UK Travel Site and Net Auctioneer Forge Marketing Alliance

In a bid to gain leverage in Europe’s increasingly crowded online travel market, London-based Internet travel agency Ebookers.com (Nasdaq: EBKR) and Web auctioneer QXL Ricardo (Nasdaq: QXLC) announced Thursday that they have struck a joint marketing agreement to cross-promote their travel services throughout the continent.

As part of the deal — which is effective in 11 European countries where both companies conduct operations — customers will be able to directly access QXL’s travel auctions and Ebookers’ flight booking facility.

The companies also said the partnership calls for inclusion of promotional content in their respective newsletters, which have a combined membership base of 4 million European subscribers.

Cost-Effective Co-Branding

QXL chief executive officer Jim Rose painted the alliance as a cost-effective method for both firms to boost brand awareness and more deeply penetrate the continent’s surging Internet user base.

Rose also noted that the partnership holds the potential for QXL and Ebookers to develop co-branded, integrated travel offerings in the future.

“We expect both QXL’s and Ebookers’ audience to strongly benefit from this complementary offering and geographic focus,” Ebookers CEO Dinesh Dhamija said. “This partnership is a natural result between two market leaders looking to offer their members easy and instant access to great value travel content.”

Crowded Field

Echoing the frenetic online travel market in the United States, the European Internet travel industry has grown increasingly competitive as independent travel agencies vie with airline sites to gain lucrative Web market share and meet surging consumer demand.

Online travel players also will have to contend with the impending launch of Opodo, a joint venture backed by nine leading European air carriers that is gearing up to go live with its flights and travel product offerings to consumers later this year.

According to recent findings by Jupiter Media Metrix, the number of consumers visiting travel sites on the continent spiked by almost 4 million between last November and April. In Europe’s three largest markets alone — the UK, France and Germany — unique users increased by almost 1 million each during the same six-month period, to hit a total of more than 10 million visitors.

Internet travel measurement firm PhoCusWright has predicted that the European online travel market will soar nearly 300 percent from US$2.9 billion racked up in sales in 2000 to $10.9 billion in 2002.

Home Court Advantage?

Ebookers, which was spun off in 1999 from London-based travel agency Flightbookers, has taken a number of steps in recent months to cut costs, saying it aims to achieve break-even cash flow in the fourth quarter of this year or the first quarter of 2002.

Last month, the company moved some of its operations to India and also opened a customer service call center there in an effort to trim expenses.

On the auction front, QXL also has had to fend off Internet auction powerhouse eBay (Nasdaq: EBAY), which began expanding overseas in 1999 and has set its sights on the growing European e-commerce market.

In March, eBay launched three international Web sites, setting up shop in Ireland, Switzerland and New Zealand. Additionally, eBay has sites in Germany, Austria, Japan, Australia, Italy and Korea, and also bought French online auction house iBazar.