Dynamic Packaging Fuels Growth of Online Combination Purchases

By Michael Cannizzaro and Lorraine Sileo reporting in PhoCusWright's FYI newsletter

The ability to customize packages drove continued growth in combination purchases by online travel buyers in 2004, according to the upcoming report The PhoCusWright Consumer Travel Trends Survey Seventh Edition. Last year, one-third of online travel buyers made a combination purchase of travel components using dynamic packaging technology, up from 24% in 2003. The number of online travel buyers who purchased pre-packaged travel, however, declined in 2004 to 13% from 19% in 2003.
 
This trend puts the spotlight on the emergence of technology evolving to support a new, "just in time," Internet-based leisure distribution platform. In fact, dynamic packaging user interfaces will change dramatically in the next two years, according to Selling Complex Leisure Travel Online: Focus on Dynamic Packaging Technology, a new report from PhoCusWright Inc. and Travel Tech Consulting Inc. Dynamic packaging commands an increasingly dominant share of the online packaging market (see Table 1), and suppliers, tour operators and online travel agencies are enlisting new technologies to capture those sales.
 

 
New dynamic packaging technologies that can react to consumer behavior are close on the horizon. This fact, and the continued conversion of package bookings online, presage a new phase of package sales for consumers, suppliers and intermediaries alike.
 
Participants in The PhoCusWright Consumer Travel Trends Survey were identified as having personally traveled by commercial airline in the previous year and having used a computer to connect to the Internet in the past month. Quotas were set based on the distribution of males and females in geographic regions of the country, and the error interval for the sample is +/- 4.4% at the 95% confidence level.