Even in an industry full of hyperbole the claim by tour operating giant Thomas Cook that it will become one of the top online travel agencies in Europe needs examining.
The London-listed PLC, headed my CEO Manny Fontenla-Novoa, says it has identified a gap in the marketplace to wade and challenge the likes of Expedia and Priceline to become a dominant online travel agency.
Simple so far.
The company said at its investor day in March 2010 that it saw a major opportunity to come in against the established players because the dynamics (and, indeed, fragmentation) of the European sector were fundamentally different to that of the US, where Expedia, Travelocity, Orbitz and Priceline run the lion's share of the OTA business.
In Europe, where Expedia, Opodo, Priceline (through Booking.com) and Travelocity (through Lastminute.com) capture around a third of the OTA business, according to PhoCusWright research from 2008, around half of the online agency revenues are still largely untapped by a major player.
Cue Cook's strategic shift.
The company says it has also identified major openings in the markets in Spain (eDreams anyone?) and Italy to make significant progress.
Fontenla-Novoa says the company wants to have direct contracts (like Expedia, Booking.com et al) with thousands of other hotels to add to its existing portfolio of beach product, a process that will need to be repeated with airlines presumably, both charter and low-cost, as well as it's own fleet.
Thomas Cook has spent the past few years snapping up hotel contracting firms (bedbanks) in the shape of Hotels4u and MedHotels (from Lastminute.com) to increase its stock.
Meanwhile, the company says it will use the Thomas Cook brand to front many of its country OTA sites. But if it wants to go head-to-head in a serious way against the big boys of Europe, many questions mark remain.
NB: Officials at Thomas Cook have refused to shed any significant light on how it might achieve such lofty goals.
- Contracting hotels is a resource and cost-heavy business - although Booking.com and others are showing that growth can be achieved quickly and, apparently, leanly.
- Marketing will be a key factor. Shifting the existing bucket-and-spade mindset of millions of potential customers to that of we-do-everything-through-everybody will take significant doing.
- Acquisitions are where many see the opportunity. Thomas Cook apparently has a warchest for such delicate matters and everyone from Opodo and Travelrepublic to eDreams and Ebookers are mentioned privately as possible targets.
- From a technology standpoint, things could be better. The BlueSky debacle left Thomas Cook with a cloud hanging over its tour operating reservation system, although it stresses progress is being made. Nevertheless, it admits "some investment" is required.
Interestingly and perhaps significantly, Fontenla-Novoa has surrounded himself with some important folk in recent months.
Ex-Expedia Europe president Simon Breakwell is still on the books as an ecommerce consultant, despite his seemingly bigger play in Seattle with other Expedia alumni through NewTravelco, while even the appointment of Five TV boss Dawn Airey as a non-executive director suggests to some that fresh thinking ahead of such large ambitions has been the order of the day at a board level.
Some suggest that speed is now the most important factor for Thomas Cook and its goal.
It may have to contend with competition from its major rival across Europe, TUI Travel (which presumably could try the same thing), as well as the marketing muscle and first-mover advantage of those already in play.