Consumer
Trends: Evolution of the Online Traveler

By
Stacy J. Moran

In
1998, six million consumers bought travel online in the U.S. Most people
researched vacation plans via advice from friends and relatives and
then made purchases through traditional travel agencies.

Jump ahead
to 2002 when 30 million Americans purchased travel online in the last
year. Half of them only buy their travel online. The
Internet is now the leading source for travel research, and online travelers
usually purchase their travel on the Web. In fact, eight in 10 online
travel buyers usually purchased their travel online
last year.

So how
did this evolution come about? A recent report from PhoCusWright Inc.,
The PhoCusWright Consumer Travel Trends Survey Fifth Edition,
examines online travel shopping and purchase behavior as well as the
factors that have turned many online lookers into online buyers over
the past five years.

Nine out
of 10 online travelers now have some history of shopping for travel
online, and nearly 15% of all Americans purchased travel online last
year – that's five times the penetration rate of 1998.

Given the
increased volume of online travel purchases, all the market players
(online travel agencies, traditional agencies and suppliers) are battling
to maintain or gain market share. Each of these channels has characteristics
that entice usage and breed loyalty. Consumers laud online agencies
for their low prices, broad selection and ease of use, while others
prefer traditional agencies for their customer service and reliability.

Both online
travel agencies and airline Web sites have won the confidence of online
travelers for finding low airfares. Meanwhile, just to be sure, most
online travelers (86%) shop multiple sites before buying. This provides
a significant opportunity for online providers to build market share
by reaching Web site "switchers." For example, 39% of online
travelers said a broader selection of hotel properties would inspire
them to switch from one site to another.

Some additional
survey findings include:

• Travelocity
  is the Web site "most often used" for air purchases, but
  Expedia is "most often used" for hotel reservations.


• Six
  in 10 online travel buyers have purchased a hotel room or rented a
  car online.


• Nearly
  one-third of online travel buyers say the Internet was responsible
  for their travel purchases last year.

Even when
buying doesn’t take place online, the influence of the Internet
on travel plans is irrefutable. For example, among online travelers
who took a cruise in the past five years, 43% used the Internet to research
their last cruise in 2002 (versus 32% in 2001).

As online
travel sites are jockeying for position, they are still competing mostly
with offline processes, such as the telephone. But, considering the
influence that the Internet has on travel research, whether the resulting
sales occur online or offline makes little difference.

The
PhoCusWright 2002 Consumer Travel Trends Survey provides valuable
insight into which market segments and players are likely to land on
top while others scramble for what’s left and some perhaps disappear
from the online travel landscape.

The
PhoCusWright Consumer Travel Trends Survey Fifth Edition. Find
out what's driving online travel purchasing - for a fraction of the
cost it would take to do your own consumer research, and much more..

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