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The Travel business model is about to change…

Traditional package holiday providers must embrace a multi-channel approach to “touch the customer” if they are to survive, according to Andrew Botterill, head of high street agency consortium Global Travel Group.

Speaking at the most recent Travolution board meeting, Botterill observed that the same vertically integrated models which have escorted companies to the top three slots in terms of marketshare, are now being re-engineered.

“We are moving away from the 7-14 day package holiday. We want to be a provider of B2B for all channels and we want a high street brand that is fit for purpose,” said Botterill.

Lastminute.com CEO Ian McCaig agreed a multi-channel approach is the way forward. He predicted the middle-market providers would continue to get squeezed, as a result of more consolidation, the entrance of new players, and the effect of private equity ownership.

“You either need to be full service or mass–market and be able to leverage your scale, or service a niche. There won’t be any room in the middle,” said McCaig.

This squeeze will also produce “strange bedfellows”, says McCaig. “You will see closer alignment between operators and search companies like Google and Yahoo!, the traditional online travel agencies and the meta-search companies.”

“Companies you might think today are poles apart will emerge as firm partners,” says McCaig.

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