Travel Industry – Online airline ticket sale growth trending down – TMCs picking up slack

The Airline Reporting Corporation tracks airline ticket sales for the 14,500 travel agencies (both online and offline) in the US.  In May, these agencies sold $7.4 billion in air tickets, up 5.92% year over year.
In the first quarter of 2011, online agencies represented 23% of all airline tickets sold in the US, that is down from 26% at the end of 2010.  The online category includes Expedia, Orbitz, Travelocity, Priceline, Hotwire and other pure play online agencies.  
As of the end of the first quarter, the mega category including travel management companies (which include Amex, CWT, BCD, HRG, Maritz, Omega and CWT/Sato) are responsible for 27%.  This is up from 25% at year end.  
The remaining 14,480+ agencies make up the other 50% of tickets sold.  Sales were up 10% overall for the 1st quarter year over year.  This is the same as year end.
The following chart from the ARC Segmentation site reflects the % of growth experienced by each of the sectors that are tracked by ARC as of May 2011. 
As you can see, up until December of last year when the tiff between AA and Orbitz began (and when Expedia also pulled AA flights in an odd show of support for Orbitz), the online trend line diverged from their brick and mortar brethren.   While April was down for all due to normal seasonality, the mega and other brick and mortar agencies bounced back, while online is still down below the growth line.
As we look at unique visitor stats from, the picture isn’t quite as bleak, but that means that they are seeing their growth and conversions from products other than airline tickets, which is not surprising.
With the exception of Travelocity which is lagging in both April and May, from a unique visitor perspective, all of the online agencies appear to be tracking with normal seasonality.  
Interestingly enough, is seeing some uplift from their consumer direct campaign and in May saw a 14.84% growth over the previous year, whereas Expedia and Orbitz each saw just 3.7%, Priceline saw 10.2% growth and Travelocity saw a loss of 31.2%. 
Stay tuned.

This graph reflects the growth of each of the constituent groups tracked by ARC.  As you can see, for the most part, the natural seasonality impacted each of the groups equally, but in December, when the tiff between American and Orbitz began (followed by Expedia’s action of pulling out AA inventory), online declined, while their brick and mortar counterparts (both the mega agencies and the other 14,000+ agencies) have followed a similar growth path. 

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