Online Travel: The Mountain Just Got Higher

Still, with the indomitable spirit that Americans typically display in times of crisis, essential online industries have hung tough. Chief among them is the online travel industry, a sector that is experiencing its greatest volume of work and level of chaos to date -- and is admirably rising to the occasion.

Traffic to online travel sites has reflected not potential sales, but Americans aided. Perhaps just as remarkable is that travel sites are doing this while their future looks as precarious as it has ever been.

Change in Plans

Immediately after the terrorist attacks on the Eastern seaboard, as the U.S. State Department was urging citizens to exercise due diligence and increased care regarding travel, online travel sites geared up for the onslaught of ticket changes, cancelled flights, airline uncertainty and general consumer confusion.

Travelocity, Expedia, Orbitz and others turned their focus away from competing with each other over the best fares, travel packages or promotional gimmicks. After September 11th, these sites simply became primary engines to help stranded Americans. It was, and is, no small accomplishment.

To the credit of these sites, as soon as new restrictions were imposed by the government, such as a cancellation of all curbside check-in of luggage, notices were posted prominently on their Web pages. For example, Expedia established a resource center, outlining any interruptions in travel, as well as new governmental restrictions.

When the Dust Settles

However, the emphasis that commercial travel sites have placed on public service, while noble and appropriate, raises a number of questions.

First, how long can the travel sites focus primarily on customers who have already purchased travel items? At some point, the volume each site experiences must generate a certain level of fresh revenue.

Second, what will be the true financial impact of the worst terrorist attacks in our nation's history on one of the few Internet-based business models where companies turn a profit? Some observers believe Americans will go into a nesting mode, traveling less and opting for the security of their own living rooms.

Less Product

Several major airlines, bracing themselves for decreased volume as they wait for an infusion of cash from the government, have announced significant reductions in flight schedules. This hurts travel sites by reducing the overall inventory of seats they can sell.

Even if the government comes through with some sort of bailout for the airlines, it is unlikely such an offer would extend itself to online booking sites. Such sites are now essentially out there on their own.

Treading Gingerly

Perhaps the diciest question for travel sites is this: How aggressively can any of them go after an increased market share without appearing to be capitalizing on this human tragedy?

The unveiling of perky new marketing campaigns could backfire at a moment when the national psyche is mourning and healing. Yet, without some new push for sales and new customers, the sites could face a shaky future.

Timing is Everything

Some Americans say it is still too soon after the tragedies to be discussing sales and profits. But the reality is that now is exactly the time that new strategies must be considered.

Corporate America has to learn -- quickly -- how to grieve and fully operate at the same time. This is especially true for the online travel industry.

There is nothing disrespectful about generating new business, increased transactions and keeping the bottom line solid. When all is said and done, the best of American industry is that which survives in the face of full adversity.

What do you think? Let's talk about it.