I booked it online

Is online travel booking really the way of the future? Jenn Shreve assesses the advantages of online travel services.


Jenn Shreve
January 31, 1998 1:00AM (UTC)

My entrance into the world of online booking was a hesitant one. It began with my looking up flight schedules and prices on the Internet, then grabbing for the phone to order out of fear my credit card numbers might be snatched up by some cyber thief. But as encryption devices proved themselves trustworthy, and time constraints made sitting on hold with a travel agent -- or worse, visiting an agent's office -- nearly impossible, I succumbed, booking a round-trip flight entirely online.

I was amazed by how easy it was. Since I knew where to go, I simply logged on to a reputable online agency, found the lowest fares area and plugged in various flight times and dates until I found the perfect combination of schedule and price. I carefully entered my credit card number and voil`, minutes later an e-ticket arrived in my in box. I never wondered if I'd gotten the best deal, because I was in control. No time was wasted sitting around on hold or waiting for my agent to get done helping another customer. And at the airport, instead of wasting away in a baggage check-in line the size of the Great Wall of China, I was escorted to an empty queue set aside for online customers. I was converted.

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I am not alone in making the switch to online travel agencies. Growth rates for the Internet booking industry have been astounding. According to Jupiter Communications, a leading new media research group, online travel revenues -- which include advertising on the sites as well as booking commissions -- grew from $276 million in 1996 to an estimated $827 million in 1997, an increase of more than 200 percent. Last year 13.8 million Americans used the Internet to research a trip and 6.3 million made reservations online, according to a November 1997 study by the Travel Industry Association of America.

"In '97, about 1 percent of air tickets were sold online, and that's probably a good proxy for the whole travel industry; we haven't looked in detail at other products," says Nicole Vanderbilt, director of digital commerce at Jupiter. Vanderbilt predicts that number will leap to 2.4 percent in '98.

According to Vanderbilt, the growth of online travel purchases is explained by three basic factors: "One is the general growth in the online audience; another is the growth in the percentage of people willing to book and pay for travel online; then the third would be a growing budget for those online travel buyers -- somebody who bought one ticket in '97 may buy two or more in '98."

Vanderbilt describes that last explanation as the "once you're in, you're in philosophy." Like me, it seems, once travelers have purchased a ticket online, they're unlikely to enter a streetside travel agency again.

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Why? What does the Internet offer that traditional agents can't provide?

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ONLINE TRAVEL AGENCIES ARE NEVER CLOSED

Ron Pernick, director of communications at Preview Travel, points out the most obvious reason to choose an online travel agent over a traditional one: 24-hour customer service, in the office, in your pajamas or at a cybercafe sipping beer.

"We're open 24 hours a day. I don't know when was the last time you tried to call your travel agent at even 7 o'clock in the evening. You can't get them," Pernick says.

"A nice portion of our sales happen outside traditional business hours. People are shopping at times when a traditional agent can't support them."

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Of course, an online travel agent doesn't help much when you're stranded at an airport at 3 a.m. with a canceled flight and nowhere to stay. Realizing this, almost all the online sites provide phone support for emergencies -- or if you simply need to hear the sound of another person's voice before handing over your credit card.

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THE TRAVELER IS IN CONTROL

What used to drive me bonkers about making travel arrangements was idling in an office while an agent jabbered away on the phone with various airlines and hotels. Resisting the urge to leap up and yank the phone out of the agent's hands, I'd shift in my seat, anxiously imagining what was being agreed upon about my vacation. Like sitting through turbulence on an airplane, I'd feel completely without control of the situation.

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Control is the main reason to book online, says Erik Blachford, product manager at Expedia.

"There's this sense of being in control of your own travel. That's pretty powerful for people," he explains. "Whether you need information or whether you're actually trying to dive down into itinerary planning, either way there's so many places to look for information, it's nuts. If we can pull it all together in one place for people, that's a real benefit for going online."

Online reservation sites run off of Computer Reservation Systems, computerized databases that travel agents use, which list availability and pricing for flights, hotels and car rentals. The information is provided by airlines, car rental companies and hotel organizations, which update the various systems continually. Whenever a ticket is bought using a specific CRS, the airline is informed; it then passes along the revised information to the other CRSs.

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What Web-based travel agents do is create an interface between a CRS and an Internet browser that makes sense to an average user. Online customers, then, are armed with all the information that's available to travel agents; in addition, online sites often complement that information with guidebook-type content such as descriptions of hotels and local attractions.

Does it matter which CRS an agent uses? Not usually, according to David Rush, director of training at Echols International, a school that trains travel agents. But it is important to know that the main CRSs are owned by airlines: Sabre, the company that owns the online travel site Travelocity, is in turn owned by the parent corporation of American Airlines; Apollo, the CRS that both Preview Travel and the Internet Travel Network use, is owned by United Airlines' parent company; Worldspan, the CRS of Expedia, is owned by Delta Air Lines; and a CRS called System One is owned by Continental Airlines. Although recent federal regulations prohibit CRSs from favoring one airline over another, if there are several similar fares, CRSs still display their airline's listings first, according to Rush. Also, he says, travel agents tend to choose the CRS that is based closest to them. So a California travel agency is more likely to use Apollo because it is owned by San Francisco-based United Airlines.

HAVING ACCESS TO ALL YOUR OPTIONS
CAN ALSO LEAD TO MAJOR SAVINGS

"You have better information," says Lois Shore, vice president of marketing at the Internet Travel Network ( which provides the reservations system for Salon Wanderlust Marketplace). "I have been a very frequent business traveler for about the last 15 years, and I never had a travel agent say to me, 'If you leave an hour earlier, or if you leave an hour later and come home at 8 o'clock instead of 7 o'clock, your ticket will be $500 less.' I had no idea there was prime-time flying until I started booking online, and it became so clear to me."

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(Of course, some travel agents will do the extra work required to find this information and will pass it on to their customers. But again, it's a question of control: Do you want to rely on a travel agent who may or may not research these options, or do you want to do the research yourself?)

Travel Weekly reported in December that employees of Texas Instruments saved an average of 15 percent on their travel expenditures after switching to online booking through a corporate booking program offered through ITN.

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LOWER FARES ARE EASIER TO FIND

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One of the biggest misconceptions about online travel is that the prices listed on the Web are lower than those provided by travel agents. In fact, all travel agents -- digital and human -- use the same databases. What's different is that with online agents, lower fares can be automatically brought to your attention, because their computers scour the CRS lists for the lowest fares possible and then present their findings in easy-to-access fare-mail or fare-ticker form.

These formats vary from site to site, but there are two basic methods of conveying low-fare information: e-mail or on the Web site itself. All major online agencies provide a low-fare area on their site, where you can scan for the lowest fares to your destination of choice. Through Expedia, ITN and Travelocity, you can sign up for fare-mail, with similar listings, to be sent to you daily or weekly. ITN provides Netscape users with a Java ticker that continues to list low prices onto a pop-up window even after you leave the site. All these tools are useful for comparative shopping.

In addition, Web sites occasionally offer special promotions that actually do offer lower prices than anything your local travel agent can provide. For example, I fly to Seattle frequently on Alaska Airlines. Alaska's site lists weekly Web specials. You are restricted to certain times and departure/arrival points, but if you check back often, you can score a round-trip ticket for up to half the price you'd pay regularly. Such deals are offered only online -- sometimes by the airlines themselves on their individual sites, and sometimes by a service site in partnership with an airline.

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In fact, encouraged by growing online sales and the simplicity of paperless ticketing, airlines are increasingly offering a variety of Web-only specials for customers of Internet agencies.

"[ITN] did a promotion where if you booked an American Airlines ticket, you got a virtual certificate for a second ticket at 50 percent off," says Shore. "It was an industry first because there was no paper involved: Use this name and use this number, access this special site and you actually do your redemption online."

Travelocity ran a similar promotion last November with TWA. Purchasers of an e-ticket received $75 off toward a ticket to anywhere in the U.S., San Juan or Toronto.

In the case of such Web specials, it is possible to get a lower price than you could at a traditional agency. On the other hand, traditional ticketing outlets offer their own special deals, such as newspaper coupons, storefront specials and courier flights.

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ONLINE SITES ARE FEE FREE

Travel agents, squeezed by cuts in airline commissions, are increasingly charging customers for transactions. According to a report in the Jan. 11 San Francisco Examiner travel section, such fees are running between $10 and $40. So far, online sites aren't following suit.

Online sites do have another problem to contend with, however. Every time a user looks up a fare online, the CRS makes note of it. If too many "looks" occur without a decent ratio of purchases taking place, CRSs start charging per look. Because many visitors to online travel sites browse for fun and don't buy, these charges can end up costing agencies big money.

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"There's a CRS fee associated with every look that a consumer does, and that fee varies according to the deal the site has cut with its particular CRS. But that's something the sites have to be aware of," says Vanderbilt. "They have to make sure they don't get too many false [hits] in order to stay in the good graces of the airlines."

Despite this, Vanderbilt says, it's unlikely online agencies will pass on these costs to their users. "I think it's going to be tough. The first site that does it is going to be taking a big leap of faith that others will follow. But I think that -- particularly because the Internet is a place where comparison shopping is so easy, and it's a place where people are looking for good deals -- those fees might be a very significant disadvantage to any site that would take the plunge."

The other logical action for online agents is to restrict user browsing. For example, after spending 15 or so minutes clicking around Travelocity's booking area, I was booted off, although that's rare, according to Dawn Caesar, public relations manager for Travelocity.

"Travelocity allows members to browse without restriction. If there is a special promotion or fare available that pushes traffic levels to an extremely high level, Travelocity does limit access to Travelocity members," says Caesar.

Expedia will warn users who spend too much time shopping without buying, but the user has to look more than 200 times in a day to elicit such a response.

Access to ITN and Preview Travel is unlimited. "We believe that online shopping should allow shoppers to search for as many flights as they like. We think it would be a mistake to kick people off," says Preview's Pernick.

If online sites do eventually decide to restrict user browsing, comparative shoppers simply should have a good idea of what they're looking for before logging on. It still beats a $40 service charge.


Jenn Shreve

Jenn Shreve writes about media, technology and culture for Salon, Wired, the Industry Standard, the San Francisco Examiner and elsewhere. She lives in Oakland, Calif.

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