INDUSTRY WATCH

Web Agencies Leave Customers Unhappier

Expedia, Orbitz, and Travelocity appear to be disappointing customers because of competition from airline and hotel websites and travel search engines, such as Kayak and Sidestep.

By Sean O'Neill, Thursday, Mar 1, 2007, 10:28 AM

Customer satisfaction with Expedia, Orbitz, and Travelocity recently sank, while satisfaction with all other industries in e-commerce rose. That's according to the American Customer Satisfaction index released last week by the University of Michigan.

Travel websites received a combined score of 76 out of 100--a drop of 1.3 percentage points from the 2005 survey period. Online travel's combined score of 76 was also lower than the average score for Web retailers overall, which was 80.

"Customers are less loyal to the online travel sites than to online retail sites such as Amazon, Barnes & Noble, and eBay," says Larry Freed, chief of ForeSee Results, the market-research firm that helped the University of Michigan conduct the survey.

The index asked consumers to rate their satisfaction with the goods and services they buy in a variety of industries. About 20,000 consumers, including about 4,000 airline and hotel customers, were surveyed during the last three months of 2006.

The top travel website score: Expedia's 78. "Expedia's score has dropped one point since 2006 as its market share dipped 5 percent in the first six months of 2006," says Freed.

Close behind were Orbitz at 75 and Travelocity at 74. The survey didn't rate other travel websites.

Customers appear to feel little loyalty to Expedia, Orbitz, and Travelocity, which appear to be hurting because of competition from airline and hotel sites and travel search engines, such as Kayak and Sidestep. Says Freed, "The things that signal lack of loyalty are low customer satisfaction scores and little variation among satisfaction scores in a category."

Expect the big three websites to roll out new features in the coming year that attempt to boost customer satisfaction.