Internet may account for one in every four travel purchases in the main generating markets within the next five years, according to a recent report issued by the World Tourism Organization Business Council.
Growth in online travel sales has been so rapid, compared with other products, that it could also represent nearly half of all e-commerce within the next two to three years, said the council’s chief executive officer, Jose Antonio Ferreiro.
“Those who choose to ignore e-business–or regard it as a peripheral activity – do so at their peril,” he said. “Their major competitors will certainly be exploiting the opportunities it presents to enhance their competitiveness.”
Use of the internet by the tourism sector has already expanded at a dramatic rate and North America’s initial predominance in the number of internet users could be surpassed by the Asia-Pacific region as early as 2003, he added.
Greece is not doing bad either. One out of five Greeks uses a computer and one out of ten has Internet access, according to research results by the National Network of Research and Technology. Internet users here surpassed 10% of the total population in the first half of 2001, and that percentage is expected to have increased at least by another 2% at the end of the year. Originally, studies had projected Greek users would reach the 12% plateau in 2004.
Meanwhile, according to the new WTO report E-Business for Tourism: Practical Guidelines for Destinations and Businesses, tourism and the internet are ideal partners.
The report, which is aimed at giving practical guidance on how to conduct e-business, says information packed websites help consumers overcome the problem of making a costly purchase without seeing the product they are buying beforehand. Companies benefit through being able to provide information and booking facilities at a relatively low cost, and by having easier communication with their suppliers and clients.
But while internet sales currently account for about 15 per cent of travel purchases, at best estimates, the study says: “It seems reasonable to anticipate that internet transactions may account for 20 to 25 per cent of all tourism sales in the main markets over the next four to five years.”
Destination management organizations (DMOs), which in the past have tended to be providers of information and have been involved in facilitating relationships between tourists and business, will become more immersed in actual transactions, the report predicts.
For small and medium size companies, which make up the vast majority of the tourism enterprises, the growth of the internet is leading them to change at a much faster pace than they have been accustomed to.
To ensure their survival, the greatest challenge will be to focus on finding solutions that match their size and competitive position.
With independent hotels, for instance, the flexibility of the web gives a greater opportunity to attract international clients, to enable visitors to customize their own tours, and build an individual client base instead of relying on traditional mass marketing. Similarly, travel agents must move beyond ticket selling, which is readily available on the web, and look at offering more value added services.
But the study emphasizes that internet booking is not the panacea for all the tourism industry. By retaining the human touch and specializing wisely, smaller offline travel agencies can reach a reasonable level of profitability and minimize the time it takes to customize clients’ requirements. Nevertheless, too many small and medium size tourism companies are still unresponsive to new technology because of fear of the unknown, a lack of focus on growth, or they believe it is already too late to enter.
Technology is increasingly more accessible and getting started is only a matter of knowing what you want to achieve. This 290-page publication, available in English, Spanish and French, can help businesses in the tourism sector take that crucial first step.
To purchase this book online visit the Infoshop at www.world-tourism.org
Meanwhile, another recent study, the annual PhoCusWright Travel Consumer Trends Survey, reveals that for the first time ever, more online travellers booked their trips on the Internet than by using a traditional travel agency or calling a supplier.
When asked, “how do you usually buy your personal travel?” 41% of respondents go online versus 26% who use a travel agency and 26% who call a supplier. Last year, using travel agencies was the leading method for 39% of respondents, and online ranked last at 27%.
This phenomenal growth in online travellers who usually buy their travel online is the result of consumers’ increased desire for low price. Almost 60% say price is the single most important attribute when making personal travel arrangements; and 53% believe online travel agencies offer the best prices. Travellers are more price-sensitive than ever; an additional 8% of online travellers say price was more important after Sept. 11 than before.
And while consumers continue to look for low air fares, the study found that more and more travellers are going online for hotels, vacations and cruises.
As in previous years, this PhoCusWright survey was conducted by telephone among a random sample of Americans. More than 10,000 were contacted to obtain a sample of 501 online travellers. Unlike much e-commerce research, this is a fully representative, scientific random-sample survey whose results can be projected with confidence to the nation’s adult population. Findings included the following. Ninety percent of online travel buyers said that low price was a “major factor” in choosing a site to buy travel.
Although 55% of online travel buyers said that destination information was a “major factor” in choosing a travel site, only 7% said that destination pictures/videos were important.
Ninety-one percent of online travellers have “looked” at travel Web sites, up from 84% last year; Half of those who visited travel Web sites, i.e., looked online, then bought offline.
Thirty percent of respondents said that the Internet has actually influenced their decision to buy – that is, they bought a travel product after they learned about it online.
Of those people, one-third bought that product online all the time, one-third offline all the time, and one-third bought it online sometimes/offline sometimes.
The majority of cruise and vacation travellers are interested in buying online – 66% of cruisers said they would buy a cruise online, 60% of vacation package buyers said they would buy that product online in the future.
Perhaps more important as a sign of the times is website finances. It appears major travel sites are on the road to making money. Online travel website Expedia reported better than expected earnings for the better part of last year. Travelocity turned in street-beating results of its own on revenue that was up 76 percent from a year earlier.