Travelocity SWOT Analysis - Essay Example

We market these net rate offerings to travelers at a price that includes service fees that we retain, plus an amount sufficient to pay the travel supplier for its charge for providing the travel accommodations, along with any applicable occupancy and other local taxes on that charge. For this type of business model, we require pre-payment by the traveler at the time of booking. High customer acquisition costs, as the marketing and promotional costs are quite high to deal with and it is challenging to upgrade the features of online portal quite often.

A new feature from competitor keep Travelocity on toes as it may deviate Travelocity's customers. Customers may reduce transactions through our distribution channels, which could reduce Travelocity revenues: business segments have objectives that lead to conflicts with customers of other business segments related to parent company "Sabre". For example, Travelocity and Travelocity Business operations compete with travel-agency subscribers of Sabre Travel Network. That competition could cause current or potential travel agency subscribers to elect to use competing GDS providers, websites or other channels of travel distribution, which could reduce our transaction fee revenue and materially adversely affect our business.

Opportunities:Sustainable global corporate customers' growth creates an opportunity to provide right customer experience and extend the corporate associations for a long period of time. As travel industry is extremely competitive, companies have to target to retain their most valuable clients. Along with retaining clients it has to look out for new clients & markets for considerable growth opportunity.Opportunities to explore the new markets as the internet penetration in developing countries is on raise and E-Commerce is evolving tool for travel purchase.

Countries like India where internet penetration is picking up at rapid pace have to be explored with aggressive marketing and promotional strategies. Opportunities exist for online booking for rail and road travel across the globe as it is the basic mode of the common man's travel.Threats:Economic downturns, rising fuel costs and the financial instability of travel suppliers in recent times have bought the confidence levels of travel markets to an all time low.Political instability, acts of terrorism, hostilities and war have created a negative perception on the travelers mind