Web travel services report drop in online traffic
CHICAGO — Not only are Americans flying less as the economy tanks, they’re spending less time scouting the Internet for travel deals, creating an unprecedented drop in traffic for online travel agencies such as Chicago-based Orbitz Worldwide Inc.
As days shorten and the air chills, consumers typically start to plan winter getaways, making October one of the busiest months of the year for Internet travel sites, analysts said.
Not this year. As consumer confidence reached historic lows in October, the volume of visitors to Web travel portals declined 14 percent, year over year, to 38.2 million, according to ComScore Inc. Web traffic fell for nearly every major airline site.
Hardest hit were the three online powerhouses that have dominated bookings for much of this decade. Web traffic at Expedia Inc. sites plunged 25 percent, to 18.2 million visitors, while Travelocity.com LP and Orbitz saw 16 percent and 23 percent drops, respectively.
The falloff in traffic was unparalleled for the three online agencies, which grew by leaps and bounds during the economic slowdown that followed the Sept. 11 attacks as many consumers turned for the first time to the Internet to unearth bargains.
Anticipating tougher times ahead, Orbitz announced last month plans to reduce its U.S. work force by 10 percent.
"What’s happening in 2008 is a universal buckling down," said Sara Stevens, head of the travel and retail practices for Virginia-based ComScore, a market research firm that tracks Internet traffic. More than half of 1,000 consumers surveyed by ComScore in October planned to change their travel plans this holiday season online cash advance. Of those altering plans, 39 percent said they would opt to stay at home.
However, ComScore’s data did not present a complete picture of online travel activity because it measured only U.S. traffic and not overseas customers. For Expedia, "that’s leaving out a huge chunk," said Amanda Hoffman, spokeswoman for the Bellevue, Wash.-based company.
Hoffman wouldn’t disclose total traffic to Expedia’s sites. But she conceded that the Web travel giant, which controls about 50 percent of the online travel market, did see a falloff in October.
Bucking the trend were two websites that help budget-minded travelers drive better deals. Priceline.com Inc. saw a 24 percent jump in visitors in October, while traffic to Kayak.com surged 93 percent, to 7.9 million visitors.
Kayak, founded by members of the teams that helped start Orbitz, Expedia and Travelocity, has gained a following among younger, tech-savvy consumers for innovations that include a tool that allows groups of friends to plan their travel together.
Although Orbitz has predicted weak bookings into early next year, it should benefit eventually as consumers take advantage of cheaper airfares, as well as a new feature that promises refunds if prices drop after airline tickets have been purchased, said Brian Hoyt, a company spokesman. "It’s an incredible time to travel if you have discretionary income," he added.