Waiting and seeing

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Travel sites saw traffic drop in the wake of the Sept. 11 terrorist attacks. More importantly, for a category that has been one of the Internet's few bright revenue stars, bookings were down 50% or more in another illustration of Americans' skittishness about flying.

According to data from Jupiter Media Metrix, unique visitors to Expedia, which is majority-owned by Microsoft Corp., dropped slightly from 2.8 million during the week ending Sept. 9, two days before the attacks, to 2.77 million during the week ended Sept. 16. Traffic drops at some other sites were more dramatic; Travelocity.com saw its traffic slide from 2.57 million to 1.98 million, and Orbitz, which launched last spring as a travel site sponsored by five major airlines, saw its traffic halved from 2.12 million to 1.08 million.

But bookings, or declines thereof, tell the real story. Priceline, which had recently been rebounding after getting out of sideline businesses such as groceries, saw bookings fall 35% to 40% below previous levels early last week. Expedia reported early last week that its post-attack bookings were off by as much as 60%.

As the week progressed, there were signs of a slight rebound. According to Erik Blackford, senior VP-marketing and programming at Expedia, bookings as of Sept. 17 had risen to 45% of pre-attack averages.

The category was largely taking a wait-and-see attitude toward advertising. While some, such as Sabre-owned Travelocity.com continued to advertise on their own sites, others canceled all advertising until further notice. "Honestly, we're looking at it day-to-day," said Expedia's Mr. Blackford. He predicted the service would ease back into advertising soon-first with ads "that are quite targeted and have very little chance of upsetting anybody," he said. Other sites were even more cautious. Priceline officials could not be reached about their ad plans.

An Orbitz spokeswoman, calling the situation "unprecedented," commented, "We have to take it a day at a time." Orbitz is spending about $30 million on a TV campaign, via Omnicom Group's TBWA/Chiat/Day, New York, and the marketer was expected to spend $100 million total on marketing efforts (AA, June 11). The Travelocity.com service spent $30.4 million in advertising in 2000, the Expedia.com service, $28.6 million and Priceline, $92.7 million, according to Taylor Nelson Sofres' CMR.

Expedia, which is in negotiations to sell a majority stake to USA Networks, said last week it was continuing to work on that deal.

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