Despite the dot-com crash, online travel stands apart from the dismal outlook facing many electronic commerce categories because there is no shortage of consumer demand for online travel.
Quite the contrary: As the economy slows, corporations and consumers tighten their belts and look to the Internet to help save precious dollars. The slowing economy will primarily affect business travel as corporations reduce unnecessary trips and demand that employees adhere to policy and book through an online booking solution, if available.
For leisure travel, people will be more likely to embrace the do-it-yourself tools on the Internet to comparison shop for the best travel deal and will be more likely to select more affordable travel brands and trip features.
The real challenge is for online travel businesses to build long-term sustainable revenue models that reap true profits. Online travel providers must also encourage the sale of complex travel products such as cruises, vacation packages and tours that yield a higher profit margin. 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.