Online travel growth: stalling?

Falling numbers of travelers who use the internet to both research and buy are declining in what is being called a “wake-up” call by Henry Harteveldt, vice president and principal analyst at Forrester Research.

“What we’re seeing is an early warning signal: fix the problem or else,” he said. He added: “To keep online consumers interested in online booking, travel companies need to overhaul their systems to sell the way people want to buy.”

This marks the first time since 9-11 that the fast-growing online travel market has seen a decline.

Forrester’s most recent study this month found that the number of US leisure travel bookers fell 9% from 2005 to 2007.

But what is even more telling to Mr Hardeveldt is the fact that there’s been a noticeable decline in the number of people who do both research and bookings online.

“What’s particularly alarming to me is the growth in this group we call the sideliners. That’s the biggest cause of concern,” he said.

That number has declined from 30% to 20%, he added.

There is no one reason for the slowdown but several factors are involved.

“It’s the combination of things that include the difficulty people have buying travel online…how confusing it can be…how much time it takes…the lack of control people may have and navigating the web sites,” Mr Hardeveldt said.

Travel companies will have to find ways to make the booking experience easier and more consumer-friendly. “And that’s no easy feat and not going to be fixed tomorrow,” Mr. Hardeveldt said. He said it would also cost a lot of money to improve systems.

He uses the example of airlines’ booking sites.

“Very few airlines provide context to customers about trade-offs, and about terms and conditions associated with rates or prices. Some airlines like Southwest and American and Air Canada are taking steps in this direction,” he said.

Online travel bookings will continue to grow, though not at its past torrid rate, according to Mr Hardeveldt.

“I’m not worried about online not growing. In fact, bookers are traveling more and spending more, so even though the numbers are stalled at 59% buying on line, budgets are bigger, so there’s continued growth,” he said.

He compares online booking to aging athletes.

“The Web is now maturing. It’s like taking a look at an athlete when he’s 25 and when he’s 35. When he’s 35, he has wisdom and experience but maybe he doesn’t move as quickly as when he’s 25,” he said.

Report by David Wilkening