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I booked it online
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Oct. 27, 1999 | As the Web turns consumers into virtual travel agents, it's becoming essential to learn how to negotiate the various travel sites and understand how they work. This is particularly true in booking hotels because of the vast number and variety of places to stay and companies that book them. Knowing what sites to use can save you time, money and a great deal of frustration. And in some cases, it may help you find a unique place to stay. The scope of booking online Paralleling other forms of e-commerce, the sale of hotel rooms online is expected to grow exponentially in the next few years. According to Forrester Research, gross sales of online hotel bookings registered $1.1 billion out of a total $70 billion booked worldwide in 1998. That figure is expected to more than double to $2.7 billion this year and increase to $10 billion in 2003. In a study of online travel sites released by Forrester Research in early July, Travelocity, Expedia and Preview Travel were rated the top three online agencies, in that order. These agencies have their own sites but are also used by several portals: Yahoo and Netscape use Travelocity, Excite and AOL have ties to Preview, and Expedia is owned by Microsoft. In early October, two of these big three -- Travelocity and Preview Travel -- announced their intention to merge. It's too early to know exactly what the effects of this merger, assuming it is approved by shareholders and government regulators, will be, but the new company, to be known as Travelocity.com, is expected to be the third largest e-commerce site after Amazon.com and eBay. With a projected membership of more than 17 million registered travelers, it will overtake Expedia.com as the largest online travel agency site. Equally important, the merged entity has signed a five-year contract with America Online that makes Travelocity.com the exclusive reservations engine for all AOL travel-related services on AOL.com, CompuServe, Digital City and Netscape. According to sources at Preview, the deal is expected to close by Feb. 1, 2000. Until that time, Travelocity and Preview will continue to operate as separate competing companies. The July study conducted by Forrester surveyed 10,000 online consumers to find out which sites they used when researching and booking travel. Scores were given to 34 sites based on the breadth of reach these sites achieved among those researching travel, the percentage of site visits converted to sales and the amount of money the travelers who visit a particular site spend on travel, both online and offline. According to analysts, only 10 to 15 percent of what these online sites book is hotels. The volume is still substantial, however. Out of $200.1 million in total gross bookings by Preview Travel last year, for example, $18 million was hotel rooms alone. How does it work? While the method of procuring and dealing with customers is different, the way these online travel agencies actually make their bookings is the same as traditional travel agents. They use databases called Central Reservation Systems, known in the travel industry as CRSs. These CRSs all operate in the same manner and include most major hotels around the world. The rates given are what are known as the rack rate or published rate, which is the full price of a room and the same rate charged by the hotels themselves. Virtually all online travel agencies use these CRSs. Travelocity, for example, is the consumer arm of Sabre, which is one of the main CRSs used by traditional travel agents. Travelocity lists more than 40,000 hotels worldwide. This means that from your computer, you can book exactly the same hotels as the travel agent down the street. In addition to these databases, online travel sites also often have links to discount brokers for better deals on certain hotels. To broaden their appeal, the sites also offer guidebook-type articles on countries and cities, often supplied by guidebook publishers, so that travelers can research their choices before they make their bookings. For example, Travelocity includes basic information supplied by Lonely Planet and Fodors. Yahoo uses content supplied by Lonely Planet and Rough Guides. Expedia produces its own content, which includes an online news section with the latest travel bargains, news and trends and a section called Best Places, with articles about destinations around the world. There are also links to citysearch.com's Sidewalk, which includes city guides -- what to see, where to shop, best restaurants and entertainment schedules -- to about 70 U.S. cities, as well as Sydney and Melbourne. Preview Travel posts extensive write-ups on destinations and hotels supplied by Fodors and includes a feature whereby users can take a look at a particular Fodor's hotel review and book that hotel on the spot. These reviews are Fodor's top picks and range from major well-known downtown hotels to tiny inns with just a few rooms.
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