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U.S. Online Travel to Grow 9 Percent in 2009

Posted by TeamITI on January 14, 2009

growth

Although online travel is showing signs of a mature marketplace, its growth will continue to outpace the total travel market through 2010. The market offers significant opportunities—to those who take advantage of them—even amid the current weak economic climate.

Key Findings:

  • U.S. leisure / unmanaged business travel bookings accounted for $89.7 billion in 2007, more than one-third of the total travel market.
  • Despite broad economic turmoil, softening consumer spending and declining travel demand, the U.S. online travel market is projected to grow in the high single digits through 2010, far ahead of the total travel market.
  • Supplier Web sites and online travel agencies are expected to hold a temporary share equilibrium through 2010 at 61% and 39%, respectively, but this equilibrium remains uneasy: intense competition and powerful economic trends are driving turbulent dynamics in online air and hotel sales.
  • Market maturity is sparking significant innovation in consumer marketing, media revenue models and trip planning/destination content products. Supplier sites are trying to get more dollars out of purchasers, while online travel agencies are trying to monetize unconverted visitors.
  • The impact of airline capacity cuts across the industry remains far from clear, as a rapidly deteriorating economic climate may further reduce demand and restrain airlines’ ability to raise fares.
  • Online travel agencies—in particular opaque sites—are getting a mild counter-cyclical lift from weaker demand in the current tough economic climate; travelers are increasingly shopping online for better bargains.
  • Dynamic packaging is experiencing a moderate resurgence as increasingly bargain-hungry consumers respond to the “book together and save” proposition.
  • Spurred largely by rising fuel costs, soaring airfares and growing concern for “green” travel, Amtrak is experiencing record growth in overall ridership and online bookings.

Related article: PhoCusWright US Online Travel Overview 8th Edition.

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