November 3, 2005 9:12 AM PST

Online travel keeps humming along

The online travel market is still going strong in the U.S., despite wider challenges such as higher fuel costs, a new study has shown.

The market is expected to hit $68 billion in 2005, a notable jump from the $57 billion recorded last year, JupiterResearch said in a study released Thursday. The growth is due to enhanced inventory, an increase in the number of passengers, and competitive prices on flights, cars, cruises and hotels, the market research firm said.

Jupiter expects that growth to continue over the next five years. By 2010, the online travel market will surge to $104 billion, making up 34 percent of all travel spending, the research firm said.

Supplier Web sites like Orbitz continue to grab most of the market, netting 56 percent of online travel revenue in 2005. Newer travel search engines such as SideStep and Kayak haven't been able to make much of a dent in the suppliers' market share, Jupiter said.

Overall, business travel dominates online sales. New booking tools are expected to boost the online business travel market to $31.5 billion by 2010, from $15.1 billion in 2005, Jupiter said.

"We are seeing strong increases in revenue across all segments of the online travel industry," Diane Clarkson, an analyst at Jupiter, said in a statement. "Higher fuel costs will remain a major challenge for the travel industry in the near future, as the industry struggles to compensate for additional costs while remaining price-competitive."

 

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