E-Commerce Times Talkback

Re: Cheap Tickets To Close Offline Stores Amid Flattening Profits
Posted by: Michael Mahoney 2001-08-06 08:37:40

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Cheap Tickets, which sells travel tickets through retail outlets, over the
Internet and by phone, reported a profit Thursday for the tenth consecutive
quarter, announcing diluted net
income for the second quarter ended June 30th of 5 U.S. cents per share.

However, the quarter did not provide a perfect landing for Cheap Tickets.
The company announced it is closing its offline retail travel stores, in
order to reduce costs and improve efficiency. Cheap Tickets said it will focus all
of its resources on the company's online and call center businesses.

Re: Cheap Tickets To Close Offline Stores Amid Flattening Profits
Posted by: Steve Nelson 2001-08-06 08:52:50 In reply to: Michael Mahoney

I can fully appreciate Cheaptickets wanting to reduce expenses by closing b&m stores if these locations were not profitable for the organization. However, another alternative is to franchise its name and pricing power with properly selected local travel agencies around the country.

Good travel agencies will be able to dramatically expand Cheaptickets' reach by being physically in local markets. Consumers will be able to look and book online with Cheaptickets and service their bookings through a local store. These stores would not be a drain on Cheaptickets' cashflow because they would all be independent. In fact, I think that these stores would become a revenue stream for Cheaptickets (or whatever online travel organization begins to use this format) due to franchise fees. The local travel agency would take a haircut on their commission so that both parties could participate.