of agencies could prove to be a winner. Players are positioning themselves as the battle intensifies. French travel agency Accor has recently bought a 38.5% stake in e-travel planner Go Voyages. In another move, e-travel agencies are linking up. In July, Britain's Lastminute bought out France's Degriftour. Consolidation may be the solution to gaining market share, but one business model has yet to prove its superiority over the others. Until that happens, no one is guaranteed a top spot. By Anaïs Jouvancy Translated by Inka Resch |
