Yahoo!, Travelocity, and Expedia Receive Top Ratings for On-line Travel Sites From Forrester.

CAMBRIDGE, Mass.--(BUSINESS WIRE)--July 1, 1999--

The on-line travel industry is poised to grow from $3.1 billion in leisure travel bookings in 1998 to more than $29 billion in 2003. The majority of these bookings will go to the sites where 24 million U.S. households are researching trips on-line today. To understand who's likely to win among these sites, a new Technographics(R) Report from Forrester Research, Inc. (NASDAQ:FORR) ranks the travel sites by the profiles of their current users.

Of the 34 travel-related sites evaluated by Forrester, only the top nine have a clear lock on the Net traveler. The overall winner among today's on-line travel sites is Yahoo!, followed closely by Travelocity and Expedia. The next six spots are held by Web portals and major airlines -- Southwest, Excite, Netscape, American, Delta, and Infoseek. Forrester believes that these leaders will go unchallenged through 2003 while many of the companies in the lowest tier will be acquired or close their virtual doors.

"The ability to attract an audience gives portals and suppliers a natural advantage," said Forrester Technographics Senior Analyst James L. McQuivey. "Portals draw large numbers of lookers trying to find information. Suppliers attract travel bookers. The leading on-line travel agencies -- Travelocity and Expedia -- combine the best of both and will be difficult if not impossible to dislodge from their positions as on-line travel leaders."

To evaluate today's Web travel providers, Forrester measured their reach, booking score, and revenue index. Reach measures the percentage of travel lookers and bookers who report visiting a site in the past year to research travel. The booking score expresses how well a site converts its experienced bookers. To gauge a site's earning power, the revenue index measures how much its visitors spend on leisure travel each year and what percentage of that travel they book on-line. This figure is divided by the average amount bookers spend on-line. The three metrics are multiplied together to produce Forrester's travel site ratings.

When comparing on-line travel agencies, suppliers, and portals against one another, their relative strengths become clear. The Web portals, for example, all scored well in the ratings due to their audience reach. Unfortunately, this reach produces little revenue. To maintain their place among the top travel sites, the portals need to integrate more powerful travel features into their personalized pages and offer incentives for travelers who book through their travel agency and supplier partners. Ranked together, the top five on-line travel portals are Yahoo!, Excite, Netscape, Infoseek, and AltaVista.

Suppliers face a different dilemma. Because most suppliers only offer limited booking capabilities, their reach and revenue growth will be limited. Only the major airlines beat this constraint by offering full-fledged reservations systems on their sites. To strengthen their position in the overall rankings, suppliers need to focus on wider distribution of their inventory through auctions and portal partners. The top five on-line travel suppliers are Southwest, American, Delta, United, and Marriott.

Finally, the on-line travel agencies are in peril. Although they offer the best of suppliers' and portals' sites in one location, there will only be demand for a few all-purpose sites. Travelocity and Expedia have ascended to the top positions largely due to their affiliation with Yahoo! and MSN, respectively. Preview Travel, a distant third among the agencies and 12th overall, hopes to gain on the two leaders by partnering with Excite, AOL, and Netscape.

Forrester Research is a leading independent research firm that analyzes technology change and its impact on business, consumers, and society. Forrester's "whole view" of the Internet economy enables clients to weave together Internet commerce initiatives with corporate systems to satisfy the customer's changing needs. Clients receive the "whole view" through Forrester's unique eResearch reports, an array of advisory services, and events. Established in 1983, Forrester is headquartered in Cambridge, Mass. The Forrester European Research Center is located in Amsterdam, Netherlands. Additional information about Forrester Research can be found at www.forrester.com.

Technographics is a registered trademark of Forrester Research, Inc.