Monday, November 13, 2006

Fairfax announces big play with few details

Travel weekly are running a story with big talk from Fairfax (huge Australian media company) on their plans for online travel. Fairfax made a very tentative step into travel when they acquired independent accom provider Stayz in December last year for AU$12mm. I always thought this a strange first move into travel. While I think the potential for the independent accom sector is great, Stayz did not have a particularly strong brand at the time and its technology is nothing special. There has been great interest in what Fairfax would do next. Now we know - well we have a bit more of an idea - well we have a little bit of a hint of a possibility.

According to Travelweekly, Fairfax will launch four sites in the next six months. The first is Hotelz. The quote from the article is that Fairfax and Zuji have entered into a "content deal". Unclear what that means but from the look of the hotelz beta site it involves a white-label booking engine. The site is in beta so can't be too critical yet but if they want to challenge Wotif, Lastminute, RatesToGo etc then it is going to need a better search functionality. Typing Sydney into the Hotelz search box and choosing Australia it still asks me for clarification - if I have chosen Sydney Australia, how could I possibly be thinking about Nova Scotia?

The engine url has regular references to - not heard of them before though judging by Alexa they provide white-label solutions for a number of airlines and Zuji. Could be an offshoot of Travelocity.

I like the Chutzpah and drive of Fairfax Digital travel boss James Cassidy claiming that "within 18 months it [Fairfax] will become a major force in online travel, even rivalling Wotif". However the basis for his claim does not stand up to scrutiny. He says “Wotif offers bookings within one month and only 30 per cent of the market book in that window,”. It will be a fatal error for Fairfax to chase the other 70% (assuming this number is true) as all of the money to date in online travel is in a booking window within one month. The sectors that are booking beyond that date are the least likely to book online.

I also caution them on relying too much on white-labels. Controlling product and inventory is critical to success in online travel. Telstra' s Sensis jumped into online travel through GoStay - a white-label of AOT's needitnow - and it has gone nowhere. My earlier comments on that are here. Rumours are Travelport is also remembering that lesson and unwinding its efforts to combine offline and online hotel contracting.

1 comment:

Anonymous said...

so much money, so many paradoxes, so little experience......are u not also working for a major publication with a spare $120m