Read the headline again… That’s right, the UK’s official body which represents the interests of travel organisations and consumers has a rather interesting idea.
But first, some background: two key distribution models are emerging in consumer-facing online travel.
Firstly, there is the distributed transaction model – supplier places product, price and availability information into some form of distribution system, consumer buys from an agent (online or off), the transaction details are transmitted to the supplier.
Secondly, media models are coming to the fore. Awareness of the product (including perhaps price/availability) is on a 3rd party website, but ultimately the consumer books with the supplier directly.
Media models are simply a form of advertising with rich data. It is a marketing process, not a sales process.
With flights, hotels and other commodity products distributed transactions work well.
Most leading OTAs sell flights/hotels and consumers are happy enough to book these products via OTAs.
One reason is that collectively we as an industry have worked out what product information the consumer needs in order to make a purchase decision on a 3rd party website.
For flights/hotels the hot news is the media model websites (including meta search, trip planning sites etc).
For escorted tours, activities and some ground arrangements the story is quite the opposite. Take the example of a customer looking to book a white water rafting holiday.
The consumer will want to communicate with the supplier prior to booking. It is the nature of the product. Hence for these products distributed transaction websites have never really taken off and, I argue, are unlikely to.
Instead of automation tour companies focus on efficiency. You know you are going to have human-to-human contact as part of the sales and booking process – how can that be made efficient?
For these kinds of products the media models are king as ultimately it ensures consumer-to-supplier communication takes place directly.
The hot news is where you see distributed transaction models being given a go.
Trouble ahead
In the UK at least, distributed transactions are a core part of what a travel agent does. In flight/hotel sales the travel agents are competing not only against strong online distributed transaction players but with media model sites that don’t need any complex technology nor any consumer protection mechanisms. Is that fair?
Seems the agents don’t believe so and they want to even up the playing field.
What we may have here is the start of a proxy war between the smaller agents who want to maintain the distributed transaction model and the media model people.
However the media model people haven’t really woken up to it yet (probably because the trade press tend to write from a travel agent perspective!).
The proxy war will be fought within the new Package Travel Directive (a European-wide proposal that is under consultation at the moment).
From an ABTA statement this week:
“The ABTA submission to the European consultation advocates that the scope of customer protection should be extended to include all linked leisure travel arrangements, including “click-through” arrangements bought on the internet.”
Now I am not quite sure what this means yet. Does it mean that if you are a travel website and you have an affiliate banner to sell a hotel – and an affiliate banner to sell a flight – you need to be offering consumer protection?
That would be troubling. It would also be troubling to all non-travel websites who have travel advertisers and, if finally incorporated into the new directive, break the media model at least in Europe.
ABTA asked their members the following question:
If a new Package Travel Directive were introduced, indicate which of the following travel-related products or arrangements you think should be within the scope (tick all that apply).
One of the answers was:
- Accommodation, transport andor other tourist services purchased on the internet from different sites which are clearly linked on their web pages.
105 out of the 141 responses (74%) ticked that this should be in scope.
I am somewhat surprised by this position taken by ABTA. Last year when the ABTA chairman was being elected there was a great discussion on the Musings blog about this very topic. John McEwan (now ABTA chairman) stated:
“My view is that ABTA is best placed to represent the industry as a whole and that should include non transactional companies such as Cheapflights, Google etc. The methods of purchasing travel have evolved and ABTA needs to evolve accordingly.”
The European Union is still accepting responses to the open consultation (until 7th February 2010). Consultation website.
If you believe that websites should be able to link to travel companies without taking responsibility for consumer protection then make your voice heard!
NB: I am taking part in a debate about these two models in tour distribution as part of Travel Technology Europe (London, February 9th 2010). Seminar A1. I will be debating these two models with Deepak Jha from Isango.
Related posts:
- European Union wades into web package holiday confusion, half of travellers not protected
- Sending fake press releases from the ABTA account at Travmedia is easy
- Ten factors to define a Global Distribution System [GDS]
- Kayak’s collection of customer information would ‘assist’ its media business
- Google Sidewiki could be a sideshow for review sites
About Alex Bainbridge
If I’m not mistaken, the click-through reference refers to the likes of EasyJet and Ryanair offering accommodation, car hire and other components of a ‘package’— rather than just search engines or advertising.
That might be simplistic but maybe you should ask ABTA yourselves before guessing what it might mean?
Hi Mixu
This article was written following discussion with ABTA on exactly that point. The answer is they don’t have a final definition either.
Here is a statement from the ABTA official regarding the definition of a click through
“we are looking at aiming to agree principles and we believe ‘in principle’ that linked arrangements should be protected, but we don’t know what the definitions will be at this stage, there will plenty of opportunity to discuss the detail of definitions further down the line, and it is likely that Government will decide on those definitions.”
“Mixu”:
In defence of Alex, Tnooz would not have published this post without that check and balance you requested.
Alex outlines the answer above quite well, I think.
Fair enough, thought you were going for the hit-and-run
Looks like the PTD debates will run and run…
“Mixu”:
Yes they probably will. And this situation may well alter with a change in UK government some time this year.
BTW: Talking of hit-and-run, why didn’t you reveal who you really are or who you work for? Comments from that organisation would actually be quite welcome. [Remember: IP addresses, which we always check with anonymous commenters, usually reveal quite a lot!]
Have I understood this correct? I do not think it is right that the site displaying a banner ad for a travel company can take responsibility for anything that happens after the purchaser has clicked on the link. Isn’t this like making the national press responsible for carrying the advert for any Tour Operator.
On the aspect of clicking on links from e.g. an airline site or agent site, having purchased an air ticket, then going off and purchasing car or hotel, if this purchase takes place on a separate site, this does not result in an ‘inclusive’ price so I do not see how the Regs would apply. If the purchase takes place within the same site then – well I haven’t read the regs to see what the definition of an inclusive price is – so it may be the area where the protection is required.
Hi Milind,
I believe you have read it right but that both of us think that a link that is advertising in nature should not infer any regulation in the new Package Travel Directive.
But then it gets tricky – as if you are a travel website and you have advertising on it – is that different to a non-travel website carrying advertising? Seems ABTA is concerned about one but may end up causing collateral damage to the other.
Yes the UK / European GOV can regulate advertising. See medicine advertising for example!
Do you know if this will include sites like TripAdvisor and their click through to other companies?
The whole area is such a mess and needs to be tackled holistically from top to bottom. Although the wording doesn’t rule out what you are suggesting, I can’t realistically see media advertisers being required to take on any responsibility for bonding. But it is feasible that the media site is required to ensure any travel companies advertising with them are bonded (as I believe some of the press do already).
How do you stop local tour operators outside the EU selling direct to EU customers through there website? In many countries few are bonded and our laws have no teeth to deal with it.
All:
What I’d really like to hear now is what Google would say to such an initiative.
Typically they do not comment on anything that involves policy within another organisation or sector (unless it’s China, of course
), but this has potential to run and run.
Nevertheless, one wonders if ABTA will now be forced to rethink their strategy given what they are implying…
Great post thanks Alex,
I don’t see how making media models responsible for consumer protection is a reasonable approach especially if it’s clear the aggregation point is axactly that and where/when the customers are being transferred to when they do book.
I do however, think travel sites/third party sites that carry rich data need to be diligent in ensuring the data, pricing, seasonality is accurate (and incl all required taxes etc) to prevent disconnects (or the instance/impression of bait and switch) that might adversly affect consumers.
Off to the submission site.
From a media owners point of view that is totally proposterous. What about newspaper adverts? Should the newspapers be responsible if their travel advertisers fail?
“Accommodation, transport and or other tourist services purchased on the internet from different sites which are clearly linked on their web pages” – this is very ambigous.
The respondents might have justifiably thought that this would mean where those advertisers are owned by the same company and not targeted the media owner (Google).
Penalising the media owner will almost certainly lead to increased ad distribution costs.
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