U.S. Online Travel to Outshine All Other Travel Sectors in 2009

U.S. Online Travel to Outshine All Other Travel Sectors in 2009

The U.S. online leisure/unmanaged business travel market is significantly outperforming every other distribution channel in 2009, according to PhoCusWright’s U.S. Online Travel Overview Ninth Edition. Amid a severe economic downturn, U.S. online leisure/unmanaged business bookings will decline 7% while the total U.S. travel market will post a 16% drop.


“For the first time since PhoCusWright began tracking the remarkable trajectory of the Internet in travel distribution, online travel will decline in 2009. But 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,” says Douglas Quinby, senior director, research at PhoCusWright.


The sharp fall-off in traveler demand and spend this year will reduce the size of the overall market to pre-2005 levels. However, the pullback has not been as severe for Internet distribution channels, which have outshined other sectors in 2009. As a result, online travel’s share of the total travel market will surge from 35% in 2008 to 39% in 2009, with online travel agencies (OTAs) proving far more recession-resistant than supplier Web sites.

“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. OTAs are taking back some share from travel supplier Web sites this year,” adds Quinby.

With 2009 coming to a close, all eyes are focused on the turnaround and outlook for 2010 and 2011. PhoCusWright projects very modest growth for the travel industry in 2010, but the outlook varies for travel segments and distribution channels. PhoCusWright’s U.S. Online Travel Overview Ninth Edition provides market sizing and forecasting for key online and offline channels (online travel agencies, supplier Web sites, traditional travel agencies and offline supplier direct) and all major travel segments (airlines, hotels, car rental, vacation packaging, cruise and rail) through 2011.

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