Unmasked: Online travel industry myths


At the sold-out Analyst Forum event, organized by PhoCusWright and held September 10 at the Grand Hyatt in New York City, six online travel industry myths were debunked.

Online Travel Industry Myth #1: The number of online travel buyers in the US is declining. In fact, that number is on the rise, as documented in The PhoCusWright Consumer Travel Trends Tenth Edition recently published by the travel industry research firm PhoCusWright Inc. In 2007, approximately 70 percent of online travelers (that is, adults who have taken a commercial air trip and stayed at a hotel for leisure in the past year, and used the Internet in the past 30 days) bought travel online, compared to 63 percent in 2006.

In addition to the misconception that online travel buyers are declining, The PhoCusWright Analyst Forum corrected these five other online travel myths:

Online Travel Industry Myth #2. More and more online travel shoppers use supplier sites than online travel agencies. While this belief is widespread in the travel industry, it is simply untrue, according to PhoCusWright. In terms of popularity, online travel agencies are making a comeback (source: PhoCusWright’s Consumer Travel Trends Survey Tenth Edition (CTTS10).

Online Travel Industry Myth #3. Travel agencies are experiencing a resurgence as travelers return to traditional purchasing channels. Not so. In reality, even many formerly exclusive offline buyers are migrating online for travel shopping and buying, according to CTTS10.

Online Travel Industry Myth #4. The next generation of travelers prefers to do everything online. The truth is, less than half of what 18-28 year olds spend on travel is spent online, according to The NEXTgen Travelerâ„¢ report, jointly published by PhoCusWright and Y partnership.

Online Travel Industry Myth #5. Social networks and travel reviews have the greatest influence on travel decision-making. The NEXTgen Travelerâ„¢ report reveals that while social media is widespread, destination Web sites and online travel agencies are favored by nearly half of next generation travelers during the travel shopping process.

Online Travel Industry Myth #6. Online travel markets need high credit card and Internet penetration to succeed. The structure and ambitions of the travel marketplace are even more important drivers than infrastructure. Case in point is India, one of the most dynamic online travel marketplaces today, where roughly 98 percent of the India population do not use credit cards or have access to the Internet.

PhoCusWright’s Analyst Forum will continue to take place on a quarterly basis in New York City featuring a research and analysis on a variety of travel, tourism and hospitality topics. The recently-held event provided attendees with a clearer understanding of the realities of the online travel marketplace, offering facts, figures and insights for strategic planning and decision-making, especially as attendees find themselves engaged in 2009 budget planning.

“Nobody wants to make strategic errors based on bad information,” said Lorraine Sileo, vice president, research for PhoCusWright. “Through this Analyst Forum, we were able to educate attendees about online travel myths and the realities in consumer behavior and to paint a picture of the new distribution landscape so that they can better assess their channel partners, such as travel agencies.”