Leisureplanet.com and libertytv.com form an alliance to offer Business Travel programmes on television. Will cable TV be the next European eTourism battlefield?

Sabre and eSoft form an alliance to offer small- and medium-sized companies a tailored business travel solution. Reflections on the future of Internet-based systems for corporate travel.

Will cable TV be the next European eTourism battlefield?

libertytv.com, the new multimedia concept for distributing travel developed by Lotfi Belhassine, has just announced that it is forming an alliance with leisureplanet.com in order to promote the latter's products and contents (its Travel Guides now cover 180 destinations and the site offers 60,000 pictures of hotels) on its European TV channel dedicated to travel.

To start with, the agreement will mostly be focused on leisureplanet.com's business travel offer. Business travellers will be able to see 30-second television documentaries on the hotels they have selected. In exchange, the libertytv.com website will be able to draw on leisureplanet.com's rich contents to enhance its presence on the Web.

For Pierre Kleinhans, CIO of leisureplanet.com, it's a question of giving website visitors a visual experience (TV documentaries) which is possible thanks to the status of bandwidth in Europe (infrastructures and tariff conditions).

In addition, the agreement will enable him to broadcast his products to several countries at once, without having to make huge marketing investments. But, fundamentally, the website will remain the core of the company's strategy for acquiring customers (easy access, profiling, streamlined transactions).

The agreement also has benefits for libertytv.com: it will enable it to enrich its TV schedule at little cost and also to offer more services on its website, which is still not very highly developed (not much content, poor design, not customer-centric).

Although libertytv.com defines itself as a multimedia travel distributor enabling users to go from one support to another, its core business today is its thematic European television programme. We feel that the marketing approach behind the service is interesting: the user should be able to visualise the products he selects as clearly as possible and television is still the only media capable of doing this satisfactorily, for the moment.

However, its transactional functions are, and will remain, very poor. As a result, bookings are almost always made through call centres, whereas for the websites this is a stopgap solution involving processing costs often 10 times higher than those of an online booking.

The difference between these two approaches (web only, TV only or a mixture of both) could be hinged on the development of the structure of reservation costs.

Let's not forget that the main competitive advantage of the web is that it gets the customer to carry out the booking transactions himself (choosing the product, checking availability, booking) in exchange for saving time and for the services he is provided with. This gives rise to a positive spiral effect: less expensive booking costs have repercussions on the price policy; as prices get more competitive new customers are attracted; they, in turn, generate a higher turnover, and so on and so forth.

Other eTourism companies, such as travelprice.com which has just integrated Canal Satellite's offer, are also asking themselves the same kind of questions, i.e. should the website offer be extended to other supports such as television (and WAP)?

In the maelstrom of the European eTourism market, companies are still at the discovery and experimental phase. It is therefore very difficult to judge, for the moment, which of the multi-support strategies will turn out to be the right ones in the medium term.

We will no doubt have to wait until high-speed access becomes available to consumers (sometime in 2001-2002) for the market to make up its mind.

And if high-speed access holds up to its promises, as the preliminary figures of eEntertainment in the US seem to suggest, they'll be no need to discuss the point any further ... since PCs (or their more user-friendly successors) will have taken the place of televisions!

Source : Leisureplanet - LybertyTV

Sabre's corporate travel management system, Sabre BTS, will now be integrated into the eSoft's Internet suites. The advantage of this agreement comes from eSoft's positioning; its products are aimed at small- and medium-sized companies.

Sabre has decided to attack this new market which has not, up to now, been able to integrate Internet solutions for business travel (licence price too high, integration level too demanding, too many unnecessary functions).

Sabre is following a fairly standard marketing procedure (to start with, software makers aim to sell their products to large companies in order to recoup their research and development costs, they then offer the products to smaller sized companies, in the form of a package).

However, although the time has come in the US for targeting the small business market, Europe is not ready for this step yet. On the Old Continent, large companies are only just starting to integrate business travel solutions into their Intranets.

In accordance with eSoft's philosophy, Sabre has designed a ready-to-use package product - which is, in effect, a virtual eAgency, which can be parametered according to the company's actual needs.

As with large companies, the main aim for small businesses is to rationalise the costs of their travel policies. And, from this point of view, Internet-based travel management tools are real killer applications.

They make it possible for order processes to be based on a single travel policy for the whole company. This results in economies of scale since bookings are based on negotiated rates (airlines, hotels).

Access to a single booking system is made easier by the web's universality which enables employees to book their trips quite easily at any time and from anywhere. Automatic reporting functions are the second key factor.

The manager in charge of the travel budget is kept up to date, practically in real time, of the company's travel expenditure, and therefore has the means of making rapid "corrections", if necessary (e.g.: renegotiation of tariffs to a given destination).

By controlling the travel budget so closely, the company optimises its travel policy. Sabre estimates that these systems could reduce company travel budgets by between 30 and 50%!

These figures, based on the experiences of large companies, will not be so high for small businesses, though, since their travel policies are not usually so complicated and are therefore much easier to control.

Although there is no doubt that there is a potential market for corporate travel solutions on the Internet, small businesses will probably wait to decide whether they want to benefit from these plug-and-play, easily parametered systems.

They have in fact, already had their fingers burnt by their experiences with their ecommerce sites. Suppliers assured them that there would be no problems at all in setting up these solutions. In fact, they quickly realised that, on the contrary, implementing an ebusiness strategy was extremely complex (specific marketing policy, integration with the back-office, etc.).

It's fairly sure that with the experience these companies have acquired with the Internet, they will now want solutions which are immediately operational on their Intranets. The Internet-based business travel tool will be considered as another "brick", like messaging and using the website as a sales channel.

As for the business model which will prevail for these solutions, it is too soon to give a verdict yet. Today, suppliers of solutions seem to prefer a business model based on commissions for each booking. In this case, installing the software will result in creating a barrier at the customer level (once the system is integrated, the company has little chance of using a different system, since this would break up the coherence of their strategy).

Solutions of the virtual eAgency type will no doubt be faced with 2 problems, though:
- the reaction of traditional agencies who, having already lost money through the commissions they have to pay for the sale of tickets to the general public, are not going to take kindly to one of their suppliers (Sabre) offering businesses the possibility of setting up their own virtual agencies;
- Internet sites who invite companies to completely outsource their travel policy using an ASP ( Application Service Provider) on their platforms. Moreover, a countless number general public eTourism sites are currently opening their services to companies.