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June 24, 2002

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  eTravel and eTourism in the United-States: $64 billion in 2007

eTravel and
eTourism in the
$64 billion
in 2007

Television plus
a bet
that might
well win


The Jupiter Media Metrix company forecasts that online travel sales should more than double between now and 2007 in the USA, going from $24 billion transactions in 2001 to $64 billion in 2007.

These figures are given all sectors taken into account: airline, car rentals, cruises, and hotels.

According to Jupiter Media Metrix, the Internet should account for as much as 22% of all travel bookings by 2007, up from 11% today.

As far as the behavioural point of view is concerned, Jupiter Media Metrix's latest survey indicates that 77% of American web users who are looking for a travel online visit more than one site in order to compare prices.

Please also note that 73% of online travellers have already chosen the duration of their trip, as well as their dates (81%) and destination (89%) before they actually start looking for a trip online. And yet, only 41% have already decided on their trip budget before they start looking.


These elements are especially important and should be taken into account by eTourism web sites; indeed, it would allow them to give their users an adequate merchandising as well as customised search engines, especially well suited to this type of behaviour.

And this is when eShopability becomes valuable: some web sites whose ergonomic aspect and usability both prove excellent can still have a poor looker-to-buyer conversion rate if they do not obey all the eShopability rules.

Within the travel sector, Jupiter foresees an especially strong growth as far as business travel is concerned: a 400% growth between now and 2007 with online sales reaching $27 billion, up from $5 billion in 2001. What this means is that online business travel should account for as much as 26% of all business travel by 2007.

Jupiter Media Metrix gives us a detailed forecast for each sector:
- Airline tickets should account for 27% of all online travel sales by 2007 and amount to $40 billion.
- 24% of car rental bookings are expected to be made online by 2007 and should account for $7 billion.
- Online hotel reservations should amount to $25 billion by 2007 and account for 16% of all hotel reservations.
- Cruises, which are the least successful eTourism sector, are expected to remain the sector most badly represented online, even in 2007, and should not account for over $1.8 billion.

Source : Jupiter Media Metrix


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   Television plus Internet: a bet that might well win  

Interactive television failures have been especially resounding up till now and channel television Internet web sites are more something extra than a real strategy of synergy between the two media, except for, French competitor.

Lofty Belhassine, who is used to challenges and who also created Air Liberté, launched his own concept of online travel agency and dedicated channel television in November 1999:

Two years later, is being broadcast in Europe in as many as 33 million houses through Astra and Eutelsat but also through the cable via Noos in France.

In 2001, the company lost €8 million for an income worth €14.7 million, made up €2.2 million resulting from advertising income and €12.5 million from travel bookings.

Last March, when I interviewed Lofty Belhassine, manager, he told me that he expects his company to reach break-even point by the second quarter of 2002.

Nevertheless, these optimistic forecasts will imply a huge increase of its income and a strong decrease of its expenses, implying that his customers will have to change the way they behave radically when making a purchase.

Indeed, in 2001, the percentage of transactions that were made directly on Internet web site was 15% (for 85% through its call centre). Lofty Belhassine expects these online transactions to reach 25% in 2002.

Such an increase of the online transactions will nevertheless imply a strong improvement of the site's current abilities in terms of eShopability.

In order to become profitable in 2002, Lofty Belhassine expects a 227% increase of its advertising revenues (€5 million when it was only €2.2 million in 2001) and a 520% increase of its travel transactions (€65 million are expected in 2002 when they only accounted for €12.5 million in 2001).

There is no doubt that such an expected growth might well seem rather optimistic. But Lofty Belhassine seemed very sure of himself and we will soon know whether or not he will be able to honour his bet.

It proves very difficult to find out whether or not manager is too optimistic since its customers are so spread out geographically.

Because of its European dimension, the site comes in a variety of forms for French, Belgian, German, people from Luxembourg, Greek and Dutch people.

There is no doubt that these TV and Internet penetration rates, more or less strong according to these different countries, but also of the way the Internet population develops in these very countries, are just as many factors that explain why it proves so difficult to foresee the growth of Lofty Belhassine's company.

Nevertheless, Mr Belhassine told me some interesting facts about the way the current turnover is distributed geographically: the first country that contributes to LibertyTV's growth is Germany as it alone accounts for as much as 35% of the travel agency's turnover.Just after Germany, we have Holland and Belgium that account for just under 30% of turnover. As for France, it only accounts for 15% of its total sales.

Source : LybertyTV


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