According to the latest IDC eBusiness Trends report, as the U.S. population grows older, so online travel purchases will also grow rapidly.
The number of people aged 35-54 will almost double to 61.5 million in 2004 from 31 million in 1999 and those of the `baby boom` generation, 55 years and older will comprise the fastest-growing age group.
These are the very people who now have the time and money to travel and who also look upon the Internet as THE source of travel information, fare bargains and research.
IDC expects the U.S. population of online home Internet users will nearly double from 100 million people at the end of 2000 to 194 million by 2005. And the percentage of online home Internet users who purchase products online is expected to grow from about 50% in 2000 to nearly 61% in 2005.
In addition, the total amount spent online should increase from $1,100 per person in 2000 to $2,100 in 2005. It`s not just individual travel bookings that will benefit either, as the corporate market will be further lured to online purchases by the prospect of saving travel expenses. IDC predicts that by 2005, the number of airline tickets purchased online will reach 31% of all airline ticket sales, up from 10% in 2000. In dollar terms, online sales will reach $32.7 billion in 2005, up from $8.7 billion in 2000. In 2000, online sales of airline tickets represented 6% of all U.S. ecommerce revenue and 19.6% of U.S. B2C revenue.
As additional modes of travel go online, they may well prompt incremental airline ticket sales. For example, if one is booking a cruise or travel package online, one might as well also do the airline portion online. The airlines garnering the most revenue from online ticket sales are Southwest Airlines and Delta Air Lines, which each accounted for 19% of U.S. online ticket sales.
However, they take very different approaches. Southwest sold almost all of its tickets directly, whereas Delta`s direct sales were less than half of its sales. Delta has partnerships with priceline.com and other agencies, and it also offers Internet-only pricing as an additional attraction. An advantage that many are finding with booking through an airlines own site is that they can keep an eye on their seat assignments, changing to a better seat as one becomes available. With e-ticketing too, there are no boarding passes to re-issue. Schedule changes are sent directly to the customer via e-mail and even through mobile devices while on the move. But research is showing that while more and more people want the ease of Internet booking, they also crave the reassurance of a `live` person should they encounter any problems.
Complementary call centres are being established for a customer to either chat live or have a quick e-mail response to a question about their booking. Many travellers will still make their payment directly to a travel agent after having booked via the Internet. In fact, last year it appears that although airlines directly accounted for more than half of the total revenue of online air ticket sales, travel agencies accounted for 40.5%. However, it should be noted that airlines are under- reporting Internet sales attributable to travel agencies because of complexities of ticket reporting, according to U.S.