AGENDA

1
The Online Leisure Market Which Business Model
will dominate? Cormac Whelan
2
THE Travel Distribution Platform of Choice
3
Convergence of Supply Chain

• The Supply Chain of Yesterday
• Supplier Wholesaler Agent
• Today All Retailers All Wholesalers!
• Demand driven marketplace
• Increasing overlap and competitiveness
• Drive to lower risk and cost
• Drive to increase profitability and direct access
  to customer

4
First to Market Advantage - OTA

• Lastminute Expedia Ebookers represent approx
  53 of online leisure bookings in Europe.
• Expedia Travelocity and Orbitz account for 80
  of online leisure bookings in Q1, 2005
• Travelocity state YOY growth of 81 for packaging
  contributing 30 of total transactional revenue.

5
What have they learnt!

• Pioneered the concept of online
  wholesaler/retailer
• Defined Dynamic packaging
• Remove price as the only factor in the online
  customers decision
• Add-Ons Mash-ups etc
• Competitive price is a driver but giving the
  customer what he/she wants is key
• Focus on the capabilities of leisure distribution
  platforms that enable efficient access to
  suppliers/wholesalers and the content therein
• Created a community of loyal onliners! Mass
  promotion!
• Paradoxically OTA Customers are disloyal recent
  survey gt50 had shopped through OTA channel but
  purchased from another
• They are the Kings of owning the Customer!!

6
Tour Operators

• Established players will survive less
  fragmented
• Under attack from new e-retail market
• They must Tighten control of inventory
• De-risk the perishable
• And offering more flexibility
• e.g. JIT inventories with Low Cost Carriers
• Will still be a market for pre-packaged and
  semi-flexible packaged with a blend of
  on-line/off-line. There is a market for
  face-to-face
• May be the big winners - many updating their
  systems with new generation leisure distribution
  platforms and seizing the opportunity!
• Mature businesses focused on the bottom line
• Driving transaction loyalty through
  unique/exclusive offerings
• Sell the Experience!

7
Catching up.

• Whether choosing to sell your own product
  focusing on highest margin or confronting the OTA
  with unbundled product dynamic packaging
• Restructure for the new distribution environment
• Leisure Distribution Platform
• SOA Architectures and Web Services XML
• Integrated Direct Connect Distribution
• Tour Operator CRS Legacy to Online!
• Rates management, Dynamic packaging and pricing
  for optimal business process.
• In the call centre and online direct single view
  of the inventory!
• Own the CUSTOMER!!

8
Airline Suppliers

• Growing importance of ancillary revenue stream.
• Flight Driven Dynamic Packaging will be a focus.
• Strong retail brand customer loyalty and
  simplified business models
• RyanAir 28 million customers to sell non-air to!
• Large Network Carriers operating successful Tour
  Operators
• BA Holidays Virgin Holidays.
• Airlines challenge lies in procurement and
  fulfilment of non-air product and packages
• Private label technologies threaten brand
  integrity and customer ownership
• Maintain profitable partner relationships but
• Dont pass your customer off to an OTA!
• Investing in Travel Distribution Platforms to
  enable packaging
• They must take back control of their Channels and
  their Customers

9
2008 - Travel Distribution

• GDS will be still dominant
• 10 years since the first airline cut commissions
  and the first online booking of a flight. The
  GDSs remain profitable and all have embarked on
  dramatic strategies to diversify their business
  and participate in the growth in online travel.
• GNE Marketing Genius or Reality?
• Deregualtion will come to Europe!

10
2008 Travel Distribution

• Not all content will be available via all GDS
• Without the ability to procure from multiple
  external and internal sources, and distribute it
  through multiple integrated channels, the new
  dynamic market place can never begin effectively
• Preferred content maybe sufficient for some
  players
• Suppliers build direct relationships with
  clients/partner

11
And Beyond

• Technology mashing will enable the online
  environment to catch up with the offline
  experience led environment
• Recommendation Portals and social networking
• Myspace.com/Ticketmaster.com/Myfavoriteairline.com
  
• And an Airline who doesnt fly airplanes!!

12
THANK YOU