The existence of low-cost air fares and the ability to buy holiday insurance, book hotels and villas as well as rent cars have led to the phenomena of the DIY traveller who can search for the best possible deal themselves without the need for a middle man, aka the travel agent, leading to questions over the future of travel agency business and the typical package holiday.
However, rather than see their businesses suffer in any way, travel providers such as JWT, Budget Travel and Falcon Travel can be seen to be redoubling their efforts and using the internet in a more aggressive fashion to co-exist with and even facilitate the DIY holidaymaker.
Most people believe that the DIY nature of travel was pioneered by low fares airline Ryanair. However, if you look back 18 months prior to the launch of Ryanair’s website, Gohop.com – a little known subsidiary of established 30-year-old travel agency Atlas Travel – had already fixed its eyes on becoming Ireland’s answer to MSN’s Expedia.com.
In fact, Gohop claims to have also discovered a means of reconciling the difficult co-existence question of travel agencies and web-based channels by developing technology to meet the needs of both travel suppliers and buyers alike. Over 15,000 Irish consumers use the holiday search facility of Gohop.ie every week. With the increased availability of broadband in Ireland more and more people are moving to the internet to plan and book their travel arrangements.
Developments in travel technology also means that customers are now able to book increasingly complex itineraries online. In one recent week alone, Gohop.com reported sales of €192,000.
Gohop.com is currently in the process of investing between €1m and €2m in a new XML-based platform that will enable people to dynamically book flights, hotels, insurance and car rental in a single sitting. Stephen McKenna (pictured), the e-procurement director of Gohop.com, says that the new platform is almost set to go live. The XML technology is being built by Irish travel software firm Datalex and Digital Hub-based technology firm OpenJaw Technologies.
McKenna explains: “Atlas Travel has been in business for over 30 years and we deployed Gohop.com 18 months before Ryanair took to the web. We aggregate flights through the site for some 500 airlines and 50,000 hotels and properties every year.
“The traditional package holiday is on the decline and people want flexibility. We are beginning to see the rise of the DIY holidays where people search for the best deals out there themselves. Technology is definitely moving in that direction,” he asserts.
“The new platform uses XML to allow holiday shoppers to dynamically package a holiday themselves, seeking the best deals and paying for it all as part of a single package. In essence they are truly beginning to avail of the benefits derived from internet technology; thus helping them to streamline their business and reduce their costs accordingly,” adds McKenna.
McKenna doesn’t deny that his ability to create Gohop.com from a traditional travel company was aided considerably by the fact that it is his father’s company. “I came back from the States in 1997 and my job was to remove as much paper from [his father’s company] Atlas Travel’s operations as possible. At first my father wasn’t convinced but I knew he had an interest in buying and selling shares. I opened an account for him with E-trade and showed him how to click and buy shares. When he saw how easy it was he was convinced that this model could also be applied to travel.
“When I joined the company I identified that the internet was definitely picking up pace and would have profound implications for the travel business. However, it was difficult at that time to explain how a traditional travel company could evolve to become an online player and therefore it was hard to change traditional mindsets,” he explains.
“We set Gohop up as a separate company in 1998. At that time we had a budget of €8,000 and had some 130,000 visitors in the first year. Today we are seeing 3,000 people use the site every day. We’ve managed to grow sales and maintain margins at a time when margins in the industry are down from 10pc to 3pc.”
McKenna believes that the traditional travel sales channel has been hit by the advent of low-cost travel booking by as much as 20pc, but argues that the day of the travel agent is far from over. “We work closely with Irish travel providers. Technology provides a conduit for people to feel freer about taking holidays and that benefits the overall business.
“We believe that where technology is going in terms of dynamic booking will be vital to the growth of the travel industry in the future,” McKenna concludes.
By John Kennedy