The online and offline channels of the U.S. travel market are rapidly converging, according to…
The online and offline channels of the U.S. travel market are rapidly converging, according to PhoCusWright`s Online Travel Overview Fifth Edition, and one result is slowing online growth. Leisure/unmanaged business travel sites will surpass US$65.4 billion in 2005, representing about 30% of the U.S. travel market, and will reach $93.6 billion by 2007, roughly 40% of the market.
Previously, online growth was fueled by the shift from offline channels (mostly travel agencies) to online. Now the key driver is the shift of offline supplier direct sales to supplier Web sites. Online bookings will continue to grow at about four times the rate of the total travel market through 2007, a clear indication that share shift is not over. In 2005, the U.S. online leisure/unmanaged business travel market will increase 26%, compared to a 7% gain for the total travel market. By 2007, the growth rate is projected to slow to 19% – still four times the pace of the total market.
The online channel will increasingly resemble the total market as Internet leisure bookings outpace offline bookings. Car rental firms, hotels and especially airlines are reporting success in driving call center bookings to their Web sites. At the same time, record demand and firmer pricing helped the overall travel market to reach pre-Sept. 11, 2001 levels in 2004. Online players are fueling that expansion by facilitating access to products and destinations previously unknown to, or out of the reach of, a growing pool of travel consumers.
PhoCusWright`s flagship annual report assesses the U.S. online travel market by segment, channel and major player, projecting trends through 2007.
Other results from PhoCusWright`s Online Travel Overview:
- The top four U.S. travel distribution companies, Expedia Inc, Sabre Holdings, Cendant and Priceline web site, now control 97% of the U.S. online travel agency market, over half of the European online travel agency market and 12% of the entire U.S. travel market
- Nearly half of all airline tickets will be sold by leisure/unmanaged business travel sites by 2007
- Datamining, personalization, user-generated content and email campaigns are becoming increasingly important conversion-drivers
- Hotel, air and car rental Web sites are growing bookings at two and three times the rate of online travel agency bookings in those segments
PhoCusWright`s Online Travel Overview Fifth Edition details these trends and other factors and forces shaping the U.S. online travel market, including:
- Segment analyses for airline, hotel & lodging, car rental, packaging, rail and cruise markets
- Channel analyses with a focus on online travel agency and supplier distribution strategies
- Data and discussion on major players in the travel arena
- The impact of marketing and technology investments on the overall market
PhoCusWright`s Online Travel Overview Fifth Edition includes actual data for 2003-2004 and forecasts through 2007. It is the most comprehensive, consolidated look at the U.S. online travel market, and is supplemented with exclusive consumer research findings from PhoCusWright`s Consumer Travel Trends Survey Seventh Edition.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
