(Originally published in TOURISM)
TravelMole's Bev Fearis reports that the balance of power in the online travel market is shifting from online agencies to suppliers, according to PricewaterhouseCoopers LLP.
The consultancy group says over the past 12 months, online travel agents have lost their competitive edge while suppliers have been able to take control of their inventory and make use of high speed broadband internet connections. Airlines and hotels are in a strong position in a market where price and convenience are still the crucial differentiators, the group believes.
Malcolm Preston, partner and travel sector leader explained: "Suppliers are now providing the lowest-cost bookings available on the internet. Those suppliers which have sufficient scale will continue to see more and more bookings made through their own sites. It's the smaller operators that will become the key clients of the aggregators."
Preston says loyalty schemes for hoteliers and reward points for airlines are proving to be very successful and provide the online supplier with another advantage over aggregators. "Aggregators struggle to provide anything significant to ensure customer loyalty. Discounts are one option but this comes directly off the bottom line. If they want to give a free flight, they have to first purchase it from the supplier."
PricewaterhouseCoopers LLP believes all online travel players will need to be more creative in the future, for example expanding into theatre tickets, restaurant bookings and theme park entry for example.
Its findings are published in a new report, called "The Distribution Revolution: the growth of supplier-only sites has been at the expense of the online aggregators".
TravelMole's Bev Fearis reports that the balance of power in the online travel market is shifting from online agencies to suppliers, according to PricewaterhouseCoopers LLP.
The consultancy group says over the past 12 months, online travel agents have lost their competitive edge while suppliers have been able to take control of their inventory and make use of high speed broadband internet connections. Airlines and hotels are in a strong position in a market where price and convenience are still the crucial differentiators, the group believes.
Malcolm Preston, partner and travel sector leader explained: "Suppliers are now providing the lowest-cost bookings available on the internet. Those suppliers which have sufficient scale will continue to see more and more bookings made through their own sites. It's the smaller operators that will become the key clients of the aggregators."
Preston says loyalty schemes for hoteliers and reward points for airlines are proving to be very successful and provide the online supplier with another advantage over aggregators. "Aggregators struggle to provide anything significant to ensure customer loyalty. Discounts are one option but this comes directly off the bottom line. If they want to give a free flight, they have to first purchase it from the supplier."
PricewaterhouseCoopers LLP believes all online travel players will need to be more creative in the future, for example expanding into theatre tickets, restaurant bookings and theme park entry for example.
Its findings are published in a new report, called "The Distribution Revolution: the growth of supplier-only sites has been at the expense of the online aggregators".
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