When we review the year in interactive travel, the big story probably won’t be the Travelocity.com/Preview merger, the Getthere.com and Expedia.com IPOs, or even Amazon.com’s foray into the travel business (click here for my take on those events).
It will, instead, be the launch of BuyTravel.com, the joint venture of United Airlines and Buy.com.
The reason? My new printer.
Last week, I was shopping around for a new printer, and I found the absolute lowest price on a new Hewlett Packard OfficeJet R80xi at Buy.com.
In fact, it was priced so ridiculously low that I wondered for a moment if it was too good to be true. But it wasn’t. Less than 24 hours later, Buy.com delivered a real R80xi to my doorstep.
I thought: If Buy.com can do the same thing for travel, we’re in trouble. Big trouble.
Exactly how the still percolating travel site intends to duplicate the Buy.com formula is a matter of intense speculation and uninformed conjecture. In a niche dominated by Cheaptickets.com and Lowestfares.com, what is BuyTravel.com going to do?
Here’s a look at what the venture has going for it –- and what it means to the rest of the business.
Deep pockets. United Airlines and Buy.com have sunk a considerable amount of resources into BuyTravel.com (they won’t talk numbers, except to say they’re “very serious” about this project) and they aren’t expecting a cyberspace miracle in return. No rosy predictions of income from commissions, overrides or other kickbacks are in the business plan. In fact, its main source of revenue in the near-term will be from advertising. I wonder how many other travel e-commerce sites see it that way?
What it means for the rest of us? BuyTravel.com is prepared to wait until everyone else’s venture capital dries out and will then dominate its corner of the discount tickets niche by being the last site standing.
A “me-first” attitude. By consolidating the distressed inventory offerings of a number of carriers –- not just United’s –- BuyTravel.com is staking out relatively new territory. If it can pull this off, then it will have a lock on some of the most sought-after airline tickets in existence. Of course, the company still must ink deals with a few UAL rivals before it can launch, and that may take some doing. There’s some scuttlebutt that contract discussions are dragging on and could postpone the grand opening to the first quarter of 2000.
What it means for the rest of us? Remember when we brushed off Amazon.com as another online bookstore? Or we dismissed eBay as another bid site? Let’s not make the same mistake here.
Killer instincts. It goes without saying that Buy.com enjoys (or some would say, is dogged by) a reputation that it goes for the jugular. My personal experience tells me that Buy.com takes no prisoners. I asked a competitor to match Buy.com’s price for my printer and he just laughed. BuyTravel.com is still shopping around for a booking engine and may not select Internet Travel Network’s old offering, (now under the name of Getthere.com) in which UAL owns a big stake. “Getthere.com is being considered,” one insider said, “but we’re looking at a lot of other players.”
What it means for the rest of us? I’d like to see the expression on that sales representative’s face -– the one who told me he wouldn’t match –- when they hand him his pink slip. I’ll bet you he won’t be laughing.
A healthy skepticism of the stock market. Granted, Getthere.com is going public, but the word from inside the BuyTravel.com camp is that there’s no plan -– short-term or medium-term — to do an initial public offering. This is a very reasonable decision. As we’ve seen time and again during the last four years, interactive travel and Wall Street don’t always play nice together. The venture capitalists get impatient and then dump their stock in a fire sale. Or worse, the market bids the publicly-traded shares lower and lower until the company must be acquired.
What it means for the rest of us? Rethink your IPOs.
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.
Elliott is consumer advocate 
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