The Internet Travel Industry:

What Consumers Should Expect and Need to Know, and Options for a Better Marketplace (Abstract)

Abstract

The online travel market continues to evolve, creating both risks and opportunities for shoppers. Since Consumer Reports Travel Letter (CRTL) conducted its assessment of travel Web sites in October 2000, many changes, both good and bad, have occurred. While a wide variety of airline ticket-booking sites remain, the market itself has become more concentrated. The advent of online travel created new business models that altered the relationships among the key players. They became less interdependent. Instead of sharing customers, now they began to compete for them.

As a result, today's online travel market is highly competitive, but also reveals remnants of favoritism among providers and distributors, making consumer education critical. Research by CRTL beginning in 2000 showed disturbing evidence of bias in the way these sites presented fares to the consumer. Research in March and April of 2002 by CRTL and Consumer Reports WebWatch concludes that while the problems of bias have improved somewhat, issues remain that consumers need to know about.

The independent ticket-booking sites need to address basic disclosure issues — from describing how their technologies work, to clearly disclosing business deals they make with airlines that might affect the price of fares, or their position on a screen. The six largest integrated travel Web sites confirmed to CRTL that they receive various forms of compensation from airlines, despite the fact most U.S. carriers have recently eliminated the payment of base commissions to travel agencies.

Sites also should better separate airline and other advertising from screens of available fares, so the consumer is not manipulated into making a choice based on strategic placement of an ad. Fees should be more clearly disclosed, earlier in transactions — not at the end after a consumer has invested valuable time selecting a flight.