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Online Travel Agencies Report Increase in Demand for Leisure Travel

August 10, 2009 By: George Dooley, Alexia Dellner

Recent reports from online travel agencies find a steady increase in the demand for leisure travel. Numerous agencies are seeing profit increases, attributing their successes to travel bargains offered by hotels and airlines to counteract the impact of the recession. Inc (PCLN.O) reports that quarterly profit rose 35 percent, exceeding their expectations. Priceline second-quarter net profit was $67 million, or $1.38 per share, compared with $49.8 million, or $1.00 per share, a year earlier. Priceline attributed its profit increase, and that of other online travel agencies such as can Expedia and Orbitz, to the availability of compelling discounts during the summer peak season.

The future looks bright, with agencies expecting to see a full rebound in demand for leisure travel. "As consumer confidence returns, we expect to see a quick but dramatic uptick in growth for online travel agencies as consumers lengthen their booking window and some incremental demand returns," said Morningstar analyst Warren Miller. Priceline said it expects the value of its travel bookings to increase in the third quarter by 20 percent to 26 percent.

Tripology is not an online agency, yet it uses an online platform to bring agents and consumers together. The online travel referral service reports in its newly published July 2009 Trend Report that the average budget per trip submitted by consumers this spring and summer increased compared to the end of 2008. In fact, the average minimum budget per trip was higher in June 2009 than in any other month since July 2008. Additionally, the average trip budget nearly doubled in amount from May to June 2009— from approximately $3,100 to just under $6,000 per trip.

“Our trend report indicates that consumers are still looking to travel and even willing to spend a little more on their trips and vacations, but they are also seeking the help of live experts and knowledgeable travel specialists to help plan their trips and to weed through all the added value offerings and the incredible travel deals currently available,” John T. Peters, president and CEO of Tripology said.

The Tripology report also reveals that the top five requested cities are Las Vegas, Orlando, Cancun, Honolulu and London. Additionally, all four of Tripology's top requested regions - Western Europe, Caribbean, Asia and Africa - show increased demand in June 2009 versus previous months, with the Caribbean showing the greatest increase.

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