A new study by Forrester Research reported that vacationers are heading to the Web to book travel plans more than ever, and the industry is expected to reach $29.5 billion in revenue by 2003.
The report noted that online leisure travel accounts for 27%, or 1.3 million people, of all households making e-commerce purchases last year, and the industry is steadily growing. Another 10 million said they are willing to use the Internet to book travel plans.
Forrester cited two main reasons for the industry growth. With better
encryption and security technology, online consumers are more comfortable
than they have been with making travel plans via the Web, and travel
suppliers are pushing their direct booking options to potential customers.
According to Forrester, this year 76% of the top 75 airlines, hotels, and
car rental agencies will offer online booking, an increase over the 37%
offering the service in 1997.
“The rise in direct booking will effectively drag the rest of the
travel industry onto the Internet,” said James L. McQuivey, analyst in
Forrester’s On-line Retail Strategies service and author of the report,
“Leisure Travel’s Booking Boom.”
“Because consumers trust large suppliers, the major players will enjoy a
surge in direct bookings. But eventually, choice will win out over
convenience, and consumers will migrate back to online travel agencies that
offer price-comparison features, rich destination content, and syndicated
selling relationships.”
The report also noted that airlines and hotels will enjoy the most success
online, each earning more than $10 billion in online revenue by 2003.