Online Travel Sites Best Placed to Succeed

27th Apr 2003

Although the war with Iraq and the battle with SARS has caused major disruptions to the travel industry, the online travel market continues to expand and a growing trend in consumer confidence in the internet lends good reason to believe that online travel services are well equipped to overcome detrimental economic circumstances.

Analysts have suggested that Internet travel agencies like Expedia, Travelocity and Orbitz were more likely to survive any slump caused by the Iraqi war than traditional travel businesses, just as they weathered the Sept. 11, 2001, attacks more easily.

Online sites benefited from a recent spate of bargain holidays that most travellers can dream of but ill afford. Since the onset of war, suppliers have dropped their rates to all time lows in an effort to boost vacancy levels.

John Fair, Head of Holidays from told Internet Travel News: “We have seen a significant rise in bookings since the war begun”. Adding, “Customers are clearly looking for excellent deals and there are some superb offers on lastminute at present”.

Al Comeaux, Vice President, Public Relations for Travelocity
predicts that these prices may be here to stay for a while, commenting: “It is hard to imagine prices going lower than they are now but it will continue to be difficult to for travel companies like hotels and airlines to rise their prices any time soon.”


Growing numbers of people are gaining computer access and access to the internet. This is increasingly becoming a popular medium for research as well as purchasing. The Pew Internet & American Life Project reports that 56% of US Internet users say they have gone online for some purpose related to the war in Iraq—either for news, more information or guidance on getting more involved.
The beauty of online channel is that it ensures a fast-moving and reactive environment. Online travel sites can adjust quickly to external factors such as to slumping demand and changing market conditions. In response to heightened consumer concern, many leading online travel agencies have recently shifted their strategies.

“Travelocity addresses consumer concern by making sure customers are informed of travel news and travel changes” Commented Al Comeaux: “Travelocity has launched on its website a travel information centre, where consumers can find the latest information on all company travel policies and changes”.
informed Internet Travel News that all points of customer contact (on and offline) have up to date Foreign Office and travel information.
Meanwhile Expedia
announced a new travel policy that waived cancellation penalties to provide customers with flexibility in their travel planning. Customers who need to cancel or change a hotel stay, car rental, or destination attraction or service booked prior to the declaration of war are guaranteed full refunds.

Many sites including the likes of Travelocity have also been launching insurance and protection plans to reassure travelers.
Ever since September 11th attacks, the trend for booking holidays at the last minute has become more prominent. According to a recent Travel Industry Associations’ Survey, 87% of those booking travel are doing now it within a 7 day window.

Alan Greenberg, chairman and CEO of The Last Minute Travel Network
commented:  “Because of the turbulent geo- political situation, the market for travel at the last minute has grown dramatically in the past few months.”
This is certainly a trend which Travelocity will be able to capitalise on, thanks to its acquisition of last minute booking site, Site59, last year.

A Site59
spokesman commented: “Our business model, solely based on last minute travel, continues to thrive in a marketplace that is hesitant to commit in advance”.
Site59 revealed that for the month of March, 10% of customers booked the same day verses 5% booking the same day in the month of February supporting the ‘wait and see’ trend.

So what does the future hold for online travel? According to The PhoCusWright
Consumer Travel Trends Survey Fifth Edition, “Economic pressures and security concerns are impacting not only the frequency of travel but also the type of travel planning time and amount spent on travel in the next year”.

The report attributes this trend to two phenomena: “Planning closer to the date of the trip provides travellers with greater assurance of their safety while they are on vacation. And, a shorter planning cycle limits online travellers’ risk should the trip not be taken due to unsafe travelling conditions”.
Although the travel industry has been badly affected by the war, latest research indicates that traffic to online sites has increased since the outbreak of the conflict. Travel plans are becoming less predictable but online sites are clearly well equipped to deal with such changing consumer behaviour patterns. This coupled with the vast migration from traditional high street shopping to the internet, strongly indicates a continued growth in the online travel arena.




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