Travel Industry Profits Weakened by Online Security Fears

28th Jul 2004

As many as one in seven people would rather put trust in high street
travel agents than book a holiday online reveals a survey conducted by
LogicaCMG. Over half (51 per cent) of bargain-hunting Brits could be persuaded to
book their holidays online if there was a bigger online discount, yet
almost 1 in 5 claim the reason they don’t book online is because they are
not convinced that travel companies keep their financial and personal
details secure. Another 1 in 10 people would be further encouraged to book
holidays online if there was a simpler transaction process. One in six
consumers said hearing word of mouth through a friend or family member who
has purchased online successfully would further encourage them to purchase
from that brand-outlining the importance for companies to protect their
brand from security failures.

These figures are backed by ABTA’s (Association of British Travel Agents) research which claims that the growth of the online travel market,
which is expected to reach 17 per cent of the total UK travel market
(GBP28 billion) by 2007, is reliant upon growing Internet penetration,
increased confidence in users together with improved technology, products
and content from online travel firms.

“Over a million UK consumers have already been victims of security
breaches whilst carrying out online transactions. Because of fears about
Internet security, more consumers are using the Internet for researching
than actually booking their travel online,” says Dave Martin, principal
security consultant at LogicaCMG. “This is having a major impact on travel
industry profits: every phone booking can cost a company around GBP30
whereas an online booking can cost a company less than 75 pence. This is
the reason why many travel companies now impose surcharges for
non-Internet bookings.”

Tim Bush, Market Development Manager at BSI Group (British Standards
Institute) comments: “We are seeing almost daily news of viruses, fraud,
misuse of systems, data loss and unauthorised theft of information and
according to the DTI(2), two-thirds of British companies had at least one
of these security breaches in the last year. As only 5.5% of companies in
the UK are compliant with the internationally recognised information
security standard - BS7799 - LogicaCMG’s findings don’t really surprise

“The whole point of having standards is to assist more and more
organisations to raise levels of management, operations, client care and
products and we hope that these findings will reinforce the importance of
security compliance.”




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