Internet Observer

When travel moved online, consumers found it more efficient to book hotels and flights on travel agencies like Expedia. At this time, the website was just like the traditional agency where they provide almost the same service. As time is gone, this type of website provides more and more agency, even seems to replace the traditional travel agency. However, it’ll never come true, for one reason is that the traditional agency i.e. Hilton, CheapTickets and airlines has graduatelly move part of their business online so that people could also visit their website directly to book what they need. Nowadays, a typical travel site has the following categories:

•  Flights
  
•  Hotels
  
•  Car Rentals
  
•  Vacation Packages
  
•  Cruises
  
•  Deals and Destinations
  
•  Maps
  
•  Business Travel
  

Online travel agency (OTA) is mature today. You can find the largest online travel companies such as Expedia, Travelocity and Orbitz are in this class. They own the largest share of the market.

Although the OTA bring a lot convenience to the life, new online travel business model is introduced because of the human nature- the demand of low price. This type of website allow you to bid for tickets and hotels, which might net you a lower price. (Both websites also have regular search features, where you just see the fares without bidding.) The catch is that you won’t know the airline, departure time or specific hotel until you actually buy the ticket, so this option is only for those who are willing to be very flexible. Therefore, the market must be smaller than OTA. Typical site such as: Priceline and Hotwire.

Then another problem came, there’re so much information on hotels, flights and other travel categories because of the boom of online travel, how to choose the best price? Vertical search engine on travel is introduced to the industry naturally. They go through the Internet and the best information for you but they only available in some categories such as fares and hotels and limit to some destinations. Kayak, Sidestep(acquired by Kayak in 2007) and Vayama are some examples. One worth checking out is Farecast.com. Unlike other travel search engine, Farecast.com can forecast the airfare and notice you if the fare will drop. Therefore, it could save your money through prediction.

Whatever OTA or travel search engine, they focus more on providing the information of the product, i.e. prices and amention, rather than the review of the product. In fact, they may notice the service of product such as hotels and adjust their ranking according to the consumers’ opinion one one aspect, but on the other aspect they’re born travel agency. It’s unworth paying too much energy on the review. In this situation, there came the review integrators such as TripAdvisor and Yahoo! Travel. The traffic of the integrators grows exactly quickly. Accoding to Alexa, TripAdvisor is No. 2 online travel site only second Expedia, even sometimes it surpass Expedia and become No. 1(Actually when I check the traffic on Feb. 19, it ranks 741, while Expedia 746). The opinion of TripAdvisor comes from the users, so what happen if the review is from travel experts? Oh, yes, it’s a guidebook. You can find Frommer and Fodor is in this class.

A lot of review site surge in nowadays so that people may be need a search engine focus on review. This may be theopportunity space. Kango, a startup in Palo Alto, claim their work on this aspect in process. Now they have the Beta version and could serch review through the type of cousumer’s requirment such as “family friendly” ect..

Internet plays more than the travel information broadcaster and booker. It’s a travel tools, too. Travel planning is another application. TripHub is one example. It’s co-founded by Microsoft and Expedia in 2005 and faces to the group trip planing. Social networking sites boomed in 2007, offering even more options. Boo.com has travel reviews gleaned from over 2,500 places, photographs and lots of insight into local restaurants and things to do. Besttripchoices.com is a good place to start if you’re not sure where you want to go. It gives you a personality test and then recommends places based on the results. VibeAgent.com mixes meta search capabilities with social networking, and users can even create custom travel groups if you want to fine-tune your travel menu.

Of course, the online travel is far more than I introduce. In the last ten years, online travel act more on booker and broadcaster. Therefore, it will provide more travel tool function in the future. This is the trend. The other trend is that the depth the information will increase. The site will analyze and min the information so that it’ll more convenient in the future. Farecast is just one application.

 

After decades of growing, online travel still have a great potential in U.S. According to eMarketer, a leading marketing research company, U.S. online travel sales reached to $91.3 billion last year, and will continue to grow. The research company also estimates that the market will breakthrough $100 billion before 2010. The estimates from comScore and PhoCusWright indicate the same trend.

The sustained growth in number of tourist continues to support the development of online travel industry. According to a report by Travel Industry Association (TIA), domestic U.S. travel in the U.S. has increased 12.6 percent from 1995 to 2005,which reached to almost 2 billion of people trip[1]. International tourism arrival plays an important part to the travel and tourism industry, which contribute $80 billion. The data from United Nation World Tourism Organization shows that the international tourism arrival grows faster than domestic travel.



With the development of information technology, more and more people uses internet to research, plan and purchase the trip. Travel is one of the most mature B2C ecommerce categories, as measured by the percent of total industry sales generated online. In 2007, 49% of all travel-related reservations were booked on the web, versus 46% in 2006, according to J.D. Power and Associates. However, the online travel owns about 14% of the whole travel and tourism industry in 2006, which still have a great potential.

As the number of tourist is growing and more and more use web to plan their trip, there is a bright future in online travel. It will be boom in the next few years.