1. The Future of Tour Operations On-Line

2. Market Resistance  “6 nights is not sexy” However:  “Tour Operators and Travel Agents need to provide products to their target audiences in the most efficient, cost-effective and compelling way”  Enabling customers to be active participants in creating their own trip

3. Through dynamic packages, the customer evaluates and selects the individual travel components that best suit his/her needs and travel wants. Savings available through buying multiple single components in one shopping trip can be promoted and this in turn adds a further incentive for the customer to buy their dynamic package in one store at one transaction. The extent to which these can be uniquely tailored to the customer attracts those who find the mass market pre- packaged holiday less appealing.

4. Metasearch providers are one group of industry players who have capitalised effectively on this trend. They offer the consumer near-instantaneous visibility into the price and availability of single travel components, especially air.

5. For instance, once directed by the metasearch provider to a site selling the consumer’s preferred air product, the consumer is presented with an array of further travel products – hotel, car hire, etc – which they can bolt-onto their air product to create a customized dynamic package.

6. The challenge for the vendor is to offer as much good quality and suitably priced inventory for all the different travel components in one place.

7. What’s driving new distribution?  Air commission reductions & GDS Fees have been the primary driver for product adjustment  Emergence of the “merchant model” has changed the pricing model forever 25% vs. 10%  Total transparency has created downward pressure on prices and margins – low cost and hotel only  Rapid growth of 3 rd party online distribution has created a distribution power shift  New technological advancements creating higher traveller expectations  Result = A new leisure marketplace has been created

8. Market Adoption  Mass-market Tour Operators – extending their specialist holiday businesses = Flexible packaging  Independent Specialists – extending their product range to include low cost and hotel- only = Widening the choice for their clients  Online Travel Agencies – actively promoting the widest range of independent travel components = Complete transparency & flexibility – biggest growth  Intermediaries – looking to provide a one-stop dynamic packaging portal for travel agents = Shift in focus to capitalise on new marketplace

9. Package Holidays “The report of my death was an exaggeration.” Mark Twain 1897  Package Holidays sold increased by 30% in 5 years  Slow to take off online and not enjoying the growth curve  Dogged by antiquated technology with lack of consistent standards  Lack of quality consumer driven content that supports the sale  Rigid commercial model of charter flight + hotel commitments  Not enough component flexibility

10. How have Consumer Buying Habits changed?  Dynamic Packaging is 100% consumer driven  Consumers becoming more independent  Shift to late booking  Control, choice, flexibility, competitive prices  Customer expects to search for, price and book all products in real-time  Desire to start self-packaging  Decline of traditional 2 week holiday

11. OTC – Consumer Booking Habits By month 2006 to 2007 Pre-Packaged web sales declined 7% in 2007 Dynamic Packaging has grown to 35% of sales

12. Drivers on Dynamic packaging

13. How do you enable your customers?  Key focus is to present a customer with:  The Right Product  At the Right Price  At the Right Time  And most importantly At the Right Margin  It’s just like selling sweets at a supermarket check-out

14. Advantages of this approach  Customer:  Unprecedented choice of product  Great Deals – Savings passed to customer  Real-time availability  Quality consumer driven content  Tailor-Made itineraries  Company:  Margins are always maintained  Move distressed inventory  Upsell and Cross Sell  Pricing is constantly updated  Avoid incremental costs i.e. brochures