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How Much Will Online Travel Slow?

Digital bookings shift into a lower gear.

Online travel bookings will total $98.2 billion in 2008, up just 9% over 2007, according to PhoCusWright. The company said that some online travel providers would fare better than others, with rail sales growing by 28%, while hotel bookings would rise only 8%.

If the numbers prove true, this will be the first year of mere single-digit growth for US online leisure/unmanaged business travel. However, online growth will still be twice as high as that of the total travel market.

PhoCusWright said that reasons for online’s continued success included consumer comfort with online purchasing, perception of the Web as having the lowest prices and supplier disincentives for booking through other channels. The company also said sales from leisure/unmanaged business travel sites will represent 36% of the total market in 2008, up from 34% in 2007.

eMarketer’s most recent online travel sales estimates for the US were created in August 2008, in the midst of the economic slowdown but prior to the financial industry crisis. At the time, online leisure and unmanaged business travel sales (including airline, hotel, rental car, vacation package, intercity rail and cruise) were predicted to grow 12% this year to reach $105.1 billion.
Jeffrey Grau, senior analyst at eMarketer, said that if the market were being assessed today, the estimate would be lower and more in line with PhoCusWright’s. [eMarketer]

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