Supermarket giant Coles is dipping its toes into the online travel booking industry with the launch of Flybuys Travel.
The stand-alone website, which is a result of a partnership with Corporate Travel Management, allows shoppers to cash-in their Flybuys points when booking flights, hotels or cars.
The online travel booking industry is worth big bucks in Australia and is becoming an increasingly competitive space.
Overall revenue for the sector has been growing at an annualised rate of 13.8% over the five years through to to 2015-16, according to market research from IBISWorld, which values the domestic online travel booking industry worth approximately $728 million.
Adam Story, the general manager of Coles Flybuys, told news.com.au Fluybuys Travel is the result of listening to customer feedback about the supermarket’s rewards scheme.
“I think what our competitors proved is there isn’t one solution for everybody,” Story said.
“Many say they want money off shopping, and our $10 vouchers remain popular. But many say they want to save up their points for something meaningful, whether that’s travel or buying an iPad.”
Some of the online travel booking industry’s biggest players include Booking.com, Webjet and Expedia, which took over Wotif in 2014.
However, they can expect stiff competition from Flybuys Travel, with Story indicating the new site will not just be a cash-cow for the supermarket giant.
“We’re not relying on this as a profit generator,” he said.
Tristan Williams, senior industry analyst at IBISWorld, told SmartCompany the online travel booking sector in Australia has grown rapidly over the past five years.
IBISWorld is forecasting an annual growth rate of 8.1% over the next five years.
“We’re expecting it to continue to grow over the next five years… to reach about $1.1 billion,” Williams says.
Williams says this this is due to a wide range of factors, including people’s increased willingness to book holidays online and the strong Aussie dollar.
“Online travel booking operators have an advantage over bricks-and-mortar stores because they can offer lower prices, mostly due to lower overheads,” Williams says.
“Also, we’ve seen a strong rise in these players using mobile technology – so optimising their sites to function on mobiles.”
Broede Carmody is a former senior SmartCompany reporter. Before this, he was a co-editor of RMIT University’s student magazine Catalyst.
