Online travel sales grow but number of customers drops

October 30, 2007

So online travel is motoring along as ever. Sales are rising and the number of participant websites is growing all the time. However, in the U.S. the word (courtesy the NY Times) is that 9 percent fewer people booked travel online this year than in 2005. This has come from a Forrester research survey of 60,000 U.S. web users. It is the first time since Forrester began tracking Internet spending a decade ago that a category (in this case online travel) has lost shoppers.

Another survey (results coming soon) from PhoCusWright shows that the percentage of travel shoppers booking online has dipped while the percentage booking offline has risen.

Is this something to be concerned about? Maybe. There’s a few reasons this could be happening. Perhaps customers are looking to book more and more complex trips, and therefore aren’t booking online as they feel the confidence instilled by a travel agent is necessary before parting with money for an adventurous trip. Or perhaps users are beginning to backlash against the standard online travel functionalities that haven’t changed much in the last ten years.

Henry Harteveldt, Forrester’s online travel analyst says “Customers are tired of spending two or three hours trying to find the airline or hotel or vacation package that meets their needs.” He says (like I do) that sites need to step away from asking for specifics in order to complete a search. He says “Nowhere can you say, ‘I have this amount of money to spend on a trip. These are my interests. This is where I live. Show me my options,’” he said. “Whereas online retailers have done a much better job of improving the shopping experience in recent years, the travel industry has been standing still.”

The NY Times article goes on to discuss the lack of innovation that is due to outdated reservation systems and mentions the Travelocity Road Trip Wizard I discussed earlier. Yes, lack of functionality in reservation systems is a major issue, also the technological complexity of querying multiple bed banks and GDS’ makes user intuitive searching almost impossible to create.

So, who is going to be in a position to benefit from this trend of user/customer decline? It could be the tour operators. Many of them are in the process of upgrading their systems to new dynamic package capable ones which will interface much better with intelligent search functionality. Also, they don’t need to query the bed banks as often as they have contracted bed stock so can cache availability and present it in a much more usability focussed manner than the likes of Expedia with their multi-connections to other suppliers. Of course the only problem is the lack of innovation generally at tour operators and also the desire they seem to have to become the next Expedia. That’s not the way forwards anymore. Rather than trying to emulate the online travel agents, tour operators should be trying to become the next big thing.

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One Response to “Online travel sales grow but number of customers drops”

  1. Anonymous Says:

    I can understand why customer prefer to avoid online travel sites. Expedia provides a good example of poor customer support: http://www.expedianews.com

    Other big travel sites are not doing better.


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