Despite some online retailers struggling to gain traction on the Internet, one sweet spot that has emerged is a budding online travel industry.
Online purchasing in the travel industry has fully embraced e-commerce, with an average of 320,000 Australians purchasing travel-related goods and services per week between June 2002 and 2003.
At the cusp of the Internet boom up to December 2000, 58,000 people each week bought travel-related goods and services online in Australia. The increase is not driven by the fact that there are more local online purchases, but by the fact that the airlines use their Web page as a tool to conduct business, not just as a digital brochure.
Chris Paterson, IT director with Australian-based online travel portal Travel Online, said from what he has seen, sales of online domestic and international travel have risen industry-wide.
"Most customers using the Internet to buy travel arrangements are buying from their workstation, because they cannot get the information from a shop down the road or it is not convenient to go to a travel agent during their lunch hour.
"Traditionally, we book inbound travel and a lot of the Americans and Europeans will use the Internet to make arrangements; however, local use for domestic travel has increased since September 11."
A spokesperson for Qantas said 25 percent of all online sales are for domestic travel between Sydney, Melbourne and Brisbane.
During May the revamped Queensland holidays Website (www.queenslandholidays.com.au) became the most successful destination URL in Australia with 428,203 visitors, a 46 percent increase compared to 2003.
Margaret Keech, Queensland Tourism Minister, said the increase in Web traffic can be contributed to a number of key factors including a domestic online price war.
"Much of this can be attributed to the intensive test marketing done by the e-marketing and destination marketing departments in determining what looks best on the Web," Keech said.
"Airline Web deals are also leading a worldwide change in consumer behaviour when it comes to online travel bookings – and this is a trend Tourism Queensland is determined to capitalise on."
Alex de Waal, executive general manager for Queensland Sunlover holidays, said the cheap domestic fares being advertised now are the main driver behind people using the Internet for travel transactions.
"The huge investments made by Virgin Blue and Jetstar is driving the rapid increase in sales as people have started dabbling in simple transactions and found there is no danger so they are starting to be more proactive in looking to purchase on-line," de Waal said.
"Generally, there are three types of person who buy travel online; those that are Net buyers, Net searchers and those that are Net intensive. The Net buyer has a particular destination in mind and goes online with a view to buying an airfare and accounts to 16 to 17 percent of transactions online.
"The Net searcher just uses the Internet to get information and will conduct their transactions elsewhere – they account for 10 percent of users but those in the Net-intensive bracket go beyond buying airline transactions – they buy entire packages and have grown to account for roughly 15 percent of all transactions conducted online in Australia."