Fortnightly No 2000/1
|New eTourism players - price comparison sites. Our opinion|
This service offers users a comparison of prices for seats still available on flights.
of course, the main benefit of the service, as it saves the user from
wasting time by starting to reserve a ticket and then not being able to
go right through with the transaction.
This topic is very much in the news at the moment since other price comparison sites have also opened Travel sections, also limited to flight-only reservations.
is, how popular are these new online consumer modes going to be?
In our opinion, the first obstacle to the development of this way of selecting products comes from the very nature of travel products. Their complexity (timetables, availability, price ranges, integration of many different segments) calls for an environment where the user researching or making a booking can be guided through each step and is allowed to "test" various combinations in a single session.
Although the price comparison function is quite useful for everyday products, such as books and CDs (fairly accurate information about their availability, clear descriptions), where the price factor is the only thing that will sway the consumer's decision, things are quite different for travel products.
As mentioned above, there are a lot more parameters to take into account (and, of course, these products are far more expensive).
So it comes as no surprise to find that, for the moment, the sites only compare the simplest tourist product: flight-only reservations. But this is also the product for which the eTourism sites have the smallest profit margins and which attracts the "bargain hunter" type of customers who are, in any case, going to go round all the main sites before they make up their minds.
The price comparison sites will offer a more efficient service for this type of consumer's online "call for tenders", and this should not really have an adverse effect for the eTourism sites on which the reservations are actually made: they will simply get fewer hits from bargain hunters.
The situation is not quite so black and white though. Being referenced by a price comparison service is still a good idea for eTourism sites, since it gives them permanent visibility in the eyes of a certain set of consumers, who will therefore be continually reminded of them.
The second obstacle the price comparison sites will come up against in trying to attract large numbers of Internet users, comes from their positioning in terms of consumer awareness.
Although the general public spontaneously connects use of price comparison services with ordinary everyday purchases not requiring too much information, like books and CDs, it does not automatically think of using them for booking trips.
To encourage this reflex, and generate a flow of quality visitors, the price comparison sites will have to build strong e-brand awareness through the launch of big marketing campaigns (cf the substantial amounts the new virtual agencies are currently spending). There is a risk that the price comparison sites will find that they have taken on too many different things. However, investors are going to increasingly impose short-term visibility criteria on these sites!
In addition, the sites can't count on impulse buying: a visitor who has come to compare the price of books is more likely to be side-tracked into buying a CD than a plane ticket!
We should, however, remain cautious about the future impact of this phenomenon which is still taking its first tentative steps. We should not forget that online auctions, which were considered as being just a marketing "stunt" when they first appeared on the Nouvelles Frontières site, have turned out to be a normal way of purchasing goods for an ever-increasing number of users.