By: Beth Malmborg
• Industry Overview
• Company Overview/History
• SWOT Analysis
• Market Opportunity Analysis
• Evaluation Plan
• People are now able to book their own flights
and vacations while being able to jump from
website to website in order to find the best deal.
Among the most popular online travel agencies
are Travelocity, Orbitz, Expedia, and Priceline.
• What makes this industry so strong is the
growing amount of people as well as companies,
using the internet. The internet is a great deal
faster than finding a traditional travel agency.
•Travelocity is a leading provider of • Since their launch in 1996,
travel services. They market and Travelocity has won many award
in both the travel and internet
distribute travel related options categories of their business.
through their website and websites Among these awards are the
owned by their suppliers and Stevie Award for Best New
distribution partners. Online, Product of Service. The award
was in recognition to Travelocity’s
customers can access offers, and TotalPriceSM, which offers
pricing information about airlines, comprehensive pricing information
hotels, car rental companies, cruise for rental car reservations with just
lines, vacation and last-minute travel one mouse click.
packages, and other travel-related • Travelocity was also named the
“World’s Leading Travel Internet
information. For business travelers, Site” for the eighth consecutive
there is Travelocity Business. year in a row in 2004.
• Travelocity received the highest overall ranking in the
Online Customer Respect Study, conducted by the
Customer Respect Group, in 2003. Travelocity received
a rating of 9.2 out of 10 – the highest overall among all
• Travelocity was named winner in the Transportation
category at the Computerworld Honors 21st Century
Achievement Awards in 2002. This award recognized
Travelocity as an innovative company leading the global
information technology revolution.
• Travelocity won the Best Online Distributor award at the
2002 Air Transport
• Award winning in online • Increasing travel demand
services • Repeat customers
• Easy to use web site • Business Travelers
• Increasing revenues
• Recent acquisition of
• Many online competitors
Weaknesses: • New innovations of competitors
• Seasonal Traveling
• Increasing customer acquisition
• Demand for Business Travel is growing, and
revenues are increased since the launch of the
Travelocity Business segment. This allows
business to book trips quickly and receive deals
• The Travelocity TotalTrip segment and Last
Minute Packages has increased its packages
revenues $48million since its launch in 2003.
• Both the Business and Packages
segments target consumers who want
quick, easy, cheap transactions and don’t
want or have the time to spend on travel
agents. These groups of consumers need
online programs to do their business.
“The Travelocity Guarantee assures that when you book with
Travelocity and encounter any problem with your booking, we'll
work with our partners to make it right.”
Travelocity offers the best guarantee for travel than any
other online travel agency. They concentrate their
advertising on this guarantee and it assures people of a
worry free vacation. At least when it comes to the
Travelocity end of the bargain. The thought of not
having to worry about something going wrong with hotel
reservations is enough to make many customers go
• Increase International transactions by 5%
from the 2004 ytd totals.
• Increase revenues 10% from 2004.
• Reduce acquisition costs from $14million
to $ 10million.
• In order to increase the international transactions,
Travelocity acquired lastminute.com, this made them the
leading online travel agency in Europe. They need to
concentrate more advertising in that area and make
consumers aware of this acquisition.
• To increase revenues, Travelocity needs to spend time
trying to cut costs, this way they can stay competitive
with their prices.
• The main cost to be cut would be in the selling, general
and administrative area. The largest cost being the
customer acquisition. There has been an increase in
advertising in order to acquire new customers. With the
advertising being based on their guarantee, this could
help retain customers and decrease the need for so
much advertising, therefore decreasing the cost.
Year Ending December 31,
2004 2003 2002
Revenues $502,549 $394,508 $338,772
Cost of Revenue 224,386 203,392 187,612
Gross Profit 278,163 191,116 151,160
Selling, general, and 273,189 249,893 221,477
Operating Income (loss) (20,498) (100,331) (105,359)
• Increasing international business with
• Increasing business travel with Travelocity
• Increase customer retention with
• Increase online transactions with easier
• Travelocity should evaluate their progress
through their finances. Right now they
have a negative operating income and if
they can get a positive operating income,
then they should look into what they have
done to change that.