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October 30, 1997

Ever wonder how all those studies about interactive travel come to such vastly different conclusions?

Take a look at research published by the likes of Plog Research Inc., Forrester Research Inc. and Jupiter Communications, and you can’t help but wonder if these folks are reading from the same book. Estimates about the size of the interactive travel industry run from tiny to titanic.

Conservative forecasts peg the size of the business in the hundreds of millions of dollars per year. The optimists, meanwhile, are talking billions of dollars by the turn of the century.

Millions. Billions. Does it really matter?

As a matter of fact, it does. Depending on whose crystal ball you buy, you’re going to make certain decisions about your business. So listen carefully: each major market researchers’ methodology sets it apart from its competitors and, for the most part, explains the vastly different results.

Let’s start with Plog Research. Its 1997 Interactive Traveler Survey questioned only air travelers. Plog used a mail-in survey sent to 7,000 fliers; 3,058 usable responses were sent back, giving a 44 percent response rate.

“Our study is not meant to be representative of the overall online market,” vice president of eastern operations John Antonello said. “We focused on what we believed to be the most important segment, air travelers. Our conclusions reflect that.”

New York-based Jupiter Communications, by far the most optimistic of the lot, this year released a full-length research report about interactive travel called “Online Travel Market: Five Year Outlook.”

Here’s how Jupiter says it arrived at its conclusions: through “its own in-house proprietary research and database,” company reports, secondary sources such as trade and business publications, and having its researchers spend “considerable time navigating the Web and consumer online services, observing content areas in relation to one another.”

Asked what that meant, analyst Kate Doyle said, “The big difference between us and the others is that Jupiter focuses on the consumer market. For travel, we started by looking at what happened in 1996. Some companies gave sales, some gave estimates, and we looked at some booking estimates.” So Jupiter cast a wide net and used the information it pulled in.

Doyle is unapologetic about the predictions made by her researchers. “A lot of the press and clients have often accused us of inflating our figures. But in several instances our seemingly inflated numbers were on target,” she notes. “Our advertising figures were laughed at a few years ago, but they were just about on target.”

Forrester Research, meanwhile, came out with a study called “Leisure Travel on the Web,” which wasn’t as broad as Jupiter’s or as narrow as Plog’s. According to analyst Seema Williams, the Cambridge, MA, market researchers conducted interviews with 50 players in the interactive travel business, including travel agencies, car rental companies, hotels, and cruise lines. Also surveyed were true interactive travel companies such as City.Net and Travelocity.

“We took an overall view of all the different segments of the business,” she says. “We asked them questions about their Web activity such as ‘What kind of information are you offering online?’ and ‘How many visitors do you have to your site?’”

Williams attributes the differences in results between her survey and the others to “what we’re including and what we’re excluding.”

“Numbers and forecasts are really opinions put into quantitative form,” she adds. “Depending on what your opinions are, those numbers are different. But what happens is that you end up with reasonable consistency: the interactive travel industry is going to be in the billions [of dollars] by 2000.”

Don’t blame the different methodologies for all the confusion. Folks like me should share some of the blame. Journalists like to take pages of research and boil them down to a few figures, often oversimplifying a complex body of work. So while it may be true that the numbers in and of themselves leave many questions unanswered, the way they’re represented in the trade and consumer press doesn’t always help, either.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

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