Travellers turning to direct online bookings

If one thinks that online fares work out much cheaper, they do, however one is faced with airline transaction fees to a lesser extent. So is the zero-commission model, which has become quite common in many parts of the world, leaving an effect on local tour operators?

Is economic uncertainty coupled with the increase of direct airline online bookings accelerating mergers, acquisitions as a constructive response to tough times?
It's important to note that travel agents and tour operators don't only offer the airline ticket but also offer a package of services including the air fare, accommodation, transfers, guided tours and various other types of services including peace of mind.
The rise in acquisitions and mergers of travel agents and tour operators in Malta could mean that amalgamating together could prove to be more profitable than working against each other.
According to Kenneth De Martino, managing director, KDM Travel, "it's a combination of situations that have started the process of acquisitions and mergers that have taken place in Malta.

"Low-cost airlines coming to Malta, the concept of dynamic packaging, the sustainability of travel agents and the issue of purchasing power with suppliers have all contributed, as well as online booking systems.

"Venturing overseas has also been another catalyst to instigate mergers within the travel trade and some Maltese companies have been quite successful in doing so."
KDM travel, whose core business is outbound travel, had acquired Travel Deals Ltd, a supplier of hotel accommodation worldwide to travel agents both locally and overseas. Travel Deals adds a new dimension to the wholesale concept of the travel industry within the KDM Group whilst complementing the activities of all branches of KD Travel, Paradise Travel and JPE Travel which have now all been rebranded as KDM Travel.
De Martino said that "it is also becoming quite noticeable that travel agents are specialising even further in specific lines of business such as Business Travel which is a segment within the industry that is still growing and leisure travel which is a combination of tour operating including charter business and individual travellers who tend to use low-cost airlines and book their accommodation online.

"Whilst online booking has taken off in a big way, one must not underestimate the fact that travel agents are still good value for money and offer a service (at times also online) which is second to none."
DeMartino confirmed that "travel agents have embraced technology and could therefore offer better service to their client base in an efficient and economical way", adding that "this is the way forward for travel agents and mergers and acquisitions will only strengthen the industry and offer quality service to the discerned traveller".

Meanwhile, Richard Tua, director Unique Travel, which falls under the FCm Malta umbrella, among other travel agencies such as Howards Travel and EC Travel Services Ltd, told BusinessToday that "as travel agents we have felt the pinch due to online bookings but one has to be innovative and create tools to remain competitive", referring to the Group's online booking engine www.top3travel.net.

FCm is a global travel management network and is represented in Malta by FCm Malta comprising the above-mentioned three travel agencies.

The strategic and successful merger," according to Tua, "has helped the Group expand faster", while adding that the "travel merger business started off back in 2006 and today most companies are following suit".

Other mergers include the SMS-Mondial which took place last year, SMSMondial being Malta's retail arm of Orange Travel Group, and the

In 2010, In the UK for instance, holiday firm Thomas Cook and the Co-operative Group had merged their stores and foreign exchange businesses, to create the nation's biggest high-street travel chain, with both branches continuing to operate under the same brand names.