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Web 3.0 & Online Travel: Synthesis

Posted on Tuesday, May 15th 2007

Today anyone with an Internet access and Credit card can just like that, plan for a week’s tour to South Africa or the Himalayas, thanks to the travel sites who offer trip planning at your finger-tips – flight booking, hotels and car rentals along with the reviews of the hotels, places of interest, and information on packaged deals. Clearly travel sites have been redefining the travel agency business. In 2005, over 79 million people in the US used the Internet to plan and book their travel, a function which previously involved travel agents much more actively.

Online travel is one of the largest e-commerce categories. According to Forrester Research the online travel industry is projected to grow from $63.6 billion in 2005 to $110.5 billion by 2008 in the US. JupiterResearch on the other hand estimates $128 billion to be spent on online travel in the US in 2011. Jupiter expects 38% of all travel revenues to be made online by 2011. Over the last few weeks, we have analyzed the Travel sites based on the Web 3.0 framework.

The online travel industry is expected to continue its strong growth and this is one of the main reasons for the ongoing VC and entrepreneurial interest in this category. In March 2007 Silver Lake and TPG acquired Sabre Holdings the owner of popular travel sites like Travelocity and LastMinute. The Blackstone Group along with its affiliates took over the Travelport business of Cendant Corporation for $4.3 billion in August 2006. Now, they’re trying to spin off Orbitz and take it public. Indian portal Sify entered the online travel business by acquiring Globe Travels.

We have been reviewing the online travel industry and have covered Yahoo! Travel, TripAdvisor, Travelocity, Orbitz, Expedia and Priceline and Lonely Planet from a Web 3.0 perspective.

The fact that online travel is a booming industry is clear from the growing number of travel sites, emergence of travel metasearch engines like Kayak and SideStep and the mushrooming of niche sites like Site59, Farecast, FlyerTalk, Mobissimo, etc. Identifying the opportunity Forbes has launched a special section for luxury travel and NYT has tied up with Expedia for its travel portal. We have not yet had a chance to review many of these other sites. Expect to see more in due course.

Context is, by and large, poorly understood by the sites, although nuances like flights, hotels, car rentals, cruises, vacation pacakges, maps, hotel and destination reviews, trip planning, sharing, etc. allow the consumers to plan their trips and make bookings. But few have created contexts like student travel, luxury travel, adventure travel, romantic travel, etc.

The Content offerings at many of the sites are good. Some, like Lonely Planet, come from Content roots, and do an especially good job. The CPM rates for these sites are similar and are in the range of $15 to $65 per thousand impressions. Considering the present boom in the online travel industry, ad rates are expected to rise in the coming years. As for leapfrog technology, my biggest wish-list item is large scale mashups from various parts of the web that can enrich and strengthen content that is already on the site.

The Community features on most of these sites lack punch and leaves a lot to be desired. Trip Advisor has the best community section but the rest really needs to improve the community features and incorporate photo and video sharing, forums and blogs on different aspects of traveling like trekking, backpackers, family, summer holiday, etc. LonelyPlanet, though has a good video sharing, review section, trip sharing, find a travel partner, forum, etc. According to Forrester peer reviews and blogs will have a decisive influence on travel behavior.

Online travel is the largest Commerce segment and most of the revenues come from the commissions earned on the bookings made through the sites. However, these sites are not taking full advantage of e-commerce and I believe there is an opportunity for these sites to retail a lot of travel related merchandise through their site. Yes, sites like, TripAdvisor, SideStep, etc. do merchandise travel gear in partnership with Cafepress but it is a pretty shoddy affair. LonelyPlanet in fact has done a much better job.

What I would like in the Vertical Search space is that the sites allow users to Search by Context and by this I mean, if I am a student I would like to search for hostels for backpackers like me, as well as other travelers to hang out with, by destination. The basic bread-and-butter vertical search is provided by Kayak and Sidestep, which we have reviewed.

Personalization is sub-par in most of these sites and they allow users to plan their trip, save and share their trip, photos, make posts and write reviews. They have email alerts for travel deals and newsletters. Endless possibilities exist, all the way to a Personal Concierge.

The online travel industry is projected to grow at 30% per annum in the next 5 years and this has resulted in a number of entrepreneurs, VC and PE funds entering the space. New entrants (Gusto, Mobissimo, in the online travel space and stand-alone travel operators like airlines and hotel companies are going to put pressure on the existing travel sites. However, those sites that are able to integrate the latest technology, differentiate their offerings, build their brand and provide consumers with the best Web 3.0 experience will have an edge in this highly commoditized industry, and that opportunity applies just as well to the major airline sites.

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Sramana – We would like to share with you our new online travel planning, booking, and management site We realize how time consuming travel preparations can be, so we built to help travelers. eTripBuilder offers thousands of restaurants and attractions you can add to your trip itinerary as well as online booking services for car rentals, airfare and hotels worldwide. Once you’ve finished planning your trip – you can print your customized travel itinerary or export it to your GPS device or calendaring software.

Matt Thomas

Matt Thomas Wednesday, May 23, 2007 at 5:00 PM PT

[…] and then spun out again. Expedia draws both transaction revenue and advertising revenue. The Online Travel vertical is a key segment to own for any player with ambitions of being a new media […]

Sramana Mitra on Strategy » Blog Archive » Microsoft's Online Strategy Thursday, May 31, 2007 at 6:27 AM PT

[…] Corp is absent from another category that we have been looking into: Online Travel, as it is absent from other lucrative online segments such as Jobs, Real Estate, etc. It would be […]

Sramana Mitra on Strategy » Blog Archive » News Corp's Vertical Posturing Tuesday, June 5, 2007 at 6:37 AM PT

[…] importantly, the M&A market for vertical online companies in Travel, Photo, Finance, Business, Real Estate, Jobs, etc. is heating up, and for Shutterfly, acquisition […]

Sramana Mitra on Strategy » Blog Archive » Shutterfly: Acquisition Target? Wednesday, June 6, 2007 at 6:24 AM PT

[…] In March 2007 Silver Lake and TPG acquired Sabre Holdings, owner of popular travel sites like Travel… […]

Sramana Mitra on Strategy » Blog Archive » Expedia: Buyback of Shares Tuesday, June 26, 2007 at 7:01 AM PT

[…] segment, but an out and out health site is what I found missing in the Company’s portfolio. Travel is another important category where the Company has no visible online presence except some classifieds on the various newspaper […]

Web 3.0 & News Corp (Part 2) - Sramana Mitra on Strategy Tuesday, September 11, 2007 at 5:55 AM PT

[…] Online Travel is one of the largest Web 3.0 categories and is growing at a rapid pace. It surprises me to see that Murdoch and his boys have not made acquisitions in this category yet but I have feeling that we will soon see some activity from the group in this space as it is too tempting to resist a market that is $78.8 billion and growing. I would not be surprised if it decides to acquire Expedia, Priceline, or Orbitz. The Company could even consider buying TripAdvisor from Expedia, as the later has been mulling a spinoff of TripAdvisor. TripAdvisor will cost News Corp. anything between $1.0 billion to $1.5 billion. TripAdvisor currently accounts for 6.7% of Expedia’s revenues. [For the record, I think its a very bad idea for Expedia to sell TripAdvisor, but if they do so anyway, then I don’t see why Murdoch’s boys should not buy.] […]

Web 3.0 & News Corp (Part 4) - Sramana Mitra on Strategy Thursday, September 13, 2007 at 6:58 AM PT

Hi Sramana – thought I will share some insights gained out of our experience of which is a vacation planning site for Indian audiences. We have found that the biggest gap in the Indian travel market is good quality of information. Indian consumers are deluged with a lot of recycled and highly-suspect brochureware masquerading as information. So, users have forced us to go down a ‘user content + editorial content’ route. This has taken us to a point where the offering is starting to resemble Lonely Planet more than anything else, due to the strong focus on quality of content. We see the next step as one of adding ‘tools’ that help users plan in more detail. This is still a nascent requirement; but as more users get used to the availability of good information, we expect ‘tools’ to get popular.

Hari Nair Friday, September 14, 2007 at 10:15 PM PT

Hi Hari,

Very interesting. I will look at your site, and then let’s talk to figure out how to cover the Indian Online Travel segment in some more detail.


Sramana Mitra Saturday, September 15, 2007 at 12:15 PM PT

Hey,, interesting,, but do you really know any travel tool ?? there is one Online Travel Tool , which is exclusively a travel tool (or software or Widget) named Tafri .. find @

It is having so many features,, that a real Web2.0 Travel Tool should be comprising of. ;))

Source :

Kuntal Shukla Wednesday, September 26, 2007 at 1:52 AM PT


Enabling consumers to search by context – we define it as helping travelers to find more relevant choices based on the kind of destination (e.g. warm weather beach…), what they would like to do (e.g. outdoor and active…), who they are traveling with (e.g. kids, pets…) is what our venture ( is focused on.

We believe we can personalize the decision-making process to help consumers make more informed decisions, faster. And we have done this be aggregating and doing semantic analysis on over 18M traveler opinions from all over the web.

I would love to get your feedback on our private beta!

Yen Saturday, October 20, 2007 at 12:57 AM PT

Hi Sramana, I appreciate your valuable insights.

While I think the dynamic packaging and book site giants like Expedia,
Orbitz, Travelocity, Priceline, etc., and even the travel metasearch
engines (Kayak, etc) have impacted travel planning in such a
significant fashion, I would argue that vacations are not commodities.
You can’t adequately plan an itinerary or a entire leisure vacation by
using a booking site like one of the aforementioned. I believe it’s
critical that destination sites, like ours ( serve
two audiences, what we call the Decideds and Undecideds. The decideds
are those who have already decided to vacation to Yellowstone and to
these folks, our site needs to provide all the trip-planning tools in
one place for them to plan and book their trips. But the Undecideds
represent the biggest challenge, and most importantly, the biggest
opportunity. Will it be Disneyland, Grand Canyon or Yellowstone we
vacation to? The best destination site – one that offers great
content, stunning design and interactive, engaging user experience,
plus different media forms (in short, the “best” site) will win the
tourist. This is why it’s so critical that tourism websites go beyond
being an online guide or an online brochure… and this is why a
destination’s site is so important in today’s web 2.0 landscape. It’s
from there (after a person is influenced and has decided on a vacation
destination) that the booking sites are then invaluable.

Many vacations are the vacation of a lifetime, big memorable
experiences that cannot be planned from start to finish at a site like
Travelocity or Orbitz. These sites serve more as a great utility once the aforementioned destination shopping is completed and influenced elsewhere.

Shelli Johnson Wednesday, January 2, 2008 at 1:46 PM PT

Not yet, no. But in the Web 3.0 world that we are envisioning, where enough quality content on the potential destinations (including UGC) are accumulated in one place, along with Contextual navigation (Context including Travel Planning for the Decided and the UnDecided), we should be able to achieve the user experience you are talking about.

Sites like yours have a role to play, of course. You know more about your local offerings than anyone else, so you should be part of how the content is pulled together. That could be in the form of syndicated content.

From the perspective of the Expedia and Kayak and so forth, they should bring content from all these fragmented sites that have valuable information together in one place.


Sramana Mitra Wednesday, January 2, 2008 at 2:19 PM PT

Re. the internet needing to provide better context in travel space, etc., and being a key part of Web 3.0… are you familiar with Stanley Plog’s “Travel Personality Quiz?” It’s a pretty cool tool that allows people to be categorized according to travel type after taking a short quiz… then eventually their goal is to link to destinations that fit the outcome of the personality quiz. It’s a handy idea… but I’d like to know if you think a quiz is necessary to determine traveler type, or if we can simply determine ourselves what category we fit into, and from there browse sample intineraries, or tagged content, that corresponds with what traveler type we are. We’re working on developing this on and would appreciate your input on contexts and the aforementioned ideas for a way to get to it and provide it. Thanks, Shelli

Shelli Johnson Tuesday, January 8, 2008 at 9:56 AM PT


i am working as vp business devlopment in a indian based travel company i want to start my
own travel portal can u guide me what will be the initial cost to start and min mob-09988735800.waiting for your reply and advice.

DILIP BEHERA Monday, January 21, 2008 at 10:19 AM PT

I think it’s getting very easy to find what I’m looking for online when it comes to travel, but I’d like to see more outdoor travel related sites.

Mr. Merino Tuesday, February 5, 2008 at 7:29 PM PT

[…] have covered Priceline earlier in my Web 3.0 series, as part of the online travel industry analysis, as well as the company specific analysis. The controversial Pricing Priceline piece last […]

Priceline Continues to Soar to New Heights - Sramana Mitra on Strategy Wednesday, March 19, 2008 at 6:00 AM PT


Here is another niche travel site you may want to check out. is one of the most comprehensive resources I have found for planning leisure vacations. I saw in a press release six months ago that the site started filming professional video for leisure travel destinations and properties worldwide. They have released some of the video on the Web site and I think it is pretty cool. I have a friend who works at the company and he says they will be releasing a destination guide and member functionality (reviews, photos, videos, travel maps, trip planner, etc.) in the next couple of months. Check it out and let me know what you think.


Rob Saturday, May 31, 2008 at 3:40 AM PT

[…] three key online travel companies are going through a rough patch following their recent quarterly earnings […]

MaximumCEO » Blog Archive » Online Travel: Expedia, Priceline, Orbitz: business strategy, supply chain management, outsourcing Thursday, August 7, 2008 at 5:59 PM PT

Oh how far has technology come to allow us to do these types of things! 😉

Niche Generator Monday, November 23, 2009 at 10:25 AM PT

Good analysis of the changing online travel industry. It’s true that we have come a long way in this field. So much so that individuals are now acting as their own travel agents. There are so many resources to find deals and information that you can plan your full trip out online.


Dan at Spain Travel Deals Blog Tuesday, January 12, 2010 at 10:03 PM PT

Hello Sraman

I really appreciate this article on online travel, its growth and other aspects.

I run a travel company in Rajasthan by the name RajasthanTour4u Travel Service ( Though at present our website receives more than 300-400 visits on a daily basis, still I am not happy with it and wish to make it more of an online platform for people who are looking to book their travel in Rajasthan.

The present website is a traditional one with lots of content; I would request you to have a glance and help me out with how I can look to change the website so that it doesn’t loose the present standing and in future becomes a one stop shop for travelers to Rajasthan.

From Rajasthan Sunday, May 23, 2010 at 7:32 AM PT

You should come pitch at one of my roundtables.

Sramana mitra Sunday, May 23, 2010 at 12:41 PM PT

Hello Sramana

I have registered for the round-table this Thursday.. Will pitch sometime in near future after I attend your sessions..


From Rajasthan Tuesday, May 25, 2010 at 5:19 AM PT

Thanks for the info. I have only just started my blog but would like to make some (yes I know not a lot) money from it eventually. It is good to have the end goal in mind.

kefalonia holidays Saturday, August 21, 2010 at 2:19 AM PT