Hotel
Industry Makes Room for Online Bookings
By Robyn Greenspan
Cost-conscious
travelers are not only surfing for low airfares, but reduced-rate
hotel rooms as well, research has indicated. According to
the Travel Industry Association of America (TIA) , 57 percent
of online travel bookers purchased accommodations on the Internet
in 2002 - that's exactly halfway between airline tickets (77
percent) and rental cars (37 percent). Furthermore, Jupiter
Research (a unit of this site's corporate parent), predicts
online hotel bookings to surge from $5 billion in 2001 to
$14.8 billion in 2007.
While
this online revenue may seem like bad news to travel agents,
Jupiter analysts believe that consumers are often overwhelmed
and confused by the rate differentials and choices that are
available online, often preferring to call the hotels directly
or rely on the expertise of a travel agent.
In
fact, Jupiter found that in 2001 for each $1 that the travel
industry realized directly online, travel companies selling
hotel products online garnered an additional $5 of booking
revenue in traditional channels as a direct result of research
that consumers did on the Web. A 2002 Jupiter study of 1,845
online travel buyers and browsers indicated that nearly half
(48 percent) of those surveyed conducted research and purchased
from an agency site, while 34 percent conducted research and
purchased from a supplier site.
Jared
Blank, senior analyst, Jupiter Research, theorizes that an
experienced Internet population will increasingly take advantage
of the hotel industry's reduced rates that were created to
spur sagging occupancies. Additionally, online consolidators
have been proactive in garnering reservations. Blank adds,
"These low rates, and the ease of booking at most online
agencies and consolidators, have brought new consumers online
who otherwise would have reserved their lodging directly with
the hotel."
PhoCusWright
supports the predictions of increased Web bookings, expecting
traditional travel agencies to represent just 18 percent of
hotel sales in 2005 - down from 21 percent in 2001 - as hotel
sales move online. The firm forecasts a 49 percent increase
in online hotel sales in 2002, reaching $6.3 billion.
Vendors
that can successfully capture the online hotel bookings market
would serve the 64 million travelers who used the Internet
to make travel plans in 2002, according to the TIA. Of those
that use the Internet for travel planning, 41 percent actually
made travel reservations online in 2002, translating to 39
million people - up 25 percent over 2001.
January 9, 2003 |
