Wednesday, March 08, 2006

Online travel sites feeling pressure

Merrill Lynch analyst Justin Post maintained a "neutral" outlook on the online travel industry after February traffic data showed supplier-direct travel sites taking share from online travel agency sites.

"Traffic data for February [indicate] that travel suppliers continue to capture increasing user attention, which could continue to pressure online travel industry growth," wrote the analyst in a recent research note.

Online travel agent traffic was down 14% year-over-year in February. Traffic to Expedia and Orbitz was down 21% and 17% year-over-year, respectively. Traffic for Travelocity declined 7%, the least in the group.

On the same time, traffic growth to supplier sites was up 3% year-over-year in February, with leading hotel sites - like Marriott International, Hilton Hotels and Starwood Hotels and Resorts - up roughly 13%, and leading air supplier sites - such as Southwest Airlines, Delta, AMR and United - up 4%, slightly outpacing the industry.

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