Analysts See Strong Growth for e-Travel

21st May 2003

On-line sales of airline tickets in the US will grow 14 percent during 2003, in spite of the Iraq war and the SARS threat, according to Jupiter Research

The New York research firm predicts that the total value of on-line ticket sales in the US will reach USD19 billion this year, compared to the 2002 total of USD16.8 billion. The growth is all the more notable because fewer people are flying overall. The absolute number of airline passengers is expected to fall 5 percent in 2003, but since a greater proportion of these travellers will be lured on-line by incentives like reduced prices, the value of on-line sales is expected to show strong growth.

In all, 2.5 million more people in the US are expected to go on-line this year when booking flights. The proportion of leisure and so-called “unmanaged” business travellers buying on-line is expected to increase from 28 percent of tickets to 34 percent of tickets.

Jared Blank, senior analyst with Jupiter Research, noted that airlines—particularly low-cost carriers—are reaping the benefits of pushing travellers towards the on-line channel. But he said that other carriers will continue to feel pressure this year due to competition from low-cost operators, a smaller number of business travellers and depressed fares. “The Web is a bright spot for airlines, but it will not be bright enough to improve their shaky financial situations,” Blank said in a statement.

The Jupiter numbers are published in the company`s report, “2003 Online Airline Ticket Sales: Measuring the Impact of War and SARS,” which also notes that because the vast majority of on-line airline ticket sales in the US are for domestic flights, SARS has had a lesser impact on Internet sales than on the industry as a whole.


In other travel industry news, the European Commission on Monday granted regulatory approval for WorldRes Europe, a proposed joint venture between French hotel chain Accor, the British hotel chains Hilton and Six Continents and the American e-commerce company WorldRes.Com


The agreement will give the companies joint control over WorldRes Europe, a system to let the hotels share and manage information for on-line bookings. The information will be available to the hotels as well as to travel Web sites, call centres and travel agencies, as well as to end-users who can make direct hotel bookings through the system.

Accor controls nearly 4,000 hotels in 90 countries under various brands, including Sofitel, Novotel, Mercure, Ibis, Formule 1 and Etap. The Hilton group has around 415 hotels, some of which are marketed under the Hilton, Scandic and Conrad brands, and Six Continents has 3,325 hotels brands including InterContinental, Crowne Plaza and Holiday Inn.




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