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Cheap airline ticket to Italy and European Travel"CHEAP AIRLINE TICKET TO ITALY"
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04-02-2005 When Beate Karstedt began shopping for a place to take her family on vacation this summer, she did not confine her search to the neighborhood travel agent a few blocks away. Karstedt also went online to a German Web site, www.ferienhauser.de, through which she rented a house on a lake near the Dutch border for §350, or $455, a week ã roughly half the price she could have gotten through her local travel agent.
CHEAP AIRLINE TICKET TO ITALY ''I'm very happy with what I found on the Web,'' said Karstedt, 37, a security guard. ''I'm definitely going to go online the next time I shop for a vacation.'' Travelers like Karstedt are in a good position: Europe's online tourism business is overcrowded with large, free-spending merchants willing to make minimal profit or even take a loss to gain a place in the fast-growing market. Many say that is why large profits have eluded industry leaders like Expedia, a unit of New York-based IAC/InterActiveCorp; London-based Lastminute.com; and Opodo, which is owned by Madrid-based Amadeus, operator of Europe's main airline reservation system.
CHEAP AIRLINE TICKET TO ITALY ''This is a competitive business, where profit margins are thin,'' said Robin Chhabra, an analyst at Evolution Securities, a London-based brokerage. ''So the strategy is to generate high volumes. But there are too many players. Not all will survive.'' Of Europe's top online agents, only Expedia says it is making a bottom-line profit. Lastminute.com, which has bought 14 companies in the past six years, had a loss of l77 million, or $145 million, in the year that ended last Sept. 30 as acquisition costs erased l4.8 million in operating profit.
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CHEAP AIRLINE TICKET TO ITALY Opodo, whose majority owner, Amadeus, is being bought for §4.3 billion by two European private equity companies, Frankfurt-based Cinven and London-based BC Partners, expects to make its first operating profit by the end of 2006. Opodo last year had a loss of §20.9 million before interest, taxes, depreciation and amortization, Amadeus said in its annual report. Expedia ã part of the IAC group that includes the electronic retailers hotels.com, TripAdvisor, anyway.com, TV Travel Shop and HSN.com ã does not disclose profit or loss data for its European operations.
CHEAP AIRLINE TICKET TO ITALY Expedia was Europe's No. 1 travel site in February, based on a survey of unique Web site visits by the market researcher Nielsen/NetRatings. Expedia also owns 49.9 percent of Europe's No. 3 travel site, voyages-sncf.com of France, which it operates with the French national railroad. ''We generated our first net profit in Europe one and a half years ago, but frankly I try to keep our results as opaque as possible so as not to give my competitors any help,'' said Simon Breakwell, chief executive of IAC's European travel division, which includes Expedia and the SNCF venture.
CHEAP AIRLINE TICKET TO ITALY ''Online tourism is definitely the future. In 10 to 15 years, there will be almost nobody who doesn't book their travel over the Internet.'' Competition among online travel brokers is translating into lower prices and more choice for Europeans because the Internet is creating a more efficient, fluid market for air, hotel and vacation prices.
CHEAP AIRLINE TICKET TO ITALY The current oversupply of online agents is also pushing prices lower on the Web as well as in traditional storefront agencies, which are cutting their own fees to stay competitive. Britain is Europe's largest online travel market, accounting for 36 percent of sales in 2004, according to the Center for Regional and Tourism Research, based on the island of Bornholm in Denmark.
CHEAP AIRLINE TICKET TO ITALY Together, Britain, Germany and France generated 69 percent of all European transactions. Sixty-four percent of transactions were made directly on the Web sites of airlines, hotels and other service providers, with the rest booked through online travel agents like Expedia, Opodo and Lastminute.com. Flight bookings, which make up the bulk of online travel transactions, are becoming less and less profitable to booking agents, forcing a shift to more lucrative sources of income.
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In 2004, 57.4 percent of all online travel transactions were airline ticket purchases, according to the tourism research center. Chhabra of Evolution Securities said the average profit margin for flights was about 4 percent and shrinking. That is a big reason Opodo this year bought three online package-tour operators: Eviaggi in Italy, Travellink in Scandinavia and Karavel in France, all of which specialize in connecting flight, hotel and car options, a higher-margin business.
CHEAP AIRLINE TICKET TO ITALY The Opodo chief executive, Simon Vincent, said freeing Opodo from reliance on airline ticket reservations was vital to its future. To compensate for declining airfare commissions, Opodo also recently introduced transaction fees for airline tickets. ''The airline ticket business has basically become a commodity business,'' he said. ''That is why we are diversifying into other, more profitable areas.'' At Lastminute.com, the founder and chief executive, Brent Hoberman, said the company now got just 10 percent of its sales revenue from airline ticketing and the vast majority from event tickets, hotels, car rentals and vacation packages. Can't find what you need? Try a Google Web Search in the box below!
''Our gross profit margin in car rentals is more than 30 percent; in hotels, it is more than 20 percent,'' Hoberman said. ''In the travel business, getting people to places is not where you make money anymore. It's what they do when they get there.'' In Europe, that is easier said than done, because national borders and laws increase the costs and complicate the logistics for the biggest online agents.
CHEAP AIRLINE TICKET TO ITALY Corporate chains, for example, still own only 30 percent of the hotels in Europe, compared with 70 percent in the United States, according to Hoberman. ''It's very hard to maintain a leading brand in this business, but we've managed to do it,'' he said. ''But you need the scale, the size, to be successful.''... COMPARE A CHEAP AIRLINE TICKET TO ITALY HERE /cheap airfare home |