American sites
set to arrive
in Europe


American Express
is now offering
an online
reservation service!

At the recent PhoCusWright online travel conference in Montreux, LIVEurope 2000, the European representatives of Expedia and Travelocity talked about their strategies - and it looks like they are ready to hit Europe.

Although only 17% of Europeans have Internet access today, as compared to 44% of Americans, James Vaile, managing director of Expedia UK, said that he was pleasantly surprised by the maturity of the British market.

For Jeffery Lavender, vice president, Europe, of travelocity.com, there are two sides to the equation for these big sites:

- Stabilise market shares in the US, by far the biggest and most homogenous market.

- Build a worldwide brand image. Rather than launch a head-on attack against European brands who have often been established for decades, travelocity.com aims to come in at the top level by convincing users of their advantages as a global company (quality of service, rich offer, experienced customer service).

In contrast to this optimism, the European travel leaders at the conference were dubious about the American sites' chances of becoming market leaders in Europe:

- 64% of European managers questioned did not think that travelocity.com would be a key player in European eTourism by 2002 (although 28% thought the opposite). For Expedia, the figures are 48% and 43% respectively.

At eTourism newsletter, we think its better to take a cautious approach to this type of prediction.

Expedia.com and Travelocity.com (and sites such as Trip.com, Lowestfare.com and Priceline.com) obviously have a considerable competitive edge.

Their first advantage is that they have spread out the IT and marketing development costs: the 2 or 3 years' experience they have acquired on the American market (increased number of visits and transactions, integration of customised services and customer support services) has given them a considerable amount of expertise, which European sites do not yet have. Moreover, they should be able to rapidly set up strong operational teams, either through aggressive recruitment campaigns or by taking over existing companies.

The sites are not well know in Europe for the moment, though, and they need to establish their reputations. However, the techniques for setting up an e-brand are well-known now, and these companies have considerable financial means at their disposal, so they should be able to rapidly create a brand image that Internet users will recognise.

The biggest problem for the American players is more to do with their lack of specific knowledge of local European eTourism markets (for example, the French tour operator market is still very fragmented and is very different from the German market, which is already consolidated).

The strategic question these new sites will have to ask themselves is whether they should offer an overall service for Europe, with a range of customised services for each country, or whether they should address each country individually with, in this case, the risk of losing the economy of scale advantage? We should know soon!

On the other hand, the Expedia.com and Travelocity.com teams do not seem to be particularly bothered by the joint sites set up by the main airline companies. Vaile thinks that the competitive pressure between these companies will be too strong for these projects to last all that long.

Source : WebTravelNews

American Express, better known up to now for its credit cards, financial services and travel agency network, has decided to open an online reservation service for the general public. And, to do so, it has pulled out all the stops.

To start with, it has enlisted a prestigious group of partners, including MapQuest, Ticketmaster, citysearch.com, and Travel & Leisure (for the contents), who can all be accessed from the site. Each brings a specific added-value to the American Express site, which ultimately aims to provide a one-stop service. The getThere.com search
engine integrates all these services so that users can quickly find what they are looking for.

The site is clearly set on an aggressive marketing policy based on low prices, as can be seen in its "New This Week" and "Last Minute Travel Bargains" sections.

American Express even goes as far as offering its customers a best-price guarantee. But the main competitive advantage the site has is the back-office.

American Express intends to use its network of 1,700 offices spread throughout 130 countries to reassure customers that, once they have actually set out on a journey, they will have a support network to fall back on. We feel that this is an extremely convincing strategy: it means that when users reserve online they will feel safe in the knowledge that they are dealing with a well-known and reliable company.

Faced with the rise in power of online agencies aiming to monopolise customer relationships, American Express has been swift to act and to offer its range of travel products directly to the consumer.

The question which springs to mind now is whether American Express will want to go further down this route and eventually switch the service to a specific brand (as Sabre did in a different area with travelocity.com), or whether it will restrict its ambitions to the service it is currently providing.

No doubt American Express's future relationship with the partners it has enlisted for the eTourism venture will depend on the answer to this question.

Source : Hotel Marketing