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Lowering Resistance to Internet Travel Purchases

By Richard Wiggins

he online travel agencies claim to have a problem: too many people casually surf their travel sites without actually purchasing a ticket online. Expedia and Travelocity say the problem is that travel agencies must pay per-search fees as would-be travellers probe the real-time fare quotes database. Unfortunately, those fees aren’t reflected back to the consumer as they search, and they’re not recovered by the agency unless a ticket is actually issued.

My first reaction is to say "Cry me a river." My guess is that relatively few people casually search the database without eventually buying a ticket through one medium or another. What may be going on here is a fascinating form of "remediation." Direct sales over the Internet, a form of "disintermediation," were supposed to eliminate the requirement for consumers to use human travel agents. In its extreme form, customers might never call a human representative either at a travel agency or an airline. Staffing those 800 numbers is expensive, so online sales could greatly enhance profits. Thus, airlines and online agencies want customers to stop using traditional agencies for routine travel purchases. Indeed, airlines have lowered the fees they pay travel agencies, in part because they know customers are moving to online purchases that don’t require local agents.

Airlines and online agencies may bemoan the customer who surfs without buying immediately, but most of the time when someone searches travel options, they end up buying a ticket somewhere. It may be that travellers, suspicious about doing transactions over the Internet, do their price research online, and then they contact their local travel agent or call the 800 number. Customers may simply feel more comfortable dealing with a human (even over the phone) to make a fairly big-ticket purchase.

Although I claim consumers are too cautious about making credit card purchases over the Internet , it’s quite possible their reluctance to commit purchases online isn’t entirely irrational. Consider one traveller’s horror story with the Travelocity service. It seems their electronic system revoked a customer’s discount ticket purchase, and he was unable to re-purchase the ticket.

As it happens, I’ve got my own cautionary tale. I booked a flight using Northwest’s online service last autumn, and was sent e-mail with a special secret decoder ring number to use, and an 800 number to call. Supposedly the package would allow me to book a future flight on Northwest, and get a free companion ticket. A few weeks ago, I called the number and made the purchase. Several days later, I noticed my credit card balance was a few hundred dollars heavier than expected.

Some checking revealed that Northwest had charged me twice instead of giving me the two-for-one deal! A few phone calls yielded a promise to "credit your account within a couple of days." Yesterday I was told "that agent erred when he said your credit would come in two days. It takes 10 days or two weeks." She was unable to explain to me why Northwest can issue an erroneous charge instantly, but it takes weeks to remove it. (Gee, now I'm having second thoughts about my Internet World article that named Northwest "the best airline web site"!)

Now, I don’t believe for a minute that Northwest Airlines deliberately charged me twice, and I doubt that Travelocity deliberately ripped off their customer. But if enough tales like this enter would-be buyers’ awareness, it’s going to be even harder to get them out of the mode of window-shop-online, buy-the-old-fashioned way.

Here are some suggestions for the industry to consider as they make their customers’ flights through cyberspace purchasing more comfortable.