Online Travel Sales Up 146 Percent in 1999

The number of travelers booking airline flights and hotels over the Internet has increased 146 percent in the past year, according to a report released this week by the Travel Industry Association of America (TIA).

The report shows that 16.5 million travelers bought tickets and made reservations online in 1999, while another 35.7 million travelers made travel plans online and then purchased tickets or booked rooms offline.

The report, titled “Travelers’ Use of the Internet,” found a strong correlation between frequent traveling and booking reservations using the Internet. Of the 16.5 million who actually purchased travel over the Internet, 8.2 million are frequent travelers, making five or more trips during the past year.

The report also found that most travelers are satisfied with their online travel planning experience, with nearly one half — 45 percent — saying that they will use the Internet more this year for travel planning and reservations.

Earlier Research Supports Growth Findings

The growth of e-commerce by travelers reported by the TIA is consistent with data reported in the E-Commerce Times earlier this month by research firm GartnerGroup, which indicated that the travel industry is positioned for strong growth during the coming years.

GartnerGroup predicts that travel e-commerce will increase from $5 billion (US$) in 1999 to an annual rate of $30 billion by the fourth quarter of next year, a six-fold expansion in less than two years.

GartnerGroup analysts believe that the rush to Internet travel planning and reservations will drastically alter the leisure travel industry. “For most leisure travel firms that are not yet successfully online, it’s already too late,” said Lou Marcoccio, research director for GartnerGroup’s e-business transformation service. “By the second quarter of 2000, nearly all leisure travel companies that do not offer competitively designed online reservations, ticket sales and customized travel information will be driven out of the business or acquired.”

Travelers and Internet Usage

The TIA report, which was based on telephone interviews with 1,200 U.S. adults, found a number of additional ties between travelers and the Internet:

Among the 85 million people who travel and use the Internet, 62 percent go online to get information on destinations or to check prices and schedules. Online travelers are more likely to be younger, have an annual household income above $75,000, be college-educated, and work in a professional or managerial position.

The most popular type of site for travelers who make reservations online are company sites that sell directly from airlines, hotels, rental cars or package tour companies. Fifty-one percent buy from company sites. Another 39 percent buy from commercial services such as Microsoft Expedia, Travelocity or Priceline.com.

For travel planning and searching, travelers are more likely to use search engine sites such as Yahoo!, Excite and Lycos, which were used by 62 percent of travel planners. Fifty-one percent used destination sites for specific cities, states or countries.

Most Travel Planners Do Not Buy Online

Both the TIA and GartnerGroup reports revealed that most of those who plan travel online do not actually purchase online. GartnerGroup cited two reasons why Internet users are reluctant to buy online.

One reason is that travelers often have further questions to ask a booking agent regarding special needs, while the second reason is a general perception that the ticket ordering process is not flexible enough to provide seat assignments or handle special meal requests. Security concerns are also a factor.