World Telecommunication Day 1999 |
Armchair travelers today have it better than ever, thanks to telecommunications.
Through the Internet, call centers and computerized affinity programs, they can view, request and receive information about the world without ever leaving their homes.
For more adventurous souls who actually want to take a trip, the Internet is becoming an attractive alternative to the travel agency as a way of booking travel. ''About 2 percent to 3 percent of world travel is on-line today,'' estimates Jean Claude Guez, an Andersen Consulting partner with responsibility for the passenger travel industry in Europe. This percentage is growing rapidly, especially in the United States.
Forrester Research has found that nearly three-fourths of on-line households in the United States have used the World Wide Web to plan a trip, making travel the most researched product on-line. Nevertheless, they found a big difference between the $24 billion in U.S. travel revenue affected by the Web and the $3 billion actually booked on-line last year. The gap between ''lookers'' (who use the Internet to research a trip) and ''bookers'' (who actually make on-line purchases) will narrow, they say, as travel Web sites become more user-friendly
A more telling gap - between leisure and business travelers - will remain, on-line as well as off. The leisure market represents 80 percent of travelers and 60 percent of revenue, while business is 20 percent in numbers but double that in revenue. In the United States alone, businesses will spend more than $100 billion this year for 122 million trips taken by 33 million workers, says the U.S. Travel Data Center.
By 2003, 32 percent (equaling $38 billion) of all U.S. business travel will migrate on-line, predicts Seema Williams, an analyst for Forrester Research. The advantages for businesses, she says, include corporate automated booking systems that put ceilings on spending, negotiated fares and rates, better adherence to corporate guidelines than with travel agents and better tracking.
Nevertheless, unmanaged business travel, i.e., by self-employed professionals and other independent agents, makes up a smaller portion of on-line purchases today than it did in 1997. Why this shift? A 1999 Jupiter Communications Report on the travel industry explains that the on-line user population is moving mainstream and is less dominated demographically by upscale business travelers than it was a few years ago.
On the leisure side, by 2003, 10 percent (equaling $16.6 billion) of all U.S. leisure travel will be booked on-line, says Fiona Swerdlow, director of digital commerce for Jupiter. By the same date, $6.8 billion worth of air tickets will be sold on-line in Europe.
The rest of the world is still playing catch-up, though some Asian countries are becoming very sophisticated in their uses of new media, especially mobile phones, for travel.
Air ticket sales will represent the majority of on-line travel transactions, but, according to the Jupiter report, ''hotel and car rental bookings are also poised to make up a noticeable share of total bookings.'' Cruise and package tours lag behind, partly because of their complexity and higher price tags.
On-line vendors fall into three categories: on-line travel agencies (both on-line-only and on-line channels of bricks-and-mortar agencies), direct supplier sites and portals. The ''big three'' on-line-only are Travelocity (ranked the number two travel site overall in a 1999 Forrester survey), Expedia (number three) and Preview Travel (number 11). No on-line channel of a brick-and-mortar agency made Forrester's ranking, because, says Ms. Williams: ''[Traditional travel] agents are still clueless.''
Direct supplier sites attract the best audiences, but many are restricted to their own category; one cannot book a Delta flight at hilton.com, though linkages to complementary sites might overcome this drawback.
Five of the top 10 sites in Forrester's survey were portals, including the number-one Yahoo! The portals deliver ''superior reach,'' says the research group, but scant revenue, because most of their visitors are lookers rather than bookers.
On-line leisure travel outside the United States has been hampered by cultural considerations as well as Web site deficiencies. Claude Guay, global executive, marketing and business development, IBM travel & transportation, points out: ''Travel in the U.S. is a commodity, so people think nothing of it. They buy it piecemeal. In Europe, with different languages and currency barriers [before the euro], people have tended to buy complete packages from an agent.''
He and others insist that the rise of on-line bookings does not signify the demise of the travel agent. He ticks off three things that count in the travel industry: the importance and integrity of the brand, channel pricing and customer service. The personal interaction required for good customer service is such that 'in this business, you can't go 100 percent digital,'' he says.
In his view, the future includes both specialized agencies and large, high-volume organizations, on-line and off. ''Everybody needs to offer both,'' he cautions, because ''the real world hasn't gone away.''
Claudia Flisi