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Sunday, December 25, 2011

Airline websites flying high as OTAs lose ground

The dynamic between supplier websites and online travel agencies (OTAs) is shifting yet again. While OTAs outperformed supplier websites throughout the recession, the online pendulum is now swinging in the opposite direction, according to PhoCusWright's U.S. Online Travel Overview Eleventh Edition.

Fueled by the weak economy and deal-hungry consumers, OTAs were able to grab a larger piece of the online leisure/unmanaged business travel market in 2009: OTA share grew to 40% in 2009 from 38% the previous year. But the gain has proven to be short-lived. Supplier share will grow to 62% in 2011, reaching 63% by 2012.

Strong corporate demand, tight airline capacity and higher fares are fueling the gains of airline websites at the expense of OTAs. Airline sites will represent nearly three quarters of the online air market by 2013. While the supplier channel has long dominated online air distribution, added incentives such as ancillary services and the potential impact of Google-ITA's new Flight Search product are expected to further tip the balance.

PhoCusWright's U.S. Online Travel Overview Eleventh Edition is a comprehensive analysis of the U.S. travel industry, providing market sizing and growth forecasts through 2013. The report focuses on the U.S. online leisure/unmanaged business travel marketplace, highlighting marketing and distribution trends for all travel segments including air, hotel, car rental, vacation packaging, rail and cruise. It tracks distribution shifts among supplier websites and online travel agencies, as well as major offline channels. The report analyzes trends in market share, technological innovation and consumer behavior to provide a detailed overview of travel distribution in the U.S.
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