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Point. Click. Book. Online Hotel Bookings Soar as Worldwide Travel Begins to Recover
By Jerry W. Jackson, The Orlando Sentinel, Fla.
Knight Ridder/Tribune Business News 

May 20, 2003 - Point. Click. Book. 

Reserving hotel rooms online is taking off, boosted by growing computer use and consumers' increasingly sophisticated search for discount deals. 

One sign that the travel market is rebounding and Internet booking is part of the boost: Marriott International Inc. set a single day record last week for its online hotel reservation system. 

"It's the first time we've broken through 20,000," in hotel rooms booked online in a single day, said Marriott International spokesman John Wolf. The rooms represent about $5 million in gross sales, up from the record of about $4.8 million when just under 19,000 room-nights were booked one day earlier in the month. 

Marriott International's online sales topped $1 billion last year, a nearly seven-fold increase in two years. 

Industry experts say that while rooms reserved online still represent less than 10 percent of the total sold nationwide, the sector's growth has been brisk in recent years and shows no sign of slowing. 

"It's growing rapidly," said Michael Sturman, an associate professor at Cornell University's School of Hotel Administration. "Even if someone's not comfortable clicking to book a room, they are going to the Web sites to collect information, and to look for deals." 

By some estimates, more than half of all U.S. households now conduct Internet searches for travel. Those who are just using the computer as a research tool, such as finding directions to a hotel, most likely will use it for reservations once they become more comfortable with the process, Sturman said. 

Because of online discounts, the growth of Internet booking is adding to pressure on hotel profits, Sturman said, but in time bargain hunters will be supplanted by everyday users who search for amenities and locations as much or more than low prices. 

Hotels.com, based in Dallas, is the nation's largest hotel-specific online seller of lodging and has seen its revenue surge from $62 million in 1998 to $945 million last year. David Litman, co-founder and chief executive officer, said Monday that the industry is still in its infancy, particularly outside the United States. 

"About 7 to 8 percent of hotel rooms are booked online. That means 92 percent are not. That's huge, tremendous potential for growth, and that's just in the U.S. Outside the U.S., it's even lower -- 2 percent [hotel] bookings in the United Kingdom, and less elsewhere." 

While hotel chains sell blocks of rooms to Hotels.com at a discount, and the online merchant adds a margin and then resells to the public, it doesn't mean that hotels are pushing down prices by selling through the discount marketer, Litman said. 

"Our own research shows 20 percent of our sales is incremental," Litman said, meaning that it adds to industry growth. "We do expand the overall market," Litman said, through independent advertising and attracting travelers who might not take a trip were it not for a discount deal. 

Hotels.com reported this month that Orlando was the No. 2 most popular destination in its worldwide online booking system for upcoming summer travel, trailing only Las Vegas. New York, New Orleans and San Francisco rounded out the top five, followed by Chicago, London, Honolulu, Reno and Paris. 

Orlando was the third most popular city in terms of hits to the Marriott.com Web site during the recent record-breaking sales day, although a company spokesman said a breakout by actual bookings was not available. Washington, D.C., and New York were leaders. 

-----To see more of The Orlando Sentinel -- including its homes, jobs, cars and other classified listings -- or to subscribe to the newspaper, go to http://www.OrlandoSentinel.com 

(c) 2003. Distributed by Knight Ridder/Tribune Business News. MAR, ROOM, 


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