eGulliver’s travels end – but who’s next?

eGulliver’s travels ended swiftly last Friday when the money ran out. Seems one of the Atlanta quasi-agency’s investors got spooked by online travel’s Lilliputian returns and withdrew funding, bringing the site’s voyage to a sudden and unceremonious end.

There goes another one.

You can’t help but feel like an orderly in a Dutch retirement home these days. It’s all strangely reminiscent of the summer of 1998 – the first time online travel companies started consolidating – when travel consultant Philip Wolf asked delegates to a Travel Technology Association predictions dinner “who’s next?”

Who is next?

Well, I am. This is my second-to-last column. After more than five years of covering the ups and downs of the interactive travel business, the powers that be have concluded there are too many “downs” and not enough “ups” to keep a feature like mine around. The online travel stock index that I helped start two years ago is off nearly 80 percent, but it’s really a lot worse than that. The aggregate of issue prices basically went into a freefall from the moment it was created, steadily tracking the failings of our industry. I’m surprised that they waited this long to kill the messenger.

Who else? Nobody knows.

At dinner three years ago, Wolf offered a list of candidates, including American Express’ AXI service, DirectLink Technologies, E-Travel, Internet Travel Network, Sabre Business Travel Solutions, Via World Network, and Xtra Online. If most of these names don’t sound familiar, it’s because some of them aren’t around any longer. They’ve changed names, merged with other companies or quietly been folded back into a parent company’s operations.

I could, however, make an educated guess …

- The metasearch massacre. There’s a glut of so-called metasearch engines – sites that let you conduct simultaneous fare searches from multiple travel sites – with Airlineguides.com, FareChase, Qixo and SideStep all vying for the same customer. They can’t all survive. Margins are slim to nonexistent in this niche and from an end-user’s perspective, there’s very little difference between the players. The best of these metasearch applications won’t necessarily survive – it will be the best-marketed, best-funded and ultimately, the best at making money. This has little to do with how effective these sites are at doing what they’re supposed to. Bottom line: wait for the shakeout before investing in one.

- The Orbitz effect. It’s ironic that on the same day eGulliver expired, the U.S. Department of Transportation announced it won’t prevent the awkwardly-named, much delayed online travel agency being developed by five big airlines to begin operations or require it to change its business strategy. Ironic, because of the date – Friday, the 13th. Now more than ever, it’s likely that investors in a mid-list travel site that sells airline tickets and other travel products will ask “why bother?” That’s because when airlines control a distribution channel like Orbitz they’ll eventually remove what’s left of the incentive for anyone else to sell airline tickets on the Internet. Conventional wisdom: stay away from mid-list travel sites that sell airline tickets – for now.

- Bidding adieu. We can’t say for certain when bid sites went out of fashion. Some say it was William Shatner’s taped confession that he’d never bought a plane ticket on Priceline.com. Then again, maybe it was news of Bid4Vacations.com troubles or the demise of that pathetically underfunded but eminently useful Travelbids.com last year. There’s no telling. But one thing is obvious: bid sites are the proverbial albatross hanging from this industry’s neck, and it could very well get to the point where none exist at all. That’s not to say we won’t be making bids on our trips – only that bid processes will probably be integrated into more established booking sites. Word to the wise: stay away from the whole sector. If you’re in it, get out while you still can.

There you have it. No need to attend another overpriced dinner to get a list of tomorrow’s online travel casualties. They’re right here flailing around for all of us to see.

See you at the funeral.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

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