Online travel: slower speed ahead

Signs are everywhere that the once-hot online travel business is beginning to slow down.

Bookings from Expedia’s North American Web sites rose by only 1 percent in the first quarter of this year, for example.

There were reports as early as last year that the online travel industry could be heading towards a serious slow-down in part due to consumers’ desire to hunt for the cheapest priced holiday, according to research by PricewaterhouseCoopers LLP.

One report noted that online travel agency efforts to grow the industry may be out of date.

“Online travel agents are not yet providing sufficient differentiation in their offering, so it is not surprising that consumers are simply looking at the cheapest price – because to them everything looks the same,” said David Trunkfield, a PricewaterhouseCoopers director.

“Providing different, unusual products, bundling various offerings together, delivering exclusive content to consumers on a number of online platforms will all contribute to a strong business model for the future,” he said.

The anticipated slowdown has prompted some sites to look for creative new offerings.

Yahoo, for example, continues to revamp its travel site to offer new mapping features and a chat-based collaboration tool. There’s also a personalized trip recommendations and travel deals.

“What Netflix has done for movies and what Amazon has done for book recommendations we’re doing for travel recommendations,” said Jasper Malcolmson, director of Yahoo Travel.

Yahoo travel combines Yahoo FareChase, which finds low-priced air fares, with Yahoo Trip Planner, a social network for travelers and would-be travelers to plan trips and create interactive maps.

The site will allow people to insert tags, like “romantic” or “family-oriented,” so others can find trips with similar themes.

In addition, Yahoo is offering Yahoo Messenger Flight Planner, an instant messenger plug-in that people can use to plan trips together in real time. The site also features new mapping technology that allows other, more detailed maps to be layered over a Yahoo map, reported CNET News.

Research from Harris Interactive conducted on behalf of Yahoo found that of more than 2,300 adults, 43% had not decided where they want to spend their summer vacation and about 70% had not locked down their summer travel plans yet.

“Our intention is to become the site for people who haven’t made up their minds about where they want to go,” Mr Malcolmson said.

Report by David Wilkening

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