Travel eBusiness Models - Travelocity

Travelocity.com / Travelocity.co.uk is owned and operated by Sabre Holdings – a products, distribution and technology solutions company focused on the travel industry. Their consumer direct and business direct side of the business is Travelocity. Travelocity has several million registered users and booked $4.9 billion worth of travel business in 2004. [Sabre-Holdings.com]

At the time of writing, Travelocity is the second most popular brand in the world in the Internet travel marketplace. Travelocity.com is also the 386th most popular website in the world, whilst the British version, Travelocity.co.uk is the 4884th most popular. [Ranking.com]

Travelocity was established in 1996 as a subsidiary or Sabre Holdings and was the first travel website that allowed users to browse, reserve and book travel-related products online. [Answers.com]

Initially Travelocity appeared to be extremely ‘community orientated’ – regularly arranging offline meetings and presentations for ‘do-it-yourself travellers’.

In 1998 Travelocity changed direction and became more ‘travel deals orientated’. They did this by incorporating the availability to book flights, hotels and car hire directly from their home page. [Archive.org]

In 2000 Travelocity became more aware of the need to market themselves as a brand. This resulted in 2002 with a complete re-design of the website to make it more user-friendly and encourage return visitors.

Travelocity’s present day website (designed in 2004) ‘look and feel’ is starting to rely more on a higher percentage of graphics. This offers website users a more visually appealing experience, although it does rely on the user being more likely to have a slightly faster Internet connection than they used to. [Archive.org]

Travelocity Position

Travelocity.com is a fun, friendly, informative, useful and easy to use website. In addition to this it is professional and reliable. This demonstrates that Travelocity is comfortable to try and be a ‘love all, serve all’ Internet Travel Portal.

Travelocity is however a company with an aggressive stance. It does not form strategic alliances with other companies in order to promote affiliate-marketing programmes. In addition, it regularly seeks out potential competitors to buy.

In 2000, Travelocity purchased another early web travel company, Preview Travel, [Answers.com] whilst in 2002 it purchased Site59.com – a New York based travel business that specialise in late bookings.

On 12th May 2005 it was announced that Travelocity had agreed to buy lastminute.com for £577m – creating Europe's biggest online travel retailer. [Silicon.com] Part of the reason why Travelocity wants to gain dominance quickly in the Internet Travel Marketplace and grow by acquisition is that it understands that the market is growing and evolving quickly.

It wants to be the first choice in the majority of consumers’ minds for future travel purchases. This is therefore one of their major strengths. Whether or not their decision not to evolve by forming strategic alliances may thwart this aggressive growth strategy is yet to be seen.

To a certain degree, opportunities within the Internet travel marketplace for Travelocity are still limitless. They can still expand to cover more countries Internationally, they can still improve upon their overall marketshare and they can still expect both Internet users and the amount of Internet users willing to book online to increase significantly.

Travelocity Core Competences

Travelocity are striving towards ensuring that their brand is the most recognised and trusted available in the Internet Travel marketplace. Their most important core competency is to offer an integrated, easy-to-use and intuitive website that keeps people wanting to come back to it much more that any competitor in the field.

Travelocity Competitive Advantage

Travelocity have recently introduced their Bill of Rights onto their website:
Customers have the right toÂ…

1) Get what you booked
2) The best overall value in travel
3) Accurate and objective information upfront

4) Find what you’re looking for quickly and easily

5) A straightforward presentation of your options

6) Speak with someone and get help anytime

7) Be inspired by your travel company

[Travelocity.com]

These seven key customer issues have been highlighted to demonstrate why Travelocity believe that they are better than the competition. Travelocity want their brand to represent trust, reliability and service and therefore define what they believe their competitive advantage to be.

The Merchant Model Conclusion

The merchant model is without doubt the most competitive Internet business model for the travel industry. The two main worldwide competitors – Expedia and Travelocity have chosen to focus upon price and service level differentiation respectively. It could be argued that Expedia however focus on their value-adding activities – their existing infrastructure in order to derive their core competencies of efficiency and price. Travelocity on the other hand rely upon their ‘bill of rights’ core competency in order to drive their ‘value adding activities’.