By the year 2002, hotel bookings via the Internet will generate approximately $3.1 billion in revenues for online providers, up from less than $100 million in 1997, according to a new report from Bear, Stearns & Co.
The Internet is poised to be the most significant technological advance ever to affect the economics of the U.S. hotel industry, the report goes on to say.
Bear Stearns Senior Managing Director Jason N. Ader said hotel revenues from Web bookings will account for one-quarter of all online travel dollars in 2002, up from just 9 percent in 1997. The findings were released at the American Gaming, Lodging & Leisure Summit at the Bellagio Hotel in Las Vegas.
“The introduction of toll-free telephone service in the 1960s was the last great technology innovation to greatly affect the economics of hotel booking–and that is nothing compared with the mighty punch of the Internet,” Ader said.
“Five years ago, there were very few options for Internet direct hotel booking. Today, there are half a dozen strong players and more on the way. We expect rapid growth to continue ahead, presenting challenges and opportunities to travelers, lodging companies and investors alike,” he said.
Web sites offering hotel reservations are some of the most heavily marketed and visited on the Internet, according to Bear Stearns. In 1998, there were approximately 150 million visits to such sites, with that number expected to more than triple by 2002.
The sites’ immediacy, desktop access and promise of competitive pricing lures business travelers frustrated by marathon phone calls with corporate travel agents–and hotel rates at the high end of the scale, the report said.