Travel Industry`s Holiday Price War Goes into High-Tech Mode

4th Jan 2001

It is New Year`s Eve, so what is next on the agenda? The travel industry`s annual battle to see which company can get most summer holiday bookings in the can, of course. Only this time, it has all the signs of a full-scale war.
You can hardly have missed the dozens of travel company TV commercials enticing us to book a couple of weeks in the sun without delay. The twist this year, however, is that the travel organisations have joined the fray in a major way, hoping no doubt that all those computers given as Christmas presents will be put to good use by people eager to practise their skills by scouring the Web for holiday bargains.
And not content simply to follow the UK`s high-street travel agents with such offers as free holidays for children, free or cheap travel insurance and the like, they are going all-out with an aggressive campaign to prove that theirs is the travel-booking method of the future. If this means sparking one of the fiercest price wars the business has seen for some time, that is just too bad.
The opening shots were fired on Boxing Day morning when TheFirstResort, which claims to be the UK`s biggest online package holiday retailer, announced it would undercut any like-for-like holidays departing between 1 May and 31 October by 20 per booking providing you reserve by 31 January.
Not only that, but if you book a selected holiday from those featured by the country`s biggest tour firms, including the Thomsom Travel Group, which, together with Channel 5 and Netdecisions happens to own a chunk of TheFirstResort, you will get two-for-the-price-of-one at a number of resorts in Spain and Greece, saving up to 400, says the company.
Such discounts can be offered by online travel retailers because their costs and overheads are lower than those of high-street travel agents, they say. Certainly they do not have to pay rent for hundreds of shops and perhaps can make do with fewer staff than conventional travel agents, but haven`t we heard some of this before?
Not long ago, direct-sell tour operators were making similar claims, arguing that because they did not have to pay commission to travel agents they could offer deep discounts instead. What many overlooked was the fact that the high- street travel agency network is still one of the most cost-effective distribution systems in the industry. Bypass the agents and the commission they would have been paid is replaced with the cost of staffing large call centres and posting bulky brochures to people who may have no intention of booking a holiday. Which perhaps explains why so few of the mass-market direct-sell firms survived, although there are still plenty of small specialists.
Online firms also argue they are cheaper because they do not have to distribute brochures because people can examine offers on their computer screens, view video footage of hotels and resorts and pay all online.
Travel agents may take a different view, arguing that while a computer screen may be perfect for booking, say, a point-to-point cheap flight, people shelling out large sums on their annual break prefer to discuss their requirements with a human travel adviser. And they may have a point.
Whatever method you use to book your holiday, remember that this is just the beginning of one of the most marked buyers` markets for some years. Book now if you must and take the best discount you can get, but if you want to save serious money, wait a few weeks, by which time many predict that half the prices quoted in brochures will be the norm.


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