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Travel
Online Revenues To Double by 2007
The online travel industry will
double its revenues in the next three years, from $38 billion
last year to more than $80 billion in 2007, according to a report
released Tuesday by New York research firm eMarketer.
This growth potential, combined with the "ongoing realignment,"
could lead to a new push to "establish market share in online
travel," said eMarketer senior analyst Noah Elkin.
The most recent industry
consolidation came last month, when travel and hotel-franchising
giant Cendant Corp. agreed to acquire online travel company
Orbitz for $1.25 billion in cash. Cendant--previously the third
largest player in the industry behind Expedia, a
unit of InterActive Corp., and Travelocity, a unit of Sabre
Holdings Corp.--is now second only to Expedia.
The travel industry accounts
for 24 percent of all online advertising, including
permission-based e-mails, search engine marketing, and online
impressions. Of those advertising methods, search engines "are
the most promising form of advertising that's emerging at this
point," said Elkin, adding that search engine marketing is
cost-effective, and that consumers are likely to see such ads
because they research destinations on search engines.
Despite the companies' attempts
to establish brand identities, customers seem to view them. "Site
loyalty is still pretty limited," said Elkin, adding that
consumers site-hop when making travel plans.
The report also broke out
online revenues for airline tickets, lodging, rental cars,
vacation packages, Amtrak, and cruises. Within that group, online
revenues for airline tickets were the strongest, with projected
revenues of $32.8 billion this year, according to Forrester
Research data cited in the eMarketer report. Hotel revenues came
in second--but with only $16.4 billion, half the projected
revenues of airline tickets.
One reason that hotels are so
far behind airlines appears to be that many consumers still
prefer to use the telephone to book hotel rooms, especially if
they have specific requests--such as an extra bed in the room.
"The Internet may win more often than not in price," said Elkin,
"but there are still things that live people do better than the
Internet."
More information on the Travel
Statistics and Trends can be found in the Travel Industry
Association of America Travel Industry
Association,
website.
For Travel Industry worldwide
information see European Travel
Commission
