Digital Boomerang Singapore 

While other types of websites have been struggling to create successful business models, travel sites have been turning profits much to the glee of investors.

Travelocity closed out its fiscal 2000 with losses narrower than expected. Gross travel bookings more than doubled to US$2.5 billion. Surprisingly, majority of the revenue was from non-air travel and online advertising.

Similarly, Expedia reported a smaller loss than expected for its fiscal 2000 and profits seem to be rounding the corner. Just last week, Expedia reported its first operating profit with earnings of US$4.4 million for the quarter.

The principle for their success is simple. A single point of all sorts of travel information at your fingertips. Instantaneous inventory checking and booking. No more being put on hold by irate telesales men or women and complete avoidance of aggravation from them.

Priceline.com, pioneers of the “name your price” travel concept, recently reported a quarterly profit of US$0.06 per share. In the last quarter, Priceline managed to add more than a million users to their customer base.

Given the track record of Priceline.com, the turnaround is impressive. The site almost became a dot-bomb when it decided to diversify into groceries and gasoline. In addition, its business practices were being investigated due to customer complaints about the services provided.

The three websites stand a very good chance of weathering the dot com gloom. However, it remains to be seen if they can continue to turn profits. To do so, they would all have to maintain a competitive advantage over other players in the market.

A real threat to all three sites is Orbitz.com. This website is the result of a venture by five airlines: Continental, United, Northwest, American and Delta.

For the time being, these three sites are killer webapps that have been said to be “sweet spots” in e-commerce.

- First published on IT AsiaOne, News

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