Would it be fair to say that online travel services is the success story of Internet commerce?
Mr. Fuller: Absolutely. Travel is the largest retail category on the Internet and one of the groups to actually achieve broad success in terms of profitability. All of the public companies in the group actually turned profitable in 2001. So online travel is big (3 times the sales of books, CDs and clothes combined), growing rapidly (15% plus over the next decade), and profitable (no distribution centers or inventory to support). TWST: What has been driving the success of this sector? Mr. Fuller: First, travel is the ideal virtual product. Unlike books or groceries, the retailer does not need to maintain any distribution centers or inventory. Travel is really an electronic product, which makes it profitable to sell. Second, the online retailer shifts power from agents to consumers. Travel pricing has always been murky at best, but now the consumer has access to real-time pricing and availability information and does not have to rely on an agent. Finally, suppliers have made better price
