Travel Sites Court Unmanaged Business Users
JULY 16, 2007. After revolutionizing U.S travel bookings, online agencies now have their eye on a lucrative, but elusive part of the business market.
The so-called unmanaged business travelers have become increasingly valuable to companies like Expedia Inc. and Orbitz Worldwide.
These are people who tend to make their hotel and travel reservations themselves, in contrast to managed travelers, whose companies handle this task for them or contract it out to a travel agency.
Online U.S. bookings, which account for more than half of the nation's total, are split almost evenly between business and leisure. Unmanaged business travel is a fast-growing market for the agencies and one worth fighting for in an industry that may be approaching its saturation point in the United States.
"They are certainly a sweet spot to target," said analyst Lorraine Sileo of travel research company PhocusWright.
Sileo said the market comprised entrepreneurs and employees of small businesses that do not generate enough bookings to command the negotiated rates of their managed corporate counterparts.
Travel is on the increase among this group, which is why it is moving online quickly and becoming so lucrative, she said.
According to PhocusWright data, the unmanaged business travel market -- both online and offline ---| will be worth $36.8 billion in 2008, up from $30.7 billion in 2005. It expects 82 percent of all unmanaged business bookings to be online in 2008, compared with 68 percent in 2005.
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