Travel News

Online Travel Market Largely Avoids Economic Slowdown
Don't tell online travel consumers that the economy is slowing. Consumers are going online to find the best travel prices, and according to Jupiter Media Metrix, online travel purchases in the U.S. will more than triple in the next five years. April 23, 2001

Online Travel Spending Surpasses $1 Billion in January
Online travel continues to be among the most efficient vertical industries on the Internet. According to Nielsen//NetRatings and Harris Interactive, travel accounted for one-third of the online purchases in January 2001. March 20, 2001

Niche Travel Sites Keeping Customers Satisfied
Travel sites are among the top sites on the Internet when it comes to customer satisfaction, according to cPulse. And among travel sites, niche sites that provide content focused on specific topics take the cake. December 5, 2000

Online Travel Market Largely Avoids Economic Slowdown

Total online purchases of U.S. leisure and business will more than triple in the next five years, from $18 billion in 2000 to $63 billion in 2006, according to Jupiter Media Metrix.

"Amidst a softening economy, both consumers and businesses are increasingly in search of value for their precious travel dollars," said Heidi Kim, Jupiter analyst. "The Internet will continue to grow as an important channel for information, products and services precisely because of its ability to help travelers find the best possible fares and rates. To increase their share of the growing online travel market, travel providers must vigilantly focus on increasing loyalty and wallet-share from each of their hard-won customers, in addition to converting customers who research online but purchase offline."

Jupiter analysts, said that travel providers must target different messages to customers who purchase travel options online versus customers who research online but purchase offline. Online purchasers seek good prices, ease of use and effective service, but those researching travel purchases also need reassurance from providers about data-privacy, transaction-security and hidden fees.

A Jupiter Consumer Survey conducted in February 2001 found that 29 percent of U.S. online consumers research and purchase travel on the Internet; 29 percent research leisure travel online but ultimately purchase offline; and 42 percent are not yet using the Internet for travel shopping.

Those consumers shopping for travel online report they almost always check more than one site before purchasing: 10 percent of airline-ticket purchasers online check one site, while 60 percent visit two or three and 25 percent visit four or more sites; 10 percent of hotel bookers visit one site, while 43 percent visit two or three and 22 percent visit four or more; and 13 percent of car-rental bookers visit one site, while 36 percent visit two or three and 13 percent visit four or more.

To find the best value for their leisure and unmanaged business-travel dollar, consumers will use the Internet extensively to find the best travel deals available. U.S. online consumers booked $14 billion of leisure and unmanaged travel online in 2000, a figure that Jupiter expects to grow to $32 billion in 2006.

Because corporations are curbing business travel and IT budgets, the growth of online managed business-travel bookings should temporarily slow in the coming years. But over the next few years, as companies reinstate IT budgets and investments in cost-saving online booking solutions, total online managed business-travel bookings will mushroom from $4 billion in 2000 to $31 billion in 2006.

According to Media Metrix data from the fourth quarter of 2000, sites that had the highest composition of Web users at home who reported purchasing travel online in the previous six months were: CheapTickets.com, with 48 percent, followed by Boston.com with 46.5 percent and Southwest.com with 43.1 percent.

Southwest Airlines captured the top ranking in online travel customer satisfaction among major travel sites by scoring an 8.62 out of 10, according to Nielsen//NetRatings and Harris Interactive. Expedia followed Southwest, scoring an 8.09. Continental Airlines generated a 7.97 rating and had 1.7 million visitors.

"Online travel agencies and airline sites alike are competing for traveler dollars by offering an ever increasing range of options, including complete travel planning, vacation packages, last minutes flight promotions, and frequent flyer programs," said Sean Kaldor, vice president of eCommerce, NetRatings.

An eCommercePulse study based on an online survey of more than 39,000 Web users by NetRatings and Harris Interactive found that spending for the online travel sector totaled more than $1.03 billion in March 2001, jumping 59 percent from April 2000. Offline spending generated by online travel shopping produced an additional $506 million dollars in revenue.

"Travel is continually the largest online shopping category. To maintain this high level of online spending and aggressive growth, the industry continues to entice shoppers with new innovations such as Hotwire and the impending launch of Orbitz," Kaldor said.

back to top

Online Travel Spending Surpasses $1 Billion in January

The online travel industry hit $1.2 billion in sales in January 2001, accounting for nearly one-third of of $3.8 billion in e-commerce transactions, according to research by Nielsen//NetRatings and Harris Interactive. This marks a dollar increase of 29 percent from six months ago when consumers spent $943 million on online travel in August 2000, setting the highest level since monthly surveys began last April.

From January 2000 to January 2001, Nielsen//NetRatings found that online shopping trips to the top five travel sites from work and home jumped 42 percent to 22 million visits.

"Online travel spending grew 17 percent to more than $1.2 billion in January, while all other forms of consumer e-commerce declined from their hectic holiday levels in December," said Sean Kaldor, vice president of e-commerce at NetRatings.

The Nielsen//NetRatings and Harris Interactive eCommercePulse, which collects data an online survey of 50,000 Web users, found that Travelocity held the largest share of online travel buyers (18 percent). Southwest Airlines followed with 14 percent of all online travel purchasers. Expedia's share was 11 percent. Priceline (9 percent) and Delta (8 percent) rounded out the top five rankings.

In addition to their online success, Internet travel sites stimulated another $681 million in offline revenue in January. These sales were generated by online operations, but purchased through the phone, fax or in-person.

"Online travel is one of the more efficient vertical industries online, routinely completing 64 percent of transactions on the Web while many other product categories see only 30 to 40 percent of revenues actually transacted through the cost-efficient online interface," said Kaldor. "Online travel sites should not be evaluated purely by their Web dollar sales figure alone. Many people use the Internet to price comparison shop, and prefer purchasing their tickets by speaking directly with a travel agent."

back to top

Niche Travel Sites Keeping Customers Satisfied


Travel sites are among the top-rated Web sites in terms of percentage of visitors who are "extremely satisfied" and "very likely" to return, according to a study by cPulse.

The travel category slightly beat the entertainment category of Web sites with regard to high repeat usage. According to the cPulse study, 42 percent of visitors to Web travel sites are very likely to return and another 25 percent are extremely satisfied. At entertainment sites, 36 percent are likely to return, and 19 percent are extremely satisfied.

Within the travel category of sites, cPulse has found evidence that travelers are tried of impersonal meagsites that provide shallow content on a wide array of topics, and are now flocking to niche travel sites in increasing numbers. The number of new users to niche travel sites increased 82 percent in Q3 2000 compared to Q3 1999. Only 19 percent of these new visitors said they would not continue using these sites. According to cPulse, the popularity of the sites is a result of the fact that they do not rely on booking as their primary value delivered to users.

Niche travel content sites excel at meeting what cPulse found to be the top needs of their consumers: 1) accurate travel information, and 2) useful content. Their useful content offerings should come as no surprise because smaller, more focused sites don't have to serve a wide spectrum of consumer needs so they can naturally provide content more useful to their users than a site serving a mass audience.

The cPulse study also found that consumers perceive the information they get from travel sites to be accurate.

"No hard evidence exists to suggest that the actual information on niche-focused travel content sites is more accurate than that of large travel corporations," said cPulse analyst Joan Lambe. "One explanation for this phenomenon is the affinity that exists between users and the sites. By providing advice, personal recommendations, and anecdotes about hidden spots and areas to avoid, small travel content sites have done an outstanding job at creating unwavering trust from their users."

The trick for niche travel sites will be turning customers happy with the content into business success.

"The impact that this bond of trust has on consumers and how they interpret their visit experience is a lesson for the large commerce-focused travel players. Applying a personal touch to interactions with consumers can dramatically improve the entire perception of your product and service," said cPulse executive VP Jody Dodson. "When you attach travel advice and comprehensive destination information with the actual ticketing and booking process, you've got a model that could turn the online travel industry on its ear."

cPulse's research predicts that partnering and acquisition with large booking and reservation sites lies in the future for nice travel sites as large sites look to improve their competitive position and ultimately their bottom line.

The cPulse data resulted from a survey of 6,580 interviews with travel content site visitors between April 1, 2000 and September 30, 2000. cPulse uses pop-up interviews so visitors are interviewed while they are on the actual site.

Research by Gartner Group has found that loyalty among online travel consumers is eroding, thanks to price wars. Visitors to airline sites are more than four times as likely to be loyal than visitors to other travel sites. Nearly half (47 percent) of the 16 million people who buy travel online, buy only from airline sites. Only 18 percent have developed a loyalty toward Web-based travel agencies.

back to top