Canadians fly to the Internet for travel plans

Travel represents the largest area of Canadian online spending according to IDC Canada, but that doesn’t mean companies can take time off from improving the privacy protection of their customer’s data.

The research firm on Tuesday released a bulletin that said travel-related products generated

approximately $1.5 billion in online sales in Canada last year. This was followed by books, computer hardware and consumer electronics. Overall, IDC saw online spending on the rise, with a forecast increase from $7.5 billion last year to $49 billion by 2006.

“”We do see travel remaining the No. 1 item at this point in time,”” said Joe Greene, vice-president of telecommunications and Internet research at IDC Canada in Toronto. “”You can buy airline tickets online, you can get hotels, you can book cars and things like that. Because travel items tend to be fairly large in terms of overall price, that’s why we tend to be optimistic that it will stay there.””

Traditionally the primary inhibitor of business-to-consumer (B2C) spending has been fears of credit card use over the Internet, but Greene said more than 80 per cent of people who buy online settle online with credit cards. In preparing its most recent research, however, he noted that 60 or 70 per cent of consumers abandoned a site where they might have made a purchase due to privacy concerns.

“”Privacy and security are still two main issues that are impeding consumers purchasing online,”” he said. “”It’s not so much credit card theft but just security. I think security all around their private information is much more important to Canadians than credit cards.””

Stuart MacDonald, managing director, Expedia Canada Corp., said he has heard the same thing from his customers, which is why the company has its privacy practices audited by PricewaterhouseCoopers. MacDonald said that while security issues remain critical, customers are finding themselves more at ease with the online experience.

“”If anything has happened, it’s that Canadians have been catching up to the U.S. warmth and acceptance of actually booking travel over the Internet,”” he said. “”We think that that’s coming partially through increasing familiarity and comfort with online buying in general.””

Greene said travel related products will reach nearly $11 billion by 2006, with a compound annual growth rate of 47.9 per cent. Even after the terrorist attacks of Sept. 11, which many believed would cripple companies like Expedia, the impact has not been severe.

“”We took the last three quarters of last year and asked these same questions,”” said Greene. “”It didn’t seem to affect travel too much. Maybe people weren’t travelling to the States. We didn’t ask where they were going.””

MacDonald said Expedia is prepared for the growth IDC is predicting.

“”Online still represents a very small part of the overall travel market,”” he admitted. “”But we believe the future for online travel as a category in Canada is extremely bright and there is still a lot of opportunity for us.””

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