July 11, 2006

Launched July 9, Yahoo's new Trip Planner Portal doesn't sell hotel rooms or plane tickets directly. Instead, it integrates PPC (Pay-per-Click) ads that charge a fee to companies like Expedia, Sabre Holding, Travelocity and Orbitz when a user leaves Yahoo's travel site.

Yahoo has also inked a sponsorship deal for its Trip Planner site with MasterCard.

Yahoo wishes to bring in 'travel' surfers to its portal with the help of user-generated content, this time in the form of 'travelogues' and photographs. “I don't know about any premium brand being associated with a 100 percent user-generated content product,” says Jasper Malcolmson, director of Yahoo Travel. “Advertisers tend to feel uncomfortable with user-generated content because it is highly unpredictable.”

While Yahoo's new travel site already generates lots of traffic, Yahoo Maps and Yahoo Travel, combined ranks number two in traffic market share for travel sites last month, according to Hitwise. Malcolmson thinks Trip Planner will help Yahoo grow its traffic and ad revenue, in light of a maturing travel market.

While total online travel sales in the US will reach over $77 billion this year, according to market research firm eMarketer, last year's growth was a healthier 24 percent. Travel's slowing growth looks particularly anemic next to yearly growth forecasts for the online retail industry, which is also slowing but not as much.

Online travel agencies Expedia and Orbitz are Yahoo's main buyers of PPC travel ads and now face another potential disruption. Consumers have begun to shop for tickets and hotels directly from the supplier because of small discounts. Websites like Southwest Airlines and others like Priceline.com and various branded supplier sites accounted for 57 percent of online travel dollars last year.

According to ComScore Media Metrix, branded-site market share is especially high in the airline ticket and hotel segments.

Yahoo's Malcolmson says the inevitable slowing of growth in the online travel sector, especially among its online travel agency advertisers can mean good news for Yahoo. “Their growth might be slowing, but because it is, those sites are as hungry as ever to acquire traffic from us, if not more so,” he says.

Source: IT World Canada