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Report: Travel Suppliers Missing Online Market Potential

Travel suppliers are not realizing their full online market share potential, despite projections that U.S. consumers will spend $16.6 billion online in 2003 on leisure and business travel, according to a new report.

Jupiter Communications said in report to its Strategic Planning Services clients that suppliers such as airlines, car rental companies, and hotels have allowed their sites to stagnate and must continue to market aggressively to acquire and improve execution to retain today's travel consumer.

"Online consumers are being courted by more and better travel options, and travel players are letting the opportunity to retain these consumers slip," said Fiona Swerdlow, research analyst for Jupiter's Digital Commerce Strategies.

"In the last two years, suppliers geared up and moved to disintermediate the travel agent market. However, despite falling commissions and increased competition, travel agents have conceded only one percent of the U.S. online travel market."

Jupiter's new travel projections show that air travel will continue to dominate the travel products sold online, representing more than 80 percent of the online travel market. However, as online car and hotel bookings continue to climb, that share will fall to 60 percent of what promises to be a $16.6 billion market in 2003.

Jupiter's research also indicates that 66 percent of online consumers have used the Web to research and or book travel online, which will result in nearly 10 percent of the U.S. travel market will be booking online in 2003.

"Players within the online travel market are not only competing among themselves, they are competing with the off-line travel channel," said Swerdlow. "Even though dollar spending continues to grow, online travel players will not see significant customer growth unless they create online product offerings that simplify the purchasing process and exceed the value of traditional offerings."



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