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Restaurant Industry News
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Sunday June 11th, 2006 |
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Online Channels to Generate 60% of U.S. Travel Bookings by 2008
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The trends in the U.S. travel market are clear: Online channels are projected to generate 60% of all U.S. travel gross bookings by 2008, moving into a dominant position relative to offline channels. |
Offline leisure and unmanaged business gross bookings will continue to shrink dramatically over the next three years, and offline corporate gross bookings will follow, narrowing at a more measured pace through 2008 (see Table 1). Online gross bookings growth will reflect not only the gains of the entire U.S. travel market, but the ongoing movement to online booking channels in all segments.
This shift in the balance of power goes across all segments. PhoCusWright projects that 64% of all leisure gross bookings will be made online by 2008, versus 45% in 2005. Similarly, 48% of all corporate gross bookings will be online by 2008, compared to 31% in 2005. The unmanaged business segment is already dominated by the Internet channel, thanks to the online delivery of many capabilities previously reserved for travel agents to individuals and small businesses. By 2008, 82% of all unmanaged business bookings are projected to come be online in 2008, up from the already impressive 68% in 2005.
The total U.S. travel market continues to expand despite war, global health issues, catastrophic weather events, airline bankruptcies, a waning U.S. political image abroad, visa and passport challenges and unfavorable currency exchange rate trends. In 2005, total travel bookings reached US$224.4 billion (see Table 2), the second consecutive year of more than 7% annual growth. These increases are the result of a healthier travel market and escalating economic forces.
Healthy overall growth rates in both 2004 and 2005 results reflect renewed corporate confidence in the travel industry, the continuing willingness of consumers to travel, and broader access to content and inventory. However, this growth has also been boosted by increased rates and fares, largely due to higher fuel prices and city and airport taxes, and increased demand.
These conditions are likely to continue through 2008. Yet U.S. market expansion is expected to taper off as a result of slower economic growth in general, the possibility of further fuel price spikes, slight declines in the number of travelers, tighter control on corporate travel spend as well as lingering security concerns. Thus, growth in the travel market in 2006 and 2007 will be stimulated largely by increased pricing (driven by both demand and expenses), as well as growth in expenditures rather than in numbers of travelers..
The PhoCusWright Channel is an annual, subscription-based, syndicated research service featuring an efficient feed of business and competitive intelligence for the corporate and leisure travel, tourism and hospitality marketplace. Featuring market forecasts, segment data, consumer survey information, insight and commentary, PhoCusWright publishes relevant research and information on an ongoing basis - unprecedented in scope and scale for this industry - that can significantly help your team develop sound strategy and make competitively advantaged decisions.
Copyright 2006 PhoCusWright Inc., Sherman, CT USA +1 860 350-4084
www.phocuswright.com
All rights reserved.
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