Forecast predicts online travel sales will continue steady climb

JupiterResearch, an analyst of online business trends, predicts in a new report that $128 billion worth of travel will be purchased online in 2011, up from $85 billion in 2006. Jupiters U.S. Travel Forecast, 2006 to 2011 also notes an increasing share of online business is shifting from retailers to suppliers sites.

The report predicted that 38% of all travel will be purchased online by 2011, up from 30% in 2006.

Jupiter based its predictions on the continuation of the current growth rate, which is 9% compounded per year.

Price increases, along with increases in inventory and load factors, will drive total airline revenue to $281 billion in 2006, according to the forecast.

Jupiter analyzed leisure and business travel.

It estimated 2006 airline ticket sales will total $138 billion, $49 billion of which will come through online bookings. Jupiter predicted that number will grow to $72 billion by 2011.

The forecast noted an ongoing shift in market share on travel bookings from online retailers to supplier sites. Supplier sites now account for 57% of all online leisure travel revenue. Jupiter expects that percentage to grow to 62% by 2010.

A factor in that shift is the growing popularity of travel metasearch engines, or scrapers, such as Sidestep and Kayak. The study found that scrapers remain a relatively small factor in the online travel market, but they tend to drive traffic to supplier sites instead of to retailer sites.

To compete, retailers have to meet consumers expectations for best prices and high functionality, the report said.

On the business travel side, the study found little shift from unmanaged to managed business travel in 2006, but among companies that are managed the movement has been toward stricter management. That is, more companies within the managed travel sector are requiring strict compliance to the use of designated travel partners.

However, unmanaged frequent business travelers expressed more satisfaction with price and service than their strictly managed counterparts.  

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