Numbers of Online Travel Customers Are Declining

According to the NY Times, "Travel Sales Still Growing, but Numbers of Customers Are Declining". See here.

It certainly sounds alarming, but maybe because alarming sells newspapers. But let's check out the highlights....

1) According to a recent survey of more than 60,000 Internet users in the United States by Forrester Research, a technology consulting firm, 9 percent fewer people booked travel online this year than in 2005.
JOE> But outside the US, the trend is the other way around. Europe is not yet as mature as the US. The Asian (with 3 billion people) are still getting online and are just beginning their shift from offline to online.

2) PhoCusWright found that among travelers with access to the Internet, the percentage who usually book travel online dropped to 62 percent at the end of last year from 68 percent in 2005, while those who say they usually arrange travel offline increased to 31 percent from 25 percent during the same period.
JOE> Interestingly enough, PhocusWright also published a report showing that between 2005 and 2006, less % of people were Shopping & Buying Travel Online. Increasing were people who Shop& Buy Travel Offline and people who Shop Online & Buy Offline. See below.


3) Industry revenues are still strong, mostly because those consumers who book travel online are doing more of it. According to the Forrester survey, the average online booker said he or she would spend 50 percent more on travel this year than in 2005.
JOE> So what does this mean? People who are online savvy are booking more and people with lesser patience or lower attention span are booking less? Are older people dropping off and younger people staying on and booking more?

4) Online travel executives say part of the reason for the dearth of innovation is that the online travel reservation systems are largely extensions of technology built in the 1960s.
JOE> Are we talking the GDS, PMS and CRS? Some of that is true enough, but the consumers are filtered and do not see a lot of that technology any more with middleware and web applications in the middle. On the contrary, meta search engines, like bezurk.com, and sidestep.com are giving consumers a lot of insight that they never had before.

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But really, the marketplace is overcrowded with OTAs and their affiliates and their spam. Consumers are becoming disenchanted with the intermediaries who are not able to provide the level of customer service that a supplier can. For example, if you book with an OTA and your friend booked directly with the supplier, who do you think has an easier time change or amending a reservation?

It would be very interesting to see if brand direct bookings have increased because consumers find it easier and more reliable to book direct rather than with an online travel agent.

Also, how many of these people who stopped buying online still research online? Looking at the destination and then finding out what is a "good" rate. They may not book online, but it would be pretty stupid not to at least Research online...