Online Car Rentals, Hotel Reservations Lift Travel Spending

By David Lewis

Online leisure travel spending is on the upswing, despite a slowdown in airline ticket purchases following the Sept. 11 attacks.

Studies by Forrester Research indicate that 2001 online leisure travel sales will total $14.2 billion, down from the research firm's earlier prediction of $16.7 billion, but still 16 percent higher than in 2000.

"It's important to note that Web spending will be up in 2001, and shopping for travel remains the No. 1 category overall," noted Forrester Research analyst Henry Harteveldt, who said that 62 percent of U.S. consumers today have access to the Internet, a number expected to expand to 68 percent in 2002.

"The travel industry probably is doing the best job of serving customers, creating product discounts and healthy competition on the Web, and consumers love it," Harteveldt said. "One thing is very clear: there is no crisis of consumer confidence in the Web; the biggest issue is the economy."

Actual online purchases--as opposed to projections--of airline tickets, car rentals and hotel reservations, increased to $12.6 billion through Nov. 30, a 10.2 percent rise over the same period in 2000, Harteveldt said.

While online airline spending fell short of forecasts, car rentals and hotel reservations were "substantially higher" than originally forecast, Harteveldt said. Through Nov. 30, online car rentals and hotel reservations tallied $3.9 billion in sales, compared with an earlier forecast of $2.7 billion. At the same time, Forrester estimated online airline ticket leisure travel sales through Nov. 30 to be $7 billion, far less than the $9.1 billion it had projected.