Online travel-industry spending will return to positive growth this year, following a drop in Internet bookings in 2009, according to ComScore, a research firm that started tracking online travel sales in 2002.
Even as the economy rebounds from the recession, however, ComScore said it expects the growth rate for online travel sales to still be only about half that of nontravel retail because of the relative maturity of travel e-commerce markets.
Travelers boosted online spending for the first nine months of this year by 5% compared with a year earlier, ComScore reported in a Nov. 10 webcast. Travel spending on the Web dropped 5% in 2009, marking the first year-over-year decline in the eight years since ComScore began tracking online travel sales.
This year's spending increase reflects what appears to be a rebound in demand. The growth rate relative to nontravel also illustrates how travel spending growth on the Web usually lags that of nontravel.
Many nontravel retailers didn't launch Internet sales until long after online travel agencies were already well-established. Nontravel online spending was flat in 2009 but is up 9% year to date.
"The online travel sector is a more mature market than retail e-commerce and as a result will typically exhibit less extreme behavior than the online retail sector," said Andrew Lipsman, senior director for industry analysis at ComScore.
During the middle part of the last decade, online travel spending growth regularly exceeded 20% and matched nontravel spending increases. Online travel spending leveled off in 2006 as booking through online travel agencies like Expedia, Travelocityand Orbitz became the norm. The only exception was 2008, when online travel spending growth surpassed nontravel on the combination of skyrocketing airfares and overall spending declines as the recession set in.
"Consumers have been buying travel online since the mid-1990s, and travel companies embraced the Internet much faster than retail," said Henry Harteveldt, principal analyst with Forrester Research.
Harteveldt noted that while about a third of travel revenue is spent through the Web, many of the largest U.S. retailers derive less than 10% of their revenue from the Internet. "It becomes harder and harder every year to have the mind-boggling leaps in growth," he said.
Still, the return to positive spending bodes well for both intermediaries such as OTAs and direct suppliers like carriers and hotel operators. Expedia and Orbitz each reported Q3 earnings growth, while Priceline.com's profit, excluding a year-earlier tax benefit, also surged.