Online travel agent threatens price war

Online travel agency The First Resort is set to spark a holiday price war in the new year by pledging to undercut by £20 any travel agent offering the same summer holidays.
The agency, which has 10m holidays on its database, is trying to boost sales at a time when there is growing scepticism about the online booking market.
The First Resort, in which tour operator Thomson owns a 30% share and Channel 5 a minority stake, is deliberately launching the deal in January - the peak holiday booking period.
Matthew Prior, The First Resort managing director, said: “We are looking to shake up the travel market with the first ever price-beating promotion on summer holidays.”
The brand will run heavy TV advertising and programme sponsorship during Channel 5`s Christmas Day and Boxing Day schedules. It is believed to be the first time any company has guaranteed to discount every holiday on the market.

The company`s gamble comes just days after British Airways pulled the plug on Project Quicksilver, its internet portal aimed at Executive Club members.
Meanwhile the share price of high-profile leisure brand continues to fall. Forrester Research said it was downgrading growth in the online travel sector.
Analyst Shobhit Kakkar said earlier forecasts of £4bn of online bookings by 2005 were “over optimistic”.
He expected only £600m of holidays to have been booked online by the end of 2000.
Forrester says that while 7% of UK consumers have booked flights online, only 2% have booked holidays in this way.
The First Resort said it will undercut like-for-like holidays departing between May and October 2001 and booked by 31 January, by £20 per booking.
Despite being branded an online agency, Prior said almost all The First Resort`s holidays required a phone call to an operator and that it was now repositioning itself as a “multi-channel travel agent”.