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Is the Internet Driving Offline Travel Sales?

Despite complaints from travel agency organizations that online sales operations can put them at a disadvantage, the Internet is actually beginning to drive "significant business activity" for traditional, off-line travel agencies, contends a new report.

Data analysis from Respond Networks shows that consumers increasingly are doing their travel research for larger transactions online, then completing them with a traditional travel agency.

Often consumers are seeking packages that are more complex than typical here-to-there-and-back online travel purchases.

Respond said the number of travel-related requests across its network of buyers, sellers and partners has increased by more than 475 percent during the first five months of 2002.

Palo Alto, Calif.-based Respond Networks -- which began life in 1998 as Emailshopper, an online service created to provide a platform for collectors and collectibles dealers -- now calls itself a "request-driven lead generation solution provider that matches businesses with purchase-ready buyers."

What that means: they connect interested consumers with local businesses, including local travel agencies, via the Internet.

The average budget for vacation package travel requests across the Respond Network is approximately $2,300 per trip (and more than $1,000 per person), which is significantly higher than the average travel purchase of $481 made by the typical leisure traveler, the company said.

"Online travel isn't just limited to ticket sales and price-based comparisons -- there's a growing and important online market for highly personalized, custom services," said Lyn Chitow Oakes, president and CEO of Respond Networks, which operates Respond.com, whereby consumers request what they want by filling out a form and are e-mailed offers from businesses.

"It's ... true that travelers like to speak to a human before shelling out $2,500 for a trip," said Lorraine Sileo, an analyst at travel strategy firm PhoCusWright in Connecticut.

"That is why most online services have a "hybrid" online/off-line model for selling vacations and cruises -- people like to research them online, but they want to buy them off-line," she told InternetNews.com." The beauty of it for online travel sites is that once the traveler gets on the phone to buy, they are usually educated and pre-qualified."

Thus the big travel sites have been falling all over each other to arrange package vacations, cruises and the like.

Expedia , for example, has whole sections for family travel, golf travel, romantic getaways (yes, even weddings) and mountain resort packages. They also have a 24x7 customer service phone number that lets you talk to a real person.

Rival Travelocity has phone help for its vacation packages, too. Priceline is also in the vacation business and Orbitz this week was offering "Condos, Vacation Rentals up to 70% off -- Design your dream vacation," also with a toll-free number.

It's unclear whether talking to someone at customer service on an 800 number is the same as calling up or visiting an agency down on Main Street, but it's clear that the traditional travel agency is not going away, at least for a while.

U.S. travel agents' total annual sales are between $120 billion and $130 billion and rising, according to the American Society of Travel Agents. The association says that traditional travel agents still sell 80 percent of all airline tickets, 95 percent of all cruises, 90 percent of all tours and packages, 40 percent of all car rentals and about 25 percent of all hotels.

The association's slogan is "Without A Travel Agent, You're On Your Own." As they say on the Web site, if you've booked through the Internet, who are you going to call when you discover your room with a view has you looking at the dumpster?

"Travel, like other areas of e-commerce, is still evolving online," Oakes said. "Over the past several years, consumers have become very comfortable purchasing tickets and completing basic bookings online. Now we're seeing the next phase where consumers turn to the Web to research more complex travel needs."

"Savvy travel companies who want to tap into this lucrative market can reap tremendous benefits with new offerings, such as customized request for quote services, to meet the consumer demand for concierge level relationships," Oakes said.

Respond said the top five travel requests as a percentage of total requests on the network are:

  1. Vacation Packages 6.4
  2. Hotels & Lodging 5.6
  3. Domestic Airline Tickets 2.3
  4. Cruise Vacations 2.1
  5. International Airline Tickets 0.8

Privately held Respond itself offers what it calls a Lead Generation Network consisting of distribution partners such as Verizon, InfoSpace, Network Solutions, Lycos, iWon, American Express, Edmunds.com, Lawyers.com and AltaVista.