Travelers shop online to save time

Posted on June 10, 2005. Filed under: Uncategorized |

For someone who’s long advocated more of a focus by the online travel industry on value rather than price, this latest research published by PhoCusWright Survey: Travelers shop online to save time

is an indicator that customers will increasingly demand just that and expect more than only to find the cheapest price on a travel site. I assume this will especially be the case for the more involved purchasing of packaged vacations rather than shopping for single components.

This development is proof of basic marketing wisdom, which states that commodities are sold mainly, if not exclusively, on price (e.g. an airline seat, and certain chain hotel rooms) but the more aspirational the product or service the more complex it gets. Added value and branding gain in importance over pure price considerations. Other industries such as automotive face this marketing reality as well. After all, if all cars were only sold on price, we would all drive Yugos……

The challenge for online players will be how to make the online travel research and buying experience as pleasant and convenient as possible. Sites need to perform more complex tasks that require intelligence built right into them and simply pushing pre-packaged vacations based on the old offline brochure model won’t be producing the conversion rates needed. It will be interesting to observe how intermediaries as well as suppliers will solve the challenge to maintain profitable growth.

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