Surfing the net for best deal makes big waves

The battle of the travel websites rages on with the House of Travel claiming first-round honours.

Travel agents worldwide are struggling to cope with the trend to booking air travel and holidays online.

The New Zealand-owned House of Travel chain, which launched its online booking service last year, says it has been the No 1 travel agency site in four of the past five months, as measured by the Hitwise ratings system.

Its main rival, Zuji, also launched late last year, is owned by locally listed travel company Gullivers. It is the New Zealand wing of the global Travelocity network.

Zuji New Zealand general manager David Allen said many travellers around the world, for instance in the UK, were now using the local site to buy travel.

"It is a small market, so everything needs to be done as efficiently and as cost-effectively as possible.

Neither site claims to provide the cheapest tickets, since they both charge a margin on each one sold. But they do claim travellers get the best deals - which could mean flying one segment of a trip on an airline that flies a particular route only a few times a week.

Zuji is based on GDS - the global distribution system used by agents to get access to seats on aircraft and hotel rooms.

The House of Travel, which does not sell long-haul international flights online, "scrapes" airline websites, putting this information alongside that on the GDS system.

The Flight Centre, listed on the Australian Stock Exchange, took quite a hit last year, with its share price dropping from A$22.80 ($25.04) to around A$16, partly because of the stiff challenge it faces from online agencies.

The House of Travel is trying to move its income sources away from airline commissions towards fees for services and margins on selling wholesale packages.

Allen said there was little advantage in web scraping and the House of Travel site was more about "supporting" its retail network of travel agencies.

Gullivers and Zuji had taken a different path, with the Zuji model having a "much stronger engine behind it".

Allen said many people did not want to pay for the extra advice from travel agents. "The Zuji method is you don't have to pay for services you don't necessarily want."

Online travel was enjoying the benefits of other online retailers who had established its reputation for quick, secure purchasing.

House of Travel retail director Brent Thomas said most of its online sales had been new business, not "cannibalised" from the company's own chain of travel agents.

He said a surprising statistic was that 67 per of the company's online bookings involved flying one way on one airline, then coming back on another.