Online travel bookers set to make mark with groups

Online travel bookers are beginning to court group travellers, customers they previously ignored because of technological limitations.

Experts say the thrust by Internet companies into the group travel market is new, but is shaping up to be a rich frontier for the highly competitive business in which bookers must distinguish themselves by anticipating travellers' needs.

"Group travel is very much a nascent part of online travel," said Henry Harteveldt at Forrester Research, an independent technology and market research company.

Analysts say the group travel market is too new to estimate its percentage of total Internet travel bookings.

For the most part, online travel bookers such as Saber Holdings Corp.'s Travelocity and Cendant Corp.'s Orbitz cater to individuals and groups of four or fewer travellers. Planning for large groups such as conventions remains largely the domain of hotel event planners.

But online travel companies have been trying to single out a new niche of smaller groups like weddings, family reunions, church groups and travelling to sports teams' away games. Those groups tend to have fairly uncomplicated needs and can be addressed by online bookers, provided they have the technological capacity.

Group travel amounts to a $40 billion-a-year business in the United States and Europe, said Michael Stacy, chief executive of Groople, an online travel company that specializes in group bookings. Typically those groups make their reservations by phone.

Groople, which launched in July 2004, has developed its own platform for booking reservations for groups of five or more.

"The existing technical infrastructure can't handle more than four people in a particular reservation," Stacy said of most Internet travel bookers. "That's a technical limitation that is inherent in the space."

Groople -- which has no affiliation with Google Inc. -- provides the group travel bookings platform for No. 2 U.S. online travel agency, Travelocity.

Stacy said the company's revenue grew 500 percent in 2005, though he declined to give specific figures. He said Groople has few competitors at the moment, but he expects others to enter the group market soon.

"It still seems to be virgin territory as far as the competitive landscape is concerned," Stacy said. "I fully anticipate that there will be competitors nipping at our heels."

Orbitz, the No. 3 U.S. on-line travel agency, has a partnership with Group Travel Planet, which handles bookings for groups of five or more.

The company aims to add more features to group travel bookings in a drive to simplify the process and attract loyal customers, said Jeff Grant, Orbitz's vice president of hotels. For example, in November Orbitz unveiled a function that allows one person to make a group reservation, while leaving payments to individuals within the group.

"The trend we've seen with group travel is the more complex the transaction, the later the adoption period," Grant said. "We're really in the early adoption days of group travel."

Forrester's Harteveldt said that aside from technological obstacles, entrants to the group travel market face the daunting task of convincing hotels to make group bookings available to third parties.

He said hotels may never cede control of large event planning to online bookers. But as Internet companies make inroads in that market, hotels may shift some of that work to travel sites or acquire a group site of their own, he said.

Lorraine Sileo, analyst at PhocusWright, a travel research company, echoed that sentiment. Group travel is a small niche for Internet bookers, but it is a market that eventually will be cultivated, she said.

"Today, it's still in that stage where it's small," Sileo said. "But I think, with confidence, we can say that it will grow."

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