Online travel market: tighten your seat belt

Wednesday, 03 Apr, 2007 0

The fast-growing online travel market has been a huge success but there’s trouble in its future path, says eMarketer.

They estimate that in the US, online consumer travel sales were $79 billion last year and will grow at a 17% annual rate to reach $146 billion in 2010.

Growth is slowing, however.

And while 17% is respectable growth, it falls short of the 28% annual growth rate posted from 2002 to 2006.

eMarketer is not alone in its opinion, however.

PhoCusWright, Forrester Research and comScore NetWorks all agree that online travel sales growth is declining.

And that’s not the only problem.

“The travel industry is undergoing a revolution that is redefining the rules of engagement between travel firms and consumers,” says Jeffrey Grau, Senior Analyst and the author of the new US Online Travel: The Threat of Commodization report. He adds:

“In addition, a tighter market will exacerbate the fierce competition between online travel agencies and travel suppliers in an already commoditized market.”

Lower industry entry barriers are paving the way for new online travel business models, said Mr Grau. He added:

“In this dynamic environment, current industry players must stay alert or risk being blindsided by new competitors that fall under their radar screens.”

The online travel market is a hotbed for experimentation, with new travel sites popping up weekly.

“Internet-savvy consumers are exploiting powerful online resources to find information about travel products and pricing,” says Mr Grau.

Report by David Wilkening

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David

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