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Online travel revenues to skyrocket

Online travel revenues to skyrocket

The rapidly consolidating online travel industry will double its revenues in the next three years, according to a report released by eMarketer.

"The online travel sector is becoming increasingly competitive and suppliers are mounting a more aggressive challenge to the online agencies that initially dominated the marketplace," the report stated.

The travel industry currently accounts for 24 per cent of all online advertising, including permission-based e-mails, search engine marketing, and online impressions.

Of those advertising methods, search engines "are the most promising form of advertising that's emerging at this point," said Elkin, adding that search engine marketing is cost-effective, and that consumers are likely to see such ads because they research destinations on search engines.

Despite the companies' attempts to establish brand identities, customers seem to view them.

"Site loyalty is still pretty limited," said eMarketer senior analyst Noah Elkin., adding that consumers site-hop when making travel plans.

The report also broke out online revenues for airline tickets, lodging, rental cars, holiday packages, Amtrak, and cruises.

Within that group, online revenues for airline tickets were the strongest, with projected revenues of $32.8 billion this year, according to Forrester Research data cited in the eMarketer report.

Hotel revenues came in second - but with only $16.4 billion, half the projected revenues of airline tickets.

One reason that hotels are so far behind airlines appears to be that many consumers still prefer to use the telephone to book hotel rooms, especially if they have specific requests - such as an extra bed in the room.

"The Internet may win more often than not in price," said Elkin, "but there are still things that live people do better than the Internet."

Sources: IAB SmartBrief, MediaPost Communications

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