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Online travel agencies still making money in today's travel market
"For the first time since PhoCusWright began tracking the remarkable trajectory of the internet in travel distribution, online travel will decline in 2009," says Doublas Quinby, senior director, research at PhoCusWright. "But," he continues, "the 7% drop in online travel vs. far steeper double-digit declines for the total travel market and offline channels indicates that travelers are increasingly turning to the Web to shop and purchase travel amid the recession."
The contraction of the travel market in 2009 has brought the travel industry back to pre-2005 levels. The effects haven't been as brutal in the online space, though, which has outperformed all the other channel's this year. When the year is over, PhoCusWright expects online travel agencies to own 39% of the total travel market in the Untied States, up from 35% last year.
[Photo by borman818 via Flickr]
"By honing in squarely on consumer concerns in 2009, heavily promoting deals and last-minute special offers and eliminating many booking and customer service fees, online travel agencies have deftly outflanked recessionary pressures and are outperforming every other distribution channel," Quinby reports. He adds, "OTAs are taking back some share from travel supplier Web sites this year."
Filed under: Business, North America, United States, Airlines
Reader Comments (Page 1 of 1)
Izzat Khiruddin Dec 7th 2009 10:42PM
Your thoughts are quite interesting, John. I wonder if the same can be said in Asia Pacific. Many people in Asia are still quite comfortable with their personal relationships with traditional Travel Agents. I think is due to 3 reasons. 1) People in Asia are still wary of Credit Card fraud. On the other hand, with the inception of Air Asia strategy of offering low fares only through online channels leave customers no choice which has indirectly helped the online space. 2) Some people in Asia still prefer a personal touch provided by their traditional Travel Agent and 3) Internet or broadband stability is still questionable in some countries in Asia.
What is interesting to find out is what people are actually lookng for in an Online Travel Agency? What is obvious is that price plays a major role in customers choice for purchase. There are not many Online Travel Agencies offer other products other than Air, Hotel, Car Rental and Insurance. Therefore, this limits potential customers to only purchase these products. Maybe there are other issues why some are still sceptical about the online travel space....... An interesting deliberation.