Jupiter says travel suppliers 
missing online market potential

May 13, 1999 - CHICAGO — Travel suppliers are not realizing their full online market share potential even though US consumers will spend $16.6 billion in 2003 onbooking leisure and unmanaged business travelonline.

According to a study by Jupiter Communications, airlines, car rental companies, and hotels have allowed their Web sites to stagnate and must continue to market aggressively to acquire and improve execution to retain today's travel consumer.

Findings from Jupiter's research on the online travel industry are being presented at the @Travel Forum this week in Chicago at the Sheraton Hotel and Towers

"Online consumers are being courted by more and better travel options, and travel players are letting the opportunity to retain these consumers slip," said Fiona Swerdlow, research analyst for Jupiter's Digital Commerce Strategies. "In the last two years, suppliers geared up and moved to disintermediate the  travel agent market. However, despite falling commissions and increased competition, travel agents have conceded only one percent of the US online travel market."

The Internet has had a significant impact on the travel industry — perhaps more so than on any other sector. Jupiter's new travel projections show that air travel will continue to dominate the travel products sold online, representing more than 80 percent of the online travel dollars.

However, as online car and hotel bookings continue to climb, that share will fall to 60 percent of what promises to be a $16.6 billion market in 2003. Jupiter's research also indicates that 66 percent of online consumers have used the Web to research and or book travel online, which will result in nearly 10 percent of the US travel market will be booking online in 2003.

"Players within the online travel market are not only competing among themselves, they are competing with the off-line travel channel," added Swerdlow. Even though dollar spending continues to grow, online travel players will not see significant customer growth unless they create online product offerings that simplify the purchasing process and exceed the value of traditional offerings."

About 600 delegates are attending @Travel Forum, representing all facets of the travel industry, will hear keynote addresses from Bob Crandall, former chairman and CEO of American Airlines; Hal Rosenbluth, chairman, president, and CEO of Rosenbluth International; Jay Feldman, SVP and GM of the Travel Channel; and Jack Williams, president of Royal Caribbean Cruises.

@Travel's agenda focuses on the ways in which the Web is changing the travel business, including the disintermediation of the traditional travel agencies, the future of big-ticket leisure travel products such as cruises, tours, and resorts, and the continued challenge of attaining profitability in an era of shrinking commissions and growing competition from travel suppliers themselves.

 @Travel features 14 presentations and panel sessions featuring the industry's top executives, including Richard Barton, GM, Travel Group, Microsoft; Antoine Toffa, CEO, TRIP.com; Nick Doran, VP Distribution Strategy, British Airways; Michael Mulligan, chairman and CEO, MapQuest; Gadi Maier, president, CEO, and chairman, Internet Travel Network; and John Dean, VP Travel Products Groups, ONSALE. Panel topics for the two-day forum will include "Disintermediation: Will The Agency Survive";  "Alternative Revenue Sources: The Road to Profitability"; "Europe and Beyond"; and "Brands Selling Direct: Dealing With Channel Conflict." Primary sponsors of @Travel include 24/7 Media Inc., Upside Media Inc., Preview Travel, Arthur Frommer's Budget Travel Online, MSN Expedia, skymall.com, Travelescape.com, LastMinuteTravel.com, travelscape.com, MapQuest.com, Amadeus Global Travel Distribution, Inc., and TRIP.com.

Jupiter Communications is a new media research firm that helps companies make intelligent business decisions about consumer interactivity. Focused exclusively on how the Internet and other technologies are changing traditional consumer industries, Jupiter's Strategic Planning Services (SPS) deliver a continuous flow of analysis, primary data, and market projections. Established in 1986, Jupiter Communications, LLC is an independent, privately held company with offices in New York City and London as well  as a joint operation in Sydney, Australia. 

Source: WebTravelNews.com