After you sign on, you can sign up Internet: A new report chronicles the growth of online travel purchases.

March 22, 1998|By Harry Shattuck | Harry Shattuck,HOUSTON CHRONICLE

A new report erases any doubt as to whether the Internet is dramatically affecting travel planning.

And travel spending.

The report, released by the nonprofit Travel Industry Association of America, finds that Internet users booked $827 million in travel products and services online in 1997. These purchases included air travel, lodging, car rentals, packaged vacations and other products.

This is triple the $276 million spent online on travel in 1996. It is the largest single segment on the overall online consumer market.

Moreover, it's merely the beginning of an online travel-spending explosion, suggests the report, "Travel & Interactive Technology: Five-Year Outlook," conducted for the TIA by Jupiter Communications, a New York-based media research firm.

By 2000, the report projects that online travel spending will top $4.7 billion. By 2002, it is expected to reach $8.9 billion.

"Clearly the Web is revolutionizing the way that consumers plan and buy their travel," says William S. Norman, president of the TIA, which represents all components of the industry.

Granted, the "revolution" is in its infancy. Worldwide, the TIA assesses travel as a $473 billion industry. And most purchases, by far, are still made through traditional travel agencies and through direct spending.

Still, the trend is evident.

In 1996, less than 1 percent of overall airline ticket revenue came from online sources. By 2000, this percentage is expected to reach 5.1 percent; by 2002, it will be 8.2 percent, according to the report.

"On line is emerging as a unique marketing environment in which traditional advertising and direct marketing merge," the TIA report suggests.

Among numerous findings, based on proprietary research models and in-depth interviews, the most telling numbers involve simple access to the Internet.

This has been primarily a U.S. phenomenon, with about 28.7 million American households now online. By the turn of the millennium, that figure is expected to more than double to 60.4 million households.

It's expected that worldwide access will grow even faster. A projected 36.6 million European households and 16.6 million Asia/Pacific Rim households will be online by 2000.

New browsers will discover what those already online recognize: The Internet is a wonderful tool for travel-related information. Literally at the click of a finger we can find details about pTC destinations, airline schedules and pricing, lodgings and tour packages.

We can read entire guidebooks online.

The challenge for those operating revenue-based travel sites is to entice us beyond virtual exploration. Looking-to-booking ratios full-service sites are lingering in the range of one booking to every 74 queries, according to the TIA report.

"Online travel booking will fulfill its promise of explosive revenue growth as credit card transactions made over the Internet become more secure," the TIA report projects. "Internet travel will also benefit as consumers become more comfortable purchasing over the Internet and begin using new electronic payment systems such as smart cards."

Big ticketers

The Travel Industry Association of America finds that six large full-service sites generate 75 percent of all online travel revenue. They are:

Travelocity/Easy Sabre (http: //www.travelocity.com or http: //www.easysabre.com), which more than doubled the nearest competitor in 1996 revenue

Internet Travel Network (http: //www.itn.com) Preview Travel (http: //www.previewtravel.com)

American Express Interactive Travel Services (http: //www.americanexpress .com/travel)

Travel Web (http: //www.travelweb.com)

Microsoft Expedia (http: //www.expedia.com)

Pub Date: 3/22/98

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.