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Report: Online travel sales to climb 19.7% in 2005

April 21, 2005 |

A new report by eMarketer estimates that online travel sales will climb to $58 billion in 2005, up 19.7 percent from $48.5 billion in 2004.

Online commerce sales will grow to $142.5 billion this year, up 21 percent from last year’s $117.7 billion, according to a retail trends report released Tuesday by research firm eMarketer.

While impressive, the projected growth rate is less than the 25.2 percent gains seen from 2003 to 2004. E-commerce will continue to grow for at least the next several years, climbing to $232.1 billion by 2008, but the growth rate will slow down to 16.5 percent by that year, according to the report.

“The market has reached a large enough size that, even though the growth is going to be strong, it will slow down a little bit,” said Jeffrey Grau, the eMarketer senior analyst who authored the report.

Broadband adoption has been a key driver in the double-digit growth of online shopping, the report concluded. Nearly two-thirds, 64 percent, of U.S. Internet users with broadband make online purchaes, compared to 49 percent of dial-up users, according to eMarketer. That estimate jibes with a report released Tuesday by Yahoo! and Mediaedge:cia, which revealed that 68 percent of Internet users with wireless broadband and 49 percent of those with wired broadband regularly making purchases on the Internet, compared to 38 percent of those on a dial-up connection.

eMarketer estimates that $84.5 billion of the total revenue estimate for 2005 will come from retail sales, up 22.1 percent from last year’s $69.2 billion, and that online travel sales will climb to $58 billion, up 19.7 percent from $48.5 billion in 2004.

U.S. Internet users over age 14—who number 151.7 million, by eMarketer’s estimate—will spend an average of $878 online this year, up from $770 in 2004, according to the report. Average annual spending for this group will likely reach $1,248 by 2008, almost double the 2003 average of $675, stated the report.

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