Online Travel Sales to Increase 6 Times by 2001, Research Says
1/7/00 9:12:00 AM
Source: Bloomberg News
London, Jan. 7 (Bloomberg) -- Worldwide online travel sales will increase six times in value by the end of next year as tourists take advantage of cheaper flights and packages sold on the Internet, according to Gartner Group Inc.
The Internet travel market will be worth $30 billion in 2001, from $5 billion in 1999, the report said. Three-quarters of Internet users go online to look for travel information and discounts before traveling, with 16 percent booking tickets online as a result, it said.
The online travel industry is booming as tourists take advantage of the convenience of looking up travel information on the Web and of discounts offered by Internet services. Travel companies without a Web site will need to merge with online services to survive, the report said.
``By the second quarter of 2000, nearly all leisure travel companies that do not offer online reservations, ticket sales and travel information will be driven out of the market or acquired,' said Lou Marcoccio, research director for Gartner Group's e- Business Transformation service.
Companies with a small part of their business online will have to increase their Internet presence or make acquisitions, the report predicts. Medium-sized companies with some Internet services are the most attractive targets for purchase, while large companies are also combining their units to improve products and sales.
Ebookers Plc, a U.K. online travel agent, recently bought three closely held European travel companies giving it access to 2.1 million Internet users while expanding its business in other countries. The company put aside $8 million for acquisitions after a share sale in November and plans further purchases.
Airline Forecast
Expedia Inc., the travel bookings service owned by Microsoft Corp., recently added the content of popular travel publisher Rough Guides, part of Pearson Plc, to its U.K. Web site, hoping to increase sales of tailor-made trips, which are usually more expensive than package tours.
Large airlines and travel companies have invested heavily in the Internet. British Airways Plc, Europe's biggest airline, which makes 1 percent of its revenue from online sales, recently forecast half of its revenue will come from the Internet within five years. It is spending $250 million on a new computer network to focus more on Internet sales.
Still, the research showed most users go online to get information before buying offline because of concerns about the security and complicated application processes. Users said they wanted a more flexible and straightforward online ticket ordering process, the report said.
More than 70 percent said they would buy online if they could see all of the possible rates and conditions for flights, with better facilities to cope with individual needs.
There will be 18.5 million regular Internet users in the U.K. by 2004, according to research company Fletcher Research Ltd. |
