Cost Savings Draw Consumers to Online Travel

The number of Americans who bought travel online last year grew to 21 million, nearly doubling the Internet travel market for the second consecutive year, according to a survey by PhoCusWright, Inc.

The PhoCusWright 2000 Travel E-Commerce Survey found that online travelers who rely solely on the Internet for travel purchases cite cost savings as the determining factor. Thus, the perception that online travel agents offer the best price is an overwhelming advantage for these retailers. More than half (54 percent) of online travelers say price is the most important factor in buying travel through this channel, followed by reliability (20 percent), ease-of-use (16 percent), and customer service (9 percent).

“Despite all the recent talk of ‘easy dot-com, easy dot go,’ it’s amazing that online travel buying has been embraced by one-tenth of the adult population,” said Philip Wolf, president and CEO of PhoCusWright, Inc. “Consumers continue to defy the skeptics with an insatiable appetite for anything and everything online travel.”

According to PhoCusWright, objections to travel e-commerce are disappearing, as online travelers become more comfortable with Internet purchasing. Seventy-five percent of those surveyed have bought some product online, up from 44 percent in 1998. PhoCusWright’s survey also found that the rise in travel-related e-commerce does not represent one-time customer usage: millions of buyers are returning to purchase more.

“The challenge is not finding new users — 10 million Americans bought travel online for the first time this year,” said Lorraine Sileo, VP of information services at PhoCusWright. “The challenge is keeping online buyers as loyal customers.”

Other findings of the PhoCusWright survey include:

  • Of the 21 million online travel buyers in 2000, 7 million of them now buy travel exclusively online
  • Online travelers who usually buy their personal travel online have grown from 10 percent in 1998 to 27 percent today — now 13 million individuals
  • Online travel buyers take more trips on average than non-buyers — 5.8 percent vs. 3.6 percent. They take more business trips (3.6 compared to 2.0) and more personal trips (2.3 vs. 1.6)
  • Online travel sites have moved into first place as the research tool of choice for leisure travelers; 44 percent use one or more travel-specific Web sites when researching personal travel, up sharply from 28 percent in 1999.
  • 91 percent of online travel buyers say they picked the main online travel service they’ve used because “it seems to have good prices.” Ease of use ranked second at 80 percent.

The PhoCusWright survey was conducted by telephone among a random sample of Americans across the country. More than 10,000 individuals were contacted to obtain a sample of 505 “online travelers,” Americans who’ve flown via a commercial carrier in the last year and used the Internet in the last month.

Related reading