City Cruises

Published on Wednesday, November 17, 2010

A first: offline travel now growing faster than online

In 2010, offline travel distribution will grow faster than online for the first time since the rise of online travel, according to a new report, PhoCusWright's “US Online Travel Overview Tenth Edition.”

Another perhaps surprising finding: Corporate travel led the US travel market's 2009 plummet and is now fueling its recovery, in a dramatic swing that is temporarily disrupting the overall market's shift to online channels, says the company.

PhoCusWright also projects a restrained recovery through 2011, varying by travel segment and distribution channel.

The U.S. online leisure/unmanaged business travel market will grow by eight percent in 2010 while the traditional travel agency/travel management company (TMC) channel, powered by the business travel rebound, will post a 15 percent gain.

"Corporate travel's wild ride over the past two years has caused an unusual shift in trend, with online channels growing more slowly than the total US travel market for the first time," said Douglas Quinby, PhoCusWright senior director of research.

The phenomenon reflects the peculiar dynamics of this recession, but the reversal will be short lived. "In 2011, the long-term arc of continued shift from offline to online channels will resume," Quinby said.

Following an historic 15 percent annual decline in 2009, the US travel market in 2010 will regain over half of what it lost, jumping 10 percent to surpass US$255 billion.

“Yet the recovery will be uneven and slow, with 2010 travel sales falling short of 2006 levels. The total market will continue to rise annually over the next two years, finally reaching record highs again in 2012,” the report said.

Online leisure and unmanaged business travel fared better than the overall travel market in 2009, falling just 5 percent, as travelers sought bargains online. Led by online travel agencies, 2010 gains will push online travel ahead of record 2008 levels. Yet online leisure/unmanaged business penetration of the total travel market will be stagnant at 38 percent in 2010.

PhoCusWright's U.S. Online Travel Overview Tenth Edition provides market sizing and forecasting through 2012 for all major travel segments (airlines, hotels, car rental, vacation packaging, cruise and rail) and key online and offline distribution channels (online travel agencies, supplier websites, and traditional travel agencies/offline supplier direct).

By David Wilkening

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