Internet travel planning is taking off, study finds

<small>Usage has climbed 146 percent since '98</small><br> <br>More than 16 million Americans used the Internet last year to book airline tickets, hotel rooms, rental cars and package tours - a whopping

Tuesday, February 8th 2000, 12:00 am

By: News On 6

Usage has climbed 146 percent since '98

More than 16 million Americans used the Internet last year to book airline tickets, hotel rooms, rental cars and package tours - a whopping 146 percent increase over 1998, according to a travel trade association.

That means that 20 percent of Internet surfers used the Internet to make travel plans, the Travel Industry Association of America says in a study to be released Tuesday.
Travel planning has been a staple of the Internet for several years, but the new figures show how rapidly such use is growing.

David Sams, who logged more than 150,000 frequent flier miles last year flying out of Los Angeles, is one traveler who regularly books his personal trips through the Internet because he can easily compare schedules and fares that way.

"I do use it to search availability when I take vacations. I use it a lot," said Mr. Sams, who is chief executive of Vision Merchants Inc., an entertainment and live-event production company.

"On the United site, if you ask for a particular trip and a lower fare is available on another airline, they will tell you. I find that refreshingly honest. It also shows a confidence in your product."

The availability of such comparison studies is "definitely a good thing," said Megan Ward, spokeswoman for the Texas Travel Industry Association in Austin.

The Internet "gives consumers more power and more options, which definitely improves the marketplace, and it gives tremendous exposure to a wider variety of communities and attractions."

For example, small rural Texas communities can obtain Web sites relatively cheaply and can attract families and other leisure travelers with information not available from travel agents, Ms. Ward said.

"Definitely the winners are the smaller communities across the country, especially in Texas, who may not have had the funds necessary for marketing," she continued. "This gives them a massive amount of exposure."

But there are losers, too. Some corporations, for example, have started booking employees' travel over the Internet rather than using travel agents. Plus, many airlines offer bonus miles to customers who make travel plans on the Web, rather than through agencies.

"A guy told me he got a better price on the Internet," said George Varghese, manager of Airway Travels, who said his income has been cut at least 50 percent in the last year by customers using the Internet instead of him. "One by one they are going out, and it's mostly the younger person. Most of them go through the Internet."

Demographics

According to the study, 44 percent of people who booked travel on the Internet were between the ages of 18 and 34. Nearly half - 48 percent - were older, between 35 and 54 years of age. Eight percent of people age 55 and older made travel plans on the Web.

More men than women used the Internet to reserve airline seats, cars and hotel rooms - 57 percent compared with 43 percent, according to the study.

And the average household income of the Internet user was $91,000: 31 percent earned between $50,000 and $74,999; 28 percent brought home between $75,000 and $99,000; 21 percent earned more than $100,000; and 20 percent made less than $50,000, according to the study.

At Great Vacations Inc. in Oak Cliff, the Internet has had an impact concerning some of the travel agency's corporate clients, according to owner Barbara Robertson.

Airline incentives

"We have seen it slightly with some of our corporate people, who are getting bonuses from the airlines, like extra frequent flier miles, and our corporate people who know exactly what they want and don't care exactly what it costs," Ms. Robertson said.

She said she has seen the impact mostly in bookings for flights and not so much in booking rental cars and hotel rooms.

"With cars, they don't necessarily trust they're getting the best deal" on the Internet, she said. "For hotels, they may go on a site and check it out, and then they'll call us."

She said she doesn't feel as if she's lost much business from the Internet, particularly since the airlines recently have cut their commissions to agents from 10 percent to 5 percent. The part that hurts, she said, is when people call and ask her for the best deal, then get their tickets on the Internet to obtain bonus miles from the airlines.

Ms. Robertson said it is not always the case that consumers can get better deals on the Internet.

Exceptions

"I had a lady come in this morning," she said. "She had an emergency in Los Angeles. She checked it herself online, and she couldn't get one for less than $500. But I found one with a connecting flight for $360. We can still find things other people cannot find."

In a separate report, the national travel group said that online travel revenues were $3.2 billion last year and are projected to grow to $4.7 billion this year. By 2002, online revenues are expected to balloon to $8.9 billion.

In 1996, nearly all online travel revenues came from airline ticket sales. But their percentage of the market is expected to drop from 90 percent to 75 percent by 2002 as online hotel reservations and car rental business grows from $938 million this year to $2.4 billion in 2002, the association said.
Ms. Ward, the Texas travel association spokeswoman, said she doesn't see the Internet travel frenzy ending soon, and she thinks that's a good thing.

"You can book discount travel if you have the foresight," Ms. Ward said. "I'd say consumers also benefit because it gives them more power to make their decisions, and to comparison shop and to customize their travel plans."

Staff writer Katie Fairbank contributed to this report.