Vertical Outlook: Travel

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Bright spots: In retail travel, home-based travel agents are flourishing.

Challenges: Severely damaged by Hurricane Katrina, New Orleans and other Gulf Coast destinations may not be advertising for some time.

Travel advertising is taking off again after the deep, post-9/11 decline, although unforeseen events, such as last year's hurricanes, could set the industry back again.

For the first time in five years, retail travel b-to-b advertising saw page growth in the fourth quarter of 2005, said Kerry Cannon Jr., group publisher of Questex Media's Travel Agent. "Pages in the market grew 11% in the fourth quarter, and I'm bullish on this space," he said.

Cannon believes the shakeout among travel agents, caused by the increase in online booking by consumers, has finally stopped. "The agents that are left are very professional, and their clients travel 32% more often than average, stay longer and spend more money," Cannon said, citing his company's research.

"Since 2001, pages in this market have been sliding, sliding, sliding, and suddenly, starting last August, they lipped up," he said. "So, we're predicting slight page growth for 2006."

On the business travel and conventions and meetings side of the business, though, the last quarter may have washed away the year's earlier gains. IMS recorded a substantial 11% increase in ad pages for the first 10 months of the year in this sector, but those numbers largely missed Hurricane Katrina.

"A lot of destinations on the Gulf Coast have been virtually put out of business," said Bernard Schraer, group publisher for Northstar Travel Media's Meetings & Conventions.

For 2006, Schraer predicts "a year of slow and steady growth, but I don't anticipate it being an all-out, bang-up year." In 2005, online advertising in the business and convention travel market increased about 30%, he estimated, adding that he expects the growth rate to slow in 2006 to about 20%.

Even without much advertising from business and convention destinations along the Gulf Coast, Schraer said he expects ad pages will be up 4% to 6% this year.

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