The volume of US online travel bookings is growing despite a dip in the number of people coming online to book, according to a senior Expedia executive.
While a recent Forrester Research study claimed a significant decrease in the number of people booking travel online – 9% drop since 2005 – Expedia North America president Paul Brown said bookings were growing.
“There are less people but the number of purchases continues to grow. The people that are online are buying a lot more which is natural when you see a market mature. Those people are spending a greater share of their total dollars online.”
Brown added that the internet was reaching penetration level in the US but that the Forrester survey only tracked figures over a year.
“Let’s wait a few more years. We have seen transactions growing and other online players have said they are growing too.”
Expedia is actively targeting its higher spend customers in the US to instill online loyalty. The online giant has just released its Elite Plus affinity programme giving repeat customers preferential treatment such as advance notice of promotions, no booking cancellation fees and friends and family discounts.
Brown said: “The travel industry does this more than others because it is very concentrated and very few customers drive a great amount of visits. We want to differentiate more and more to our highest value customers.”
He added that the Elite Plus scheme and the recently launched Citibank loyalty programme were the sorts of concepts that could be transferred to other expedia sites and brands globally.
Brown, who is also president Expedia Inc Partner Services Group, said the schemes had been launched first in the US because of the company’s scale and length of time there.
“In Europe we’re still in major growth mode,” he added.
He was speaking as Expedia announced a global multi-year deal with Inter-Continental Hotels Group giving consumers access to more than 3,700 hotels across all brands.
By the end of the year Hotwire and Expedia Corporate Travel will offer the hotels with the remaining expedia sites and hotels.com sites offering the inventory in 2008.
The deal is also the test bed for Expedia’s ‘hybrid media’ model putting commercial terms in place around the number of transactions the online player provides to IHG as well as the general exposure the group gets.
“The deal recognizes those two sources of value and puts economic terms round them.”
The pricing model will be expanded to core large global partners who already invest significantly in online travel and Brown said the company hoped to attract some of that online spend to switch to Expedia.