2001: An Online Travel Odyssey

Online travel sales were in the midst of what e-commerce research firm comScore Networks calls “almost juggernaut-like growth” at the time of the Sept. 11 attack, and they haven’t recovered yet.

According to comScore’s data, online retail sales excluding travel continued to rise as the holidays approached. But travel sales fell in the fourth quarter after Sept. 11 and the American Airlines crash in New York on Nov. 12. Travel sales had peaked in July and August thanks to high consumer confidence in the sector, steep online price discounts, improved functionality of travel sites and new online travel agencies.

At its peak point during 2001, comScore found that online travel accounted for more than 40 percent of online sales. In the end, however, it finished the year with the same share at which it started. Hot online retail categories, such as computer hardware and consumer electronics began the year at 19 percent of total online sales and finished at 24 percent.

Online Travel & E-Commerce Sales, 2001
(million of U.S. dollars)
Q1 Q2 Q3 Q4 Year
Non-Travel $7,755 $7,585 $7,565 $10,804 $33,709
Travel $3,727 $4,892 $5,735 $5,003 $19,357
Total $11,482 $12,477 $13,300 $15,807 $53,066
Source: comScore

Concerns about travel safety and a down economy have combined to cool off a sector that had no shortage of demand. According to the PhoCusWright Travel Consumer Trends Survey, 21 million Americans “usually” buy their travel online, up 75 percent from 2000. Nearly 27 million Americans have bought travel online at least once, up from 21 million in 2000. Online travel buyers represent 13 percent of the population.

PhocusWright’s study, “The Next Era: Special Update to the Online Travel Marketplace 2001-2003“, identifies a segment it calls “online travelers” — a segment of the U.S. adult population who have used the Web in the last month and traveled by commercial air in the last year. This segment actually books more of its trips on the Internet rather than using a traditional travel agency or calling a supplier.

Almost 60 percent of these “online travelers” said price is the single most important attribute when making personal travel arrangements; and 53 percent believe online travel agencies offer the best prices. An additional percent of online travelers said price was more most important after Sept. 11 than before.

“Online travel is still the e-commerce killer app, despite a very battered market,” said Philip Wolf, PhoCusWright president and CEO. “While consumers continue to look for low airfares, more and more are going online for hotels, vacations and cruises.”

Thirty percent of PhocusWright’s respondents said that the Internet had actually influenced their decision to buy — that is, they bought a travel product after they learned about it online. This brings us to another part of the online travel market was soaring before Sept. 11 — online travel advertising.

Online travel advertising soared in 2001, according to Jupiter Media Metrix, despite a major setback following Sept. 11. Online advertising for the travel industry began a sharp increase the second week of May 2001 with 291.9 million impressions and peaked in the fourth week of August with 1.1 billion impressions, a 263 percent increase. Impressions plummeted during the second week of September and bottomed out at 574.4 million during the first week of October. It then climbed back to 94 percent of its pre-Sept. 11 totals.

Percent of E-Commerce Sales by Month

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