The recession is finally taking its toll on online travel, with a decline in revenues this year forecast by PhoCusWright, the travel industry research company.
PhoCusWright said the value of online leisure and unmanaged business travel bookings would drop 3 percent this year to $93 billion. The company said it was the first time since PhoCusWright began tracking the marketplace in 1998 that online travel has fallen year over year.
The company defines online leisure and unmanaged business travel as all bookings made for leisure or personal travel purposes (everything from vacations to visiting friends or relatives), as well as all air, car rental and hotel expenses associated with business travel in firms that do not have a travel policy dictating types of travel, suppliers, fares or rates. Typically that would include small businesses and people who are self-employed.
Online travel bookings now account for more than a third of the total travel marketplace, PhoCusWright said, adding that the online portion of the business is “now more or less mature and far more susceptible to broader swings in the economy.”
The PhoCusWright report added that while online travel will decline in 2009, “it will still far outperform the broader travel market and return to positive growth much sooner.”
The company predicts an overall decline in all travel of 11 percent in 2009 to approximately $241 billion. This returns the total market to pre-2006 levels, when U.S. travel supplier revenue reached $251 billion.
The company also said that the drop in travel is “driven primarily by an even sharper decline” in corporate travel and the groups and meetings markets.