Have Web, will fly

The travel industry is adapting to the Internet. Susan Amos explains how and looks at what is in store for digital holidays

Life's a beach when you harness the Web's full potential. Hinging as it does around the free flow of data, the travel sector has more than most to gain from the upturn of Internet-related applications.

Rolling out Internet booking is the most pressing goal for many tour operators and travel agency chains, but the route can be fraught with technical difficulties.

Up until now, travel agents have booked clients' summer holidays over the Viewdata network, a managed X.25 network provided by two suppliers Telewest Imminus and X-tant.

The network links travel agents to each tour operator's ageing booking systems. They are password-controlled to restrict access. Once a booking is made, it cannot easily be changed. Yoking up a tour operator's inflexible system to the mass booking medium of the Internet is a mammoth task.

Online booking is out of step with the way the public books holidays. There is usually toing and froing between consumer and travel agent. Typically, you pay a deposit when you first book, make an interim payment, then pay off the final balance before departure. Along the way, there will be questions.

Holidays also cost hundreds of pounds and people are not keen to part with cash to a computer screen. To get round this, Web sites such as airtours.co.uk and even digital interactive TV channels "cheat" and refer you to call centres to complete the booking.

Most holidays bookable on the Web, for example those at firstresort.com, part of the Thomson Travel Group, are the two-weeks-in-Majorca type. They are relatively straightforward to sell as clients are familiar with the destination.

Tailor-made operators such as London-based Elite Vacations, which sells upmarket holidays to the Indian Ocean, says its product is not suitable for selling over the Internet. Travel agents and consumers are not familiar with Mauritius and the Seychelles and need to ask questions. There are also add-ons such as car hire, flight or room upgrade that make a tailor-made transaction complex.

If you have tried to book travel on the Web, you will have noticed there are a vast number of travel-related Web sites all offering the same thing. For flights you can go to ebookers, travelocity or expedia, to name but three sites. You can buy direct from airline Web sites too. Industry watchers predict consolidation over the next two years.

The real winners in the flight booking game are low cost airlines such as EasyJet, which cuts out the travel agent and gives £5 discount to customers booking on its Web site. This incentive has managed to attract as much as 75% of sales to sites such as this on the Net.

For agents, direct booking of flights and holidays is a threat to their livelihood. The real question is who owns the customer? It is the tour operator that flies the customer to the Mediterranean and puts them up in a hotel, but the agent cultivates a relationship with the client and is often the first point of contact when anything goes wrong.

Despite travel agents' initial reluctance to upgrade from dumb terminals to expensive PCs - in travel, profit margins are low - they have started to set up Web sites to inform regular clients of special offers and attract new clients. Many have realised the danger of being less well informed than someone who has done research on the Web before stepping in to the shop.

Online travel: defining events of 2000

• January - Telewest Imminus launches Endeavour, a service for travel agents combining traditional flight and holiday booking mechanisms with new Internet access and online brochure searches

• February - Thomascook.com launched as the online arm of the travel agency chain, with two million holidays. Deals can be booked online

• April - Launch of Thomson's online travel agent, TheFirstResort.com. It has nine million holidays from Thomson, Airtours, JMC, Cosmos and First Choice. Deals can be booked online

• June - Low cost airline EasyJet sells three million seats online this month. The airline did 70% of bookings via its Web site in June

• June - Airtours parts company from EDS and brings development of reservations system in house

• June - Amadeus ships modern, browser-based version of flight booking system, so travel agents no longer need to memorise cryptic airport codes

• July - Car rental broker Holiday Autos becomes first travel-related company to offer real-time booking facility over Telewest's digital cable network Active Digital

• July - Launch of TV Travel Shop 2, cable and satellite channel selling holidays from three companies: JMC, Thomson and Cosmos. Runs alongside existing TV Travel Shop

• October - Travel Deals Direct, a rival to TV Travel Shop, launched video on demand service through BT Openworld's broadband ADSL services into PCs

• October - Venture capital company pulls plug on destinex.com, holiday Web site headed by former chairman of Going Places, Tony Bennett

• November - Travelchest.com, a flight booking site, part of Thomson Travel Group, admits it is in financial difficulty. Follows collapse of uTravel.co.uk, owned by United News and Media

• December - Expedia launches Wap and PDA service. Travellers can check flight times and other information using mobile devices

• December - Virgin launches online travel agent at Virgin.com

Useful sites

Expedia.co.uk - sold £12m worth of flights, hotels and car hire in the first quarter of 2000. Has now introduced Wap and PDA services

Easyjet.com - one of the most successful travel sites, the low-cost airline does 75% of its business over the Net. The site gives you £5 off if you book online. Car hire is bookable too

TheFirstresort.com - Thomson's online travel agent offers nine million holidays from Airtours, First Choice, Thomson, Cosmos and JMC. Booking is online, but some holidays can only be booked from 9am to 5pm

Just.co.uk - Thomson's no-frills packages Web site. One of the few travel sites where you can book holidays online, if you can find one that's not sold out

Virgin.com - Virgin's new travel store opened for business in December, sandwiched between Virgin Wines and Money on, Richard Branson's online emporium. As an online travel agent, it promises impartial advice on holidays. The company claims 90% of holidays will be bookable online

Leisurehunt.com - Type in a town or city around the globe, fill in preferences and you get a screenful of mid to upmarket hotels. You can filter to see only those hotels with online bookability

Dreamticket.com - Online travel agent. You can search for flights and holidays here. It is the first site to offer a "call a travel expert" service.

Case study: skydeals.co.uk

Ever tried to book a flight on Expedia, ebookers or Travelocity? If so, you'll know how much toing and froing you have to do before you can find a free seat on the flight of your choice. Skydeals.co.uk, part of the vast Thomson Travel Group, claims to have solved this problem by searching for free seats at the same time as looking for fares.

Graham Sadler, IT director for Skydeals said, "With other Web sites, you find a great fare, tap in your credit card details, then the system comes back with "seats not available on this flight". We cut out the extra step. Our search takes a little longer, say 30 to 40 seconds, but you know the seat exists and is bookable."

The site searches both for scheduled flights such as those offered by British Airways and charter flights like those available from Thomson's in-house airline Britannia. Other Web sites just search for scheduled airline seats.

Skydeals only exists on the Web and is not a bricks and mortar company. This means the site must be accessible and able to accept transactions day and night. Hosting of the site has been outsourced to London-based Net Decisions and PSInet, but Sadler likes to keep a watchful eye on his Solaris boxes, Oracle database and Apache Web server.

Holistix monitoring software checks the site every half an hour from locations in Munich, Amsterdam and London. It mimics a consumer searching for a flight to, say, Alicante. If it doesn't get the right answer, Holistix sends an short messaging service (SMS) message to Skydeals to alert it of the problem. While it is Net Decisions' job to fix technical problems, the Holistix software keeps Skydeals in the loop.

Holistix logs lapses in system availability and produces reports. It helps Skydeals manage its service provider. "It allows us to see if Net Decisions is doing what it should be doing, how it is performing against its service level agreement," said Sadler.

A key consideration in purchasing Holistix software was that there is no software to install. "We didn't want to buy something you had to put on a PC or server, as we have a number of people on call, on a rota, and we didn't want to keep swapping PCs around. Holistix has a server you log onto from any browser - with a password - to check performance. We can give the password to a number of people," said Sadler.

Thomas Cook builds rapport

Thomas Cook has turned round its IT systems to put the customer at the centre of the sale, and is now rethinking the sales process in the light of the new search tools and vast amount of information the Internet brings to the travel agent.

Upgrading to a Windows-based system in the mid-1990s, the company could store more information about the customer which it had been unable to do with its previous character-based system. "In the past, it was a case of here's a product. We sold it and we happened to sell it to the same customer as last year. Now we keep more information on customer preferences and a booking history," said Neale Chinery, IT director of Thomas Cook Retail. It helps agents build a rapport with the client, leads to better management information, which facilitates marketing campaigns.

Last year's merger with agency chain, Carlson Worldchoice, prompted Chinery to look at the overall picture and move from the travel industry's traditional X.25 viewdata network to an IP network from Energis. "Using IP as our standard protocol allows us to look at how we deliver product information to agencies. Instead of having gazetteers in every branch, we can now provide the information online from a central point. The character-based system didn't allow for that," said Chinery.

Thomas Cook agents still need to connect to the Viewdata X.25 network to book holidays from tour operators that have not yet migrated their booking systems to the Internet.

Staff can pick up the new IP-based system quickly. "By using a browser-based front end, agents can use our system as if they are at home using the Net. The system is much simpler to use, so you need less training," said Chinery. This is handy in an industry where staff turnover is notoriously high.

Agents have online access to sales aids such as the Foreign Office Web site, which issues travel advice, tourist board sites which hold visa requirements, and weather sites for climate information.

Customer queries such as, "Are there disabled facilities on the ground floor of the hotel?" can now be answered with a click of a mouse. Extra content - the stuff there wasn't room for in the brochure - has been put on the Web by Thomas Cook's in-house tour operator JMC.

But too much information is not always a good thing. Agents may be tempted to show clients many different Web sites and play them a video clip of a resort. This could add extra time to the transaction and cause waiting customers to queue longer. Thomas Cook is currently looking at the right balance between informing and selling, and looking at potential need for extra terminals for customers to watch videos or explore Web sites on their own.

Despite all the innovation at the user end, the back office is still in need of a makeover. But that is not Thomas Cook's fault. Each time an agent makes a booking with third party tour operators such as Airtours and Thomson, Thomas Cook has to screenscrape details from the tour operator's character-based, Viewdata system, then feed it into the Thomas Cook back office system.

Each tour operator stores booking information in a different way and Thomas Cook has to tweak its system to reflect that. Life would be easier if, after a Thomas Cook agent makes a booking with Thomson or Airtours for example, they sent booking details as a standard electronic message. "We're trying to mobilise the industry so people get together and talk about it," said Chinery.

Thomas Cook: key concerns

According to Neale Chinery (above), director of IT for Thomas Cook Retail, the top five concerns for IT managers in the travel industry are:

• Customer relationship management. CRM is in place for the high street shops which now have customer-focused IT systems. However, Thomascook.com, the company's online travel agency, and call-centre are separate entities. Thomas Cook would like to consolidate all sales - regardless of which channel the customer comes from - into a single customer database. It is important that customers who have seen an offer on the Thomas Cook Web site can book it in high street shops

• Better integration between the travel agency chain and third party tour operators' booking systems. Thomas Cook currently has to screenscrape the booking information from the tour operator's character-based, viewdata system, then feed it into the Thomas Cook back office system. Thomas Cook wants all tour operators to adopt a standard electronic message format

• Integrating new technology into the sales process and customer experience. Agents have the technology to show clients video clips of a resort to help them select holidays. This could increase the average length of a transaction. A new sales process needs to be worked out

• Using technology to personalise information. Agents could pick out five pages from four different brochures and print them for the client instead of giving them an armful of brochures

• Turning travel agents from a simple booking service into consultants for the whole holiday experience. At the moment, agents give the client brochures to take home and let them decide on the resort themselves. With better search tools, agents could recommend on the spot

Snapshot of typical software and hardware ecosystem

Expedia.co.uk

• Worldspan's airline reservation system to book rooms, car hire and flights

• Pegasus' hotel "switch" to book rooms in international hotel chains

• "Cabbage" by Datalex/ Teamworks, a bespoke database of Net fares, ie fares negotiated with airlines by Expedia

• Rent-a-holiday's listings service to search through 35,000 privately-owned chalets, gŒtes and villas

• Package holiday feed from Comtec for booking late deals and summer holidays

• Content feed from industry players like travelcamel.co.uk for ordering luggage and suntan cream online on the Expedia site

• Travel guides from the Rough Guides

• The site runs off a Compaq server farm in Canyon Park, Seattle, Washington

Bales Worldwide, tour operator

• Chauntry Explorer System, a reservation system

• The Galileo airline reservation system to book scheduled flights

• Online credit card authorisation service

• Chorus' accounting software, Word and Excel

• Explorer runs on an IBM AIX RS/6000

Holiday Hypermarkets, a UK-wide chain of 28 agencies

• Travel Cat travel agency management system by Leisure Network Solutions

• Agresso accounting software

• Comtec's feed of late bargains and summer/winter holidays from the top 30 holiday companies

• Travel Cat runs on a Compaq Alpha OpenVMS server and all 28 shop branches are linked over a wide area IP network, provided by Telewest Imminus

Key skills needed

"Everything to do with Web sites," said Graham Harris, partner at travel technology consultancy Equinus. Wap skills and interactive digital TV skills are on the periphery though. "Wap has been largely discredited. It is unrealistic to do most leisure bookings this way," said Harris. Although he concedes it will be extremely appropriate for applications such as using a mobile phone to cancel your flight and book yourself on a later one. This technology is already being trialled in the US by airline reservation company Galileo. "IDTV is not yet proven as a platform to book travel. There are a small number of tour operators using it to sell. It's an expensive experiment at the moment, so there's no big demand for iDTV skills," said Harris.

XML skills will be key. "XML will be the fundamental glue that will hold the trading chain together," according to Harris.

Networking skills will be important too. "While the travel industry shares the usual networking with other industries, there are also travel-specific networking skills. Take the airline reservation networks, for example, Galileo, Amadeus, Sabre and Worldspan."

Knowledge of call-centre technology will be important as more tour operators integrate centres with "line of business" applications such as Chauntry's, Anites and FSS' reservations systems.

Customer relationship management along with datawarehousing and data mining are still at early stages in industry, so skills are not yet in demand. The problem lies in the fickleness of discount-driven consumers. "Can you remember which tour operator you travelled with last year? A customer might buy something from Thomas Cook once, and then not go back for five years. In other industries - take supermarkets - people are shopping every week, so chains can build up a picture of a customer's preferences and lifestyle. There are no customer loyalty schemes in travel and there is hardly any relationship between the client, tour operator or agent - just a once-a-year interaction, if that," said Harris.

Case study: early adopters

ABC Holiday Extras was one of the first travel industry outfits to start selling over the Web. For just over a year, the company has been taking bookings for airport hotels, car parking and lounges. Its customers are travel agents and the general public.

At present, around 7% of the company's sales come via its Web site, but the company aims to boost that figure to 40% in two years and 70% in four years. Managing director Stephen Laurence does not think this goal is ambitious. "Around 93% of car park bookings are done on viewdata [the travel industry's green screen, dumb terminal, X.25 booking network] and we get 75% of hotel bookings that way too. Our traditional way of trading is electronically, so moving people towards booking on the Internet is a change of medium," he said.

Nudging travel agents towards booking on the Internet means the company can show them pictures of hotels, give them maps and masses more information than can be shoehorned onto a green screen. Agents can also print out better quality vouchers instead of the character-based screen dumps from viewdata. This translates into a good conversion rate from browsers to bookers.

To tie up with tour operators and sell hotel beds from Web sites, ABC has had to develop a way of letting them keep hold of the client. "When you go into our site from a tour operator's, the client sees the logo and colours of the tour operator, not ours. Even though the booking is done on our site, the tour operator controls the look and feel and decides which products the client can access," said Laurence.

Early in the year, the company aims to split its site into two different versions. An initial home page will point agents in one direction and the public in another. This is because their needs are different. "Agents know airport car park codes off the top of their head. So the next step is to enter the date of arrival. They spend three minutes on the site. The public, unless they are regular users, need more prompts and a drag down menu. They spend seven minutes on site," said Laurence.