For airline tickets, tours, vacations and cruises, customers can look and book. Once they’ve surveyed the options on-line, they contact the firm’s call centre on a toll-free number or send an e-mail.
It puts Vancouver-based Uniglobe.com Inc. in the midst of the pitched battle for consumers’ travel bucks. Martin Charlwood, chief executive officer of the Internet company, says the Web site has been set up to compete with Expedia.com, Microsoft Corp.‘s travel site.
But parent company Uniglobe Travel is a franchise organization. With services available through the Internet, why would anyone take the trouble to walk into one of its 1,100 worldwide outlets?
That’s the tightrope that travel franchisors are walking these days. They must build an Internet presence to capture their share of this fast-growing travel segment. But in doing so, they risk competing directly with their own bricks-and-mortar outlets.
The stakes are high. The U.S. Travel Industry Association says that 6.7 million people booked reservations on the Internet last year.
It would be absurd for franchisees to set up stand-alone Web sites. The competition is intense. So franchisors must take the lead, build top-notch sites with the best technology, and promote and manage them. And that heightens the potential rivalry with franchises.
Uniglobe’s Internet sales started at $1-million in 1997, grew to $10-million in 1998 and exploded to roughly $100-million last year, or about 5 per cent of the system’s gross sales worldwide. Gary Charlwood, Uniglobe’s founder (and Martin’s father), has predicted Internet sales of $1-billion by 2002.
Franchisors are dealing with their dilemma in different ways. At Uniglobe, franchisees can promote their own Web sites, which reside on the Uniglobe site at a “uniglobe.com/agent-name” address.
Franchises get 30 per cent of their usual commissions on sales generated from their own customers. Meanwhile, Uniglobe.com performs the order fulfillment: printing tickets and travel itineraries and sending them to customers.
Despite initial concerns, most franchisees are pleased with this arrangement, says Joanne Sigurdson, a Winnipeg franchisee and president of the Uniglobe Franchise Owners Association for Western Canada.
Fulfillment is the most expensive part of the job, she says. Getting a share of Internet revenue streams, she adds, is the best outcome franchisees can get, other than having their own Internet booking engine.
Nonetheless, it’s a compromise. Customers must remember to use the agent’s address—and franchisees get no share of the new Web-only customers.
Martin Charlwood doesn’t see this as a problem. If a regular customer isn’t showing up in a franchise’s sales, the owner is taught to ask what’s happening, he says. “If [the customer] just forgot to put the ‘agent-name’ in, they just let us know and we credit them.”
Franchisees’ piece of the Internet action is proportional to their efforts, he adds. “It’s just a matter of making sure that franchisees get their fair share of Internet sales, but they have to go out and market the service to make sure they’re getting credit for what they’re doing.”