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Online Travel Business Recovering


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Chicago, Ill Dec. 27, 2001 (AP by Dave Carpenter)–Jolted by the Sept. 11 attacks, online travel agency Orbitz evacuated its headquarters near the Sears Tower that morning and watched its business plummet for weeks afterward. But Orbitz and its competitors have now regained altitude–and then some.

Thanks to bargain-hunting leisure travelers and the growing use of Internet sites for more than just airplane tickets, the Web travel business is strong, and the outlook is brighter than that of the industry as a whole.

“All of a sudden consumers are realizing this isn’t just something for the most technologically advanced. It’s for everybody,” said Henry Harteveldt, a travel analyst at Forrester Research.

While overall industry revenue is expected to finish the year down 20 percent from last year, online leisure travel sales will wind up at a healthy $14.2 billion, according to Forrester.

That is scaled back from the $16.7 billion forecast before the weakened economy and the terrorist attacks took their toll, but still 16 percent higher than a year ago.

Nearly 3 million more U.S. households, or 17.8 million in all, bought travel online this year.

Customers have been flocking to online travel sites of late largely because the price is right.

Six-month-old Orbitz is the newcomer among the five busiest travel sites–behind Travelocity and Expedia and ahead of deep discounters Hotwire and Priceline. Backed by five major U.S. airlines, Orbitz saw a post-Sept. 11 falloff in travel before recovering by early November to a new sales high of 30,000 to 60,000 tickets a day. Its goal is to turn a profit by mid-2002.

“Since Sept. 11, people have been really hungry for a deal. And they come to the Internet to get it,” said Jeffrey Katz, who was chief executive at Swissair and an executive with American Airlines before becoming Orbitz’s president and CEO. “In my 20 years in the airline business, I’ve never seen as many deals for travel as there are now.”

More than prices have changed since Sept. 11. Internet travel sites are also providing more information about weather, security requirements and potential snags. The airlines’ own Web sites, where bookings have also risen dramatically lately, are doing the same thing.

Orbitz was were ready for the trend before Sept. 11. From an electronic command center in a downtown Chicago high-rise, a former air traffic controller and other specialists have been pumping out thousands of daily flight alerts and other information for Orbitz customers.

Some of Orbitz’s strength may be attributable to intensive advertising. According to Jupiter Media Matrix, Orbitz accounted for 44 percent of all online travel advertising the week after Thanksgiving; Internet surfers are seeing Orbitz’s ubiquitous pop-up windows.

Other travel sites have been having equally happy holidays. Analysts say customers have increasingly been going to Web agencies to look not just for cheap air fares but for good hotel rates, vacation homes or ski packages.

Copyright © 2000 The Associated Press