Online Agencies Lead for Vacation Packages

A collaborative report from Vividence and PhoCusWright Inc. revealed that online travel agencies led its offline counterparts by an almost 2-to-1 margin for vacation package planning. The November 2003 study of 1,500 vacation-planning Internet users revealed that the Internet figures prominently into their decision-making, with some consumers opting for ready-made travel packages.

An overwhelming 80 percent reported that they would consider purchasing their vacation packages from online travel agencies, while only 42 percent indicated that they would consider making their package purchases through an offline travel agent. Destination Web sites and airline Web sites trailed considerably behind online agencies at 48 percent of respondents and 47 percent, respectively. Car rental Web sites were a consideration to only 12 percent of the survey participants.

Even though online agencies seem to have the edge, offline travel agents have an opportunity to compete if they find the right niche. Stacey Keating, consultant, Vividence, suggests that offline agents capitalize on complex travel needs. “Anything that’s beyond the standard, the offline agencies can put together better packages and offer considerable research.”

Keating notes that technological limitations can hinder online travel purchasing, because there isn’t always a mechanism to go to a number of places. “Offline [agents] should emphasize real-live expertise for more complicated situations.”

International travel where there is a language barrier, trips with multiple destinations, and cruises that require airport transfers are among the complications that Keating finds occurring online, and the perfect solution may come from offline agents who use online marketing and tools to provide customized service to Web-dependent travelers.

While 28 percent have already bought travel packages online, 68 percent expressed a desire to do so for their next vacation, citing price and convenience as motivating factors. The survey revealed that 84 percent believed they were able to get a better price with a vacation package, and 77 percent found that buying multiple services together allowed them to save time. More than two-thirds (69 percent) cited the ability to book all services with one company as a benefit, while 38 percent said the packages were easier to coordinate with others in the traveling party.

The report revealed a number of barriers to pre-packaged vacations, primarily the lack of inflexibility indicated by 73 percent of the respondents. More than two-thirds (68 percent) thought they could put together a better deal on their own, and half of the survey participants wanted to be able to select their own providers.

Travel consumers are often performing “double research” to comparison shop packages against individual services, but Keating expects that dynamic or customized packaging will eventually allow for greater understanding and comfort with ready-made vacations. Customized packages will be most popular (64 percent likely to purchase) as consumers seek greater flexibility in brand and product selection, scheduling and validation of a “better deal” than if the travel services were purchased separately.

“Greater awareness will come as consumers recognize there is broader market of packages, and planned packages lose their stigma,” said Keating.