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Advice to agents: Think globally
With the internet continuing to gobble up travel business, agents and other providers should think globally, suggests a researcher for PhoCusWright. Lorraine Sileo told TravelMole:
“Everyone in the travel business should be thinking global. There’s a vast, untapped market in both Asia and Europe.”
PhoCusWright’s recent study found that the travel industry as a whole is recovering, with growth rates of up to 3%. But online travel has seen increase of 30$.
“This dynamic, driven by share shift, is expected to continue at declining but still substantial rates through 2006,” the study said.
Ms Sileo said agents counting on the cruise business to keep them afloat might want to reconsider.
“The cruise business has been relying too much on third parties. We definitely see them wanting to make a change her and getting more aggressive in their marketing.”
She said PhoCusWright is projecting that one-third of all US travel will be booked online by leisure and unmanaged business travel sites by 2006, up from 15% in 2002 and 20% in 2003.
“That happening is a no-brainer. About 84% of the population has access to computers,” she said.
In 2003, an even split marked the balance between online travel agency bookings and those completed on the supplier sites of airlines, hotels, car rental companies, traditional vacation packagers and cruise lines.
That balance was achieved following faster growth in supplier bookings in 203, and is expected to remain constant as growth rates for both channels settle to comparable levels through 2006, according to Ms Sileo.
Other key findings:
• The US leisure/unmanaged business online travel sales reached $39.4 billion in 2003, up 37% from the previous year.
• The market is expected to increase 34% in 2004.
• Airline tickets as a percentage of total online sales will decline from 51% in 2003 to 45% in 2006.
• Expedia, Travelocity and Orbitz represent nearly one-third of all internet-driven hotel sales.
• The consolidation trend continues, with five companies now controlling half of the entire US online travel industry.
Report by David Wilkening
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