Wednesday, April 25, 2001

More Consumers Will Use the Internet to Purchase Travel

Jupiter Media Metrix, a global leader in market intelligence, today reports that despite the economic slowdown, total US leisure and business online travel purchases will more than triple in the next five years, from $18 billion in 2000 to $63 billion in 2006.

"Amid a softening economy, both consumers and businesses are increasingly in search of value for their precious travel dollars," said Heidi Kim, Jupiter analyst, from Jupiter's @travel forum in Miami. "The Internet will continue to grow as an important channel for information, products and services precisely because of its ability to help travelers find the best possible fares and rates. To increase their share of the growing online travel market, travel providers must vigilantly focus on increasing loyalty and wallet-share from each of their hard-won customers, in addition to converting customers who research online but purchase off-line."

According to Jupiter analysts, travel providers must target different messages to customers who purchase online versus customers who research online but purchase off-line. While online purchasers seek good prices, ease of use and effective service, travel researchers also need reassurance from providers about data-privacy, transaction-security and hidden fees.

Jupiter Media Metrix Travel Highlights:

- According to a February 2001 Jupiter Consumer Survey, the Internet continues to play a significant role in consumers' overall travel-shopping experience: 29 percent of US online consumers research and purchase travel on the Internet; 29 percent research travel online but ultimately purchase off-line; and 42 percent are not yet using the Internet for travel shopping.

- Consumers shopping for travel online report that they almost always check more than one site before purchasing: 10 percent of airline-ticket purchasers online check one site, while 60 percent visit two or three and 25 percent visit four or more sites; 10 percent of hotel bookers visit one site, while 43 percent visit two or three and 22 percent visit four or more; and 13 percent of car-rental bookers visit one site, while 36 percent visit two or three and 13 percent visit four or more.

- To find the best value for their leisure and unmanaged business-travel dollar, consumers will use the Internet extensively to find the best travel deals available. US online consumers booked $14 billion of leisure and unmanaged travel online in 2000, a figure that Jupiter expects to grow to $32 billion in 2006.

- Corporations are curbing business travel and IT budgets, temporarily slowing the growth of online managed business-travel bookings. But over the next few years, as companies reinstate IT budgets and investments in cost-saving online booking solutions, total online managed business-travel bookings will mushroom from $4 billion in 2000 to $31 billion in 2006.

- According to Media Metrix 2000 fourth-quarter ratings data, sites which had the highest composition of Web users at home who reported purchasing travel online in the previous six months were: CheapTickets.com, with 48 percent, followed by Boston.com with 46.5 percent and Southwest.com with 43.1 percent.