We’re Taking Over

All the news these days seems to tell of how the Web lost.

We didn’t take over the pet-supplies business, or the grocery business, or the furniture business. The world hasn’t all gone online to handle its business procurement and its international trade.

But there is one niche, a big niche, where we are taking over. I wonder what the world would look like if it were all like the travel business.

Travel is now the largest niche on the Web, according to a new report from eMarketer. Some $13 billion in travel spending went online in 2000, up from $7 billion in 1999, the report says, and online bookings could top $20 billion this year.

“The Internet really is an ideal medium for research and buying travel products,” Senior Analyst Noah Elkin said.

However (and this is important), even the success of the Web hasn’t ushered in an era of good times and fat profits. The airlines (in particular) have been using the Web’s rise to cut out all middlemen, both online and offline.

In the latest moves, Northwest Air has eliminated all online commissions (the sites responded just like travel agents do, tacking on $10 surcharges to those tickets), and the industry prepared to launch a competing site called Orbitz. To some analysts it looks like the airlines are simply going to scoop up the chips created by the online revolution.

“It’s probably too soon to declare victory for the airlines,” said Elkin, but investors over the last year have at least been better off owning Expedia than, say, Yahoo.

Consumers, however, haven’t seen much benefit. Sure, I can go to Expedia (or its rival Travelocity) and do what my travel agent used to do — check fares and build trips. I can handle a hotel, air, and car reservation all in about 10 minutes. I can even try sites like LastMinuteTravel.com for bargains (and there’s always Priceline).

But many travel options don’t translate well online. How am I going to choose among the various Caribbean cruises (hint — if you don’t smoke, look for a no-smoking boat) or European bike tours? The Web seems fine for the main line, but travel is about getting off the beaten path.

“The distribution channels for those more esoteric trips are in even worse shape than the Web agencies,” Elkin admitted. “The concern is clearly that consumers will be left with fewer options, and, consequently, they will have to suffer higher prices,” he said. Elkin won’t grant conventional travel agencies more than even a near-term future.

Personally, I think that the online and offline agencies need to get together. Online scripts can offer me a choice among offline agents and pay some money back in exchange for passing those customers along. The affiliated agents booking adventure holidays might still find some commissions even if they close their offices in favor of using telephones and computers exclusively. I smell a business model.

But that’s for the future. The lessons of the present seem clear. Even when we win, we don’t necessarily win, and the consumers we claim to serve don’t necessarily win, either. It brings to mind the old saying that you should be careful what you wish for because you just may get it.

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