You’d be hard pressed to find a better win-win-win relationship between consumers, an industry and technology than the travel market post-Internet adoption.

Of course, these gains could only be accomplished after the players got their strategy right.

There can be no doubt that the Internet is the technological backbone of the travel industry. According to Claria Corporation’s Feedback Research Division:

§         88 percent of consumers purchased or plan to purchase an airline ticket online, up from 50 percent in 2004.

§         Online purchases of hotel accommodations also increased in this year to 52 percent, up from 40 percent in 2004.

A quick examination suggests that the Internet and travel are nearly as good a combination as a pina colada and a palm tree:

• Tourism is an information intensive industry. The Internet provides technology that enables constant up-dating of information based on customer input, changes in product availability and price changes.
• Tourists cannot really assess the quality of the products or services they are buying until they arrive at their destination. Trust and proof statements are critical for delivering the comfort level required to commit an often significant percentage of household income to a purchase. The Internet delivers technology that makes it easy to compare choices, delivers immediate confirmation and documentation of reservations and builds a relationship between the buyer and seller.
• Tourists are strongly motivated by price. The Internet enables electronic order processing that dramatically reduces sales costs; automation scales back skilled labour costs; it disintermediates several layers of middle man; and it reduces the cost of physical space.

The Financial Times provides a number of examples of how the players have all won as a result:

• Consumers: Not only has informed choice risen steeply and costs declined, holiday travelers are enjoying tremendous flexibility: holidaymakers used to be restricted to 7- or 14-day holiday periods; now the average length of stay is 4.8 days.
• The industry: despite tremendous challenges, the U.S. Internet travel industry grew from US$5 billion in sales in 1999 to US$20 billion in 2003, a number that is still growing dramatically.

So what were the winning strategies?

• Rethinking the product offering. With consumers using the Internet to buy flights, accommodation and rental cares separately rather than in packages, tour operators responded by either diversifying into specialists holidays and upscale breaks, or creating sites that allowed customers to choose component parts.
• Creating an Internet-specific business model. Lastminute.com, Expedia and Travelocity buy travel products  and use the Internet to find buyers.
• Dramatically increasing efficiency. The winners have learned to process large numbers of orders and inquiries with less human intervention. Not only does this approach drive cost out of the system, it allows them to collect extensive customer data which they utilize to create a better product.