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BizReport : Research archives : April 05, 2007

Are online travel sales declining?

A new report from eMarketer indicates a slowdown for the U.S. online travel industry. According to the report, sales will remain strong but the growth rate of online travel sales will begin to decline in the coming years.

by Kristina Knight

In 2006, online travel grossed just under $79 billion, that number is expected to grow to more than $94 billion in 2007 and by 2010, online travel sales are expected to reach $146 billion. With such tremendous growth, could there really be a decline in the industry?

Yes, and no. Online sales are expected to remain strong for the industry, but growth rates will decline, according to the report. With 21% growth in '06, the industry will see only 19% growth in '07. Growth rates will continue falling, reaching only 14% industry growth by 2010.

What are online travel hubs to do? Get competitive. Jeffrey Grau, senior eMarketer analyst and author of the report said, "Industry players must be willing to reinvent themselves to keep up with consumer, technology and competitive forces."

That means turning from a service-based industry to an industry focused on specific travelers or groups of travelers. Including website content such as destination guides, hotel reviews and vacation packages is a good way to increase the value of travel websites. Some of that content can be created by a marketing deparment, but the bulk of reviews and guides should be user-generated.

Tags: online travel, travel industry, travel spending

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  • Jarod Altman

    Online travel is indeed a booming market, and those numbers you were talking about show it. I can definitely see the growth rate of online travel seem to slow in the coming years, but ultimately, online travel is usually the first place most consumers look before booking travel. You’re definitely right about online travel companies starting to think about content to add to their site to make their experience much more worthwhile. That’s why I have been a big fan of the site for my travel. I’ve found great deals on travel and have enjoyed their content of travel guides and reviews. I wouldn’t be surprised to see a boom of travel info to be found across the online travel board.



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