Ebay in major travel push.
Wednesday, 20th June 2007
Source : By Tricia Holly Davis, chief writer at Travolution
Online auctioneer eBay is on target to unveil a full-fledged online travel agency model, perhaps at last giving signalling to the market that the online auction giant is serious about travel.

An indication of eBay's intentions for its travel business is the creation of a new dynamic packaging platform, which is being designed by travel technology company Cultuzz, the current supplier of accommodation content to eBay.

Michael Hughes, head of sales and marketing for Cultuzz, says the new dynamic packaging feature will work with both eBay's auction and fixed-rate pricing models.

The product is scheduled to go live on eBay's German site in the fourth quarter of this year and should be available on the UK site next year, according to Hughes.

EBay members can currently bid or use a Buy It Now function to purchase the usual array of travel products including air tickets, package holidays, hotel accommodation, city breaks, car hire and rail travel.

If the plans revealed by Hughes come to fruition, eBay will combine air tickets and accommodation to create package holidays of its own.

Hughes says the dynamic technology being developed by Cultuzz will not be exclusive to eBay and could be used by other travel providers.

EBay will be forced to provide ATOL protection to consumers if it is bundling individual elements of a trip into a single priced product.

Another reason to believe eBay may have a keener eye on travel is the potential synergies with the site's recently-acquired assets, including event ticket distributor, StubHub and community marketplace site Kigigi.

EBay is also realising more of its revenues from its fixed pricing model, which is more suitable for many travel products than an auction model. About 50% of eBay's gross merchandise volume is now related to fixed prices.

Hughes says things are different this time around, with eBay's headquarters devising a global travel strategy, rather than only leaving it up to individual regions. "The door to the head office is now open. EBay is definitely planning to globalise travel in the foreseeable future," says Hughes.

EBay, typically, remains tight-lipped about its travel strategy. A spokeswoman refuses to confirm the existence of a high-level meeting earmarked for late-June in the US to discuss the company's plans for travel.

Furthermore the UK office would not discuss dynamic packaging or ATOL bonding requirements.

The silence is understandable at this early stage.

After all, eBay has on more than one occasion – in the US in 2002 and at a UK travel conference in 2006 – made the mistake of promoting an emphasis on travel, only to fall short of supplier and consumer expectations.

Analysts and suppliers remain sceptical about whether travel is a priority for eBay. Either eBay's reluctance to discuss an apparent shift in strategy for travel is some stealth attempt to throw its competitors off track or its cynical observers are correct.

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