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Why Rely on Airline Sites?
Kirby's Korner · July 2, 1999

Last year, a well regarded study from online analyst Jupiter Communications concluded that travel suppliers -- the airlines, hotels, car rental companies, and so forth -- are handling much more than 60 percent of all reservations sold through the Internet.

Online travel agencies fell all over themselves to accommodate this reality. Microsoft's MSN Expedia in particular said it adjusted its business plan to take into account the fact that it would process a decreasing percentage of all online bookings.

Studies of online commerce are like the weather in coastal regions. If you don't like the current forecast, stick around; a change is bound to be just over the horizon. This week, online travel industry expert PhoCusWright released results concluding that travel suppliers handled 46 percent of all travel sold through the Internet in 1998. Online agencies and other intermediaries processed the other 54 percent.

This undercuts by about a third the amount of direct sales Jupiter claimed. I don't care who's right. I'm trying to figure out why either conclusion is correct. And I'd like to hear from faithful readers why so many people are going to the airlines' and hotels' Web sites to make reservations.

Off the Internet, only 20 percent of travelers book directly with airlines. The others use travel agents. (The figure is nearly reversed for hotels: about 80 percent of travelers will call hotel companies directly to book rooms.) The Internet doesn't change that figure much yet.

We're still processing only about two percent of all reservations through the Web and other online services. Why is the ratio so drastically different in the online and "real" worlds? Why aren't more people who book online using MSN Expedia, Preview Travel, Travelocity.com, and the like rather than American Airlines or US Airways?

Well, most airlines and some hotels offer deeply discounted weekend fares if you can travel on short notice to destinations the airlines choose. Many suppliers, particularly Delta Air Lines, offer bonus frequent traveler points if you book at their Web sites.

More and more suppliers are offering rates available only through their Web sites. Delta this week ended a promotion for 10 percent off flights to and from Florida; US Airways just started an identical deal.

There's also the issue of name recognition. American Airlines is better known among new and veteran Web users alike than Travelocity, which is one of the two most successful online agencies and is owned by the same company that owns American. None of this quite explains to me why airlines and hotels are getting so much of the online travel dollar.

If travelers want to do any comparison shopping -- for price, departure times, or airports -- it's awkward to go from airline Web site to airline Web site. United Airlines is the only major carrier to sell tickets on its Web site for other airlines.

More important than comparison shopping, though, is a matter of trust. I simply don't trust any company selling its own tickets to give me the best deal available, no matter how "deal" is defined. I'd much rather rely on an intermediary, whether I have to go to an online agency or pick up the phone and talk to a real person.

What has your experience been?

David Kirby is the editor of the Interactive Travel Report. You can reach him at dbkirby@pressroom.com.