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The Digital Revolution

Speaker Transcripts

Coping with the Inevitable - Going Global
Dinesh Dhamija, Flightbookers

I'm going to talk about four things - price, convenience, security and geography. I will home in more on geography with the Euro coming in on 1 January and how things are going to pan out the way I see them.

Price. Brochure costs and other paper sales tools will go down over a period of time. By the way, Harvard Business School did a study and they think by the year 2010, 27% of all travel bookings are going to be on the Internet in the States. All these figures differ all over the place but that's what they thought. Which means you are going to have telephone sales and you are going to have walk in sales but it's not going to be just Internet.

Sales consultants time. I don't think sales consultants are going to get sacked because of the Internet but what will happen is that they will start adding on value to bookings. A booking might come in as a flight and they might sell hotels, cars, insurance and other things rather than just doing the donkey work in trying to sell a flight. You know that there are often five or ten calls for making one booking and all that's going to go down to increase profits. E-ticketing is coming in. United and Continental are already doing that in this country. That's going to save a lot of money.

Postage, paper. All that's going to be good. Bricks and mortar cost. You won't have to open as many agencies in the High Streets anymore. You can have one or two. This will be much better in terms of costs. The other thing is direct mail. We've been doing direct mail and travel companies do direct mail. It's a hit and miss affair. With the Internet with the push technology, we're going to be able to generate automatically stuff that is precise to the person and that's going to help a lot with our bookings. So the unit costs of each transaction is going to come down. (Anyone who wants a copy of this presentation, just give me your email address and your card and I will send it to you.) BT did a survey recently. 20% of people shop after hours . Shop when you want. Corporate and frequent travellers who are not near their travel agents, people who are affected by disabilities, deaf or dumb, don't like going to travel agents. They can deal from their own drawing room or wherever they want.

Security. There is this thing that security is pretty bad on the Internet and we can't really trust it, there are hackers, Citibank got taken on and so on and so forth. Let me tell you that my premise is that it's the other way around. There are two or three protocols -SSL, SSR, SET, digital signature. These are happening and they can secure your card payment transactions from hackers. In fact NatWest and Barclays and others are now using it and allowing us to use it. Compare this with 80% of our customers who give their credit card numbers over the phone. Anyone can tap in to get those numbers and of course thousands of people give their cards to waiters in restaurants, with signatures. My premise is that the Internet is far more secure than the telephone.

I think there is a huge opportunity in Europe. The Euro is going to happen in 11 countries with a population similar in size to the US. One currency like the dollar in the US and what's going to happen is that prices are going to become more obvious because the law is that you've got to put down the Euro price in Europe. So the Euro price will be the common denominator and prices are going to come down. There is an article in Time magazine where I got this from. Because of the exchange rate certainty, we're going to have a reduction in price. It's as simple as that. You don't have to put in a margin for fluctuation. What's going to happen is, I feel, that the outward looking European agents are going to start moving out of their own countries. France, the German agents etc and move them to the other countries because there's one currency. They already have offices in all countries but they will start moving aggressively. Then after that, once they've got the systems developed, they can move into any country and the next target is going to be us. So what we've got to do is expand our distribution systems to encompass Europe if we're going to match them. And I think the Internet provides that quite easily. To do this we need support from our suppliers. We have already started talking to our suppliers and most of them are quite receptive.

Ticket issuance from a single European site. Like what happens in the US. BSB rules and IATA rules might have to change. Negotiated fares and specials are coming through from airlines so much faster because of the improved programs. What we want is for them to load these electronically because it will just become impossible because you're doing it over 11 or 12 countries, including Britain. We'll need to establish links with courier companies and post offices, to guarantee three day delivery, overnight delivery, seven day delivery. Credit card authorisation regulations. They might be different in different countries. We hope not but we have to check them out. Where are we going to get service from, which banks are going to be used? Will we need a European bank for the Euro and perhaps an English bank as well?

Data protection. We know that Brussels has got their own data protection laws. They were supposed to come out in October and I don't know whether they will still come out now. We need to check if those laws are the same as British laws. Will we need to improve ours or not? Will we need to make software changes in accounting, invoicing etc? At the moment we sell insurance to people who are resident in the UK. All our brokers and underwriters will have to give us the capacity to sell insurance to western European countries.

Supplier pricing. I feel that the 11 countries will become five or six regions. You won't have different pricing in Austria and Germany when you're dealing with Salzburg and Munich which are only about 80 miles away. So if you buy by departure airport, those will become the same level in price to various destinations. The alternative is if the suppliers don't help us, which I am sure they will, we'll have to open up, not relocate, a separate site in Europe. I have a few quotations and other things about why I like the Web so much. You know I like the Web but I think I'll finish there. Thank you very much.

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