eMarketer: Online Travel Sales Booming, But Travelers Dissatisfied With Service

travelerseMarketer is pegging online travel sales to top $105 billion this year in the U.S., up 12% from 2007. But while the dollar amount is increasing, fewer Americans are actually booking their trips online.

According to eMarketer senior analyst Jeffrey Grau, it's because travelers are fed up with the buggy, antiquated booking and planning systems of online travel agencies (OTAs). In fact, Grau says that the usability issues are sparking increased patronage of traditional travel agents.

For this latest report, eMarketer analyzed the browsing and booking habits of leisure and unmanaged business travelers (or people traveling for business that booked their own flights, hotels and rental cars, etc.) as found in reports from Forrester Research, Destination Analysts and others. In 2007, only 55% of travelers booked their trips online, down from 63% the previous year.

Meanwhile, satisfaction with OTAs and supplier-branded sites (such as a hotel chain or an airline's own property) is also falling in 2008. Forrester found that only 66% of travelers said that it was "easy to use the Internet to plan and buy travel" this year, down from 71% in 2007. Surprisingly, the number of travelers that said it was "more convenient to research travel offline" increased to 24%, up from 20% last year.

Consumer satisfaction with traditional OTA sites like Expedia and Travelocity slipped by about 8 points from 2006 to 2007, according to a J.D. Power and Associates survey. The study measured satisfaction across six factors including price competitiveness, ease of booking, usefulness of the info, availability of booking options/packages, the site's appearance and ease of navigation.

"Mired in old technology, the OTAs have failed to keep pace with a newer and more innovative breed of travel Websites built around user-generated content," Grau said. Indeed, travelers are increasingly turning to sites chock full of ratings and reviews like TripAdvisor.

For example, research from advertising and communications agency Ypartnership found that as of December 2007, a third of travelers surveyed said that they regularly visited sites like TripAdvisor, and a third had visited MySpace to read travel reviews. Meanwhile, in June 2008, TripAdvisor took a spot atop the heap of destination and accommodation sites, according to Hitwise, ahead of hotels.com, InterContinental Hotels Group and even Marriott International.

"In addition, a new breed of matchmaking travel sites is bringing traditional travel agency talent online," Grau said. "Sites like Zicasso and Tripology help travelers to exotic locales find travel agents tailored to their interests and needs." These new hybrid sites offer consumers the ability to research possible destinations and activities, and then available agents compete for the rights to plan and book the trip.

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