• August 11, 2005
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Online Travel Reservations Are Missing the Boat

The travel industry is out of step with about half its customers when it comes to online reservations, according to a new study by Forrester Research. "Who Isn't Buying Travel Online?" reveals that 47 percent of leisure travelers in the United States don't make reservations online through the numerous Web self-service portals, and part of the blame rests with the industry's attempts to package online travel buying as a game for the young and mobile. Further findings in this survey of 32,680 U.S. online leisure travelers break down more specifically the differences between so-called bookers and nonbookers. The three largest determining factors appear to be education, income, and comfort around technology. While 52 percent of bookers are college graduates, only half as many nonbookers (26 percent) claim that distinction. The average household income of bookers is about 52 percent higher than that of nonbookers. Bookers are more likely to use a computer at work (77 percent versus 52), and 71 percent use a computer to make other online purchases, as opposed to just 41 percent of nonbookers. Two-thirds of bookers are "technology optimists" (calculated by Forrester from a list of attitudinal questions), although slightly more than half of nonbookers are also. The spread isn't quite as marked as other factors, but bookers tend to be slightly younger--median age 45.1 years versus 45.8; 26 percent of bookers are older than 55, while 28 percent of nonbookers are--and are also less likely to be women (50 percent versus 53 percent). Bookers also appear to lead busier lives. "If bookers live in New York, non-bookers live in Mayberry," the study says. "Just one in three nonbookers feels that she's always pressed for time; for bookers, it's 39 percent. Understandable, since fewer non-bookers than bookers work full time, more are retired, and a full 19 percent simply don't work at all." Bookers take an average of 4.3 leisure trips per year, as opposed to just 2.6 trips per year for non-bookers. "The more people travel, the more likely they are to buy online--tendency to travel more is the cause for increased booking through the Web," says Henry Harteveldt, vice president of Forrester's worldwide travel industry practice and the author of the report. This suggests that failure to capture that 47 percent of online business is costing the travel industry a lot of money in terms of higher expenses. But Harteveldt and his coauthors recommend that travel marketers cater to the nonbookers to win their business, rather than trying to get them to change their behavior. "Yes, booking travel online saves travel sellers money, but travel firms shouldn't expect non-bookers to magically wake up and change their perspective," Harteveldt writes. Instead, the study suggests the following best practices:
  • Make sure to sell the products nonbookers buy online. You can't buy what isn't sold, or audit the products that nonbookers buy. If you find that some of the products aren't sold on your Web site, examine how you can offer them. And if you can't sell them, facilitate the sale by employing supportive applications, such as offering the opportunity for the customer to schedule an appointment for a representative to call her at a designated day and time.
  • Invest in and communicate online customer service. Given that a critical mass of nonbookers research online but buy offline, online customer service can help to engage more Web travelers and contribute some savings. Online customer service extends beyond email to functionality, such as online check-in (common among airlines and now starting to be offered by cruise lines as well), click-to-chat (used by Starwood Hotels and Resorts), and scheduling a time for an agent to call the customer at a specific time (which Classic Custom Vacations provides). British Airways states that one in four people who use its U.K. Web site to check in for flights don't buy on it.
  • Show more than just hip, young road warriors using their site. Review how you message your Web site, and strike a balance between appealing to titanium-level elite members and the rest of your customers. Consider showing an older traveler using the Web site to buy her annual trip home to see her grandchildren, all by herself, and then proudly telling her grandkids about it.
  • Accept that not every Web traveler will buy online. No matter how hard you try, how many bonus miles you toss into the ring, or how much you spend on your site's design, a certain portion of online travelers will simply never become bookers. There is no conversion therapy that will change some travelers' attitudes. Accept that, and move on. Related articles: Customer Service Increases in Travel and Hospitality Make Mine Online:Consumers prefer the convenience and availability of the online banking channel to traditional banking. Online Travel Agencies Surpass Airline Web Sites
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