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31 Oct, 2005

Consumers Wary of Booking Online, Survey Shows

Rosy forecasts by online travel research companies appear set to hit a reality check with alternative consumer surveys showing high levels of concern about online purchasing due to fears about privacy and identity theft.

A new Survey of US Internet Users for Consumer Reports WebWatch says that Internet users are becoming “more demanding of Web sites, less trusting and adjusting their behaviour in response to what they see as very real threats in the online world.”

Although travel websites were not covered directly by the survey, its findings of other online sites like finance, ecommerce and news have considerable implications for airlines, hotels and the entire travel & tourism industry, which generates more sales than any other category of online commerce,

The telephone-interview survey with 1,501 U.S.-based adult Internet users comes in the midst of furious competition for the online travel booking dollar.

Last week, popular search engine Yahoo joined the fray by launching its Trip Planner service to help customers book flights and hotels and weave together existing services such as maps, bulletin boards, blogs and local listings.

Most consumers got to one of the “Big Three” travel sites – Travelocity, Expedia or Orbitz – but Yahoo recognises the potential of travel in attracting advertising targetted at its 180m registered users and 400m monthly visitors.

However, the growing incidence of online fraud, identity theft and access to personal information entered by users is clearly having an impact, as indicated by the WebWatch survey.

It said, “For all online users, concern about identity theft is substantially greater than simple concern about theft of credit card information. Four in five Internet users (80%) are at least somewhat concerned that someone could steal their identity from personal information, such as Social Security numbers, that is on the Internet.

“Forty-five percent say they worry a lot and 35% say they worry some, while just 20% say they do not worry very much or at all. Younger Internet users show less concern about the risk of identity theft than their older counterparts do. Additionally, those who use online e-commerce and financial sites worry less.”

It said that “the overwhelming majority of online users (86%) believe that the Internet has made identify theft more common, while just five% say it has made it less common. Five percent say the Internet has not had any impact.

“These high levels of concern have driven Internet users to change their behavior online to try to protect themselves and their assets. Nearly nine out of ten users (86%) have made at least one change in their behaviour because of fears about identity theft.

“A majority of Internet users (53%) say they have stopped giving out personal information on the Internet. Fewer, but still substantial numbers of Internet users say they have reduced their overall use of the Internet (30%) or they stopped shopping online (25%) because of concerns about identity theft and the security of their personal information.”

The survey said that among online shoppers, the most significant behaviour change is that 58% have started using just one credit card for all the items they buy online.

Fifty-four percent of those who continue to shop online reported they have become more likely to read a site’s privacy policy or user agreement before making a purchase. And 29% say they have reduced how often they buy products on the Internet.

The survey said there also “are signs of declines” in trust related to the accuracy of information on websites.

“Internet users remain quite skeptical about various categories of websites in general, even as they have built a level of trust with specific websites through learning and experience.”

News websites are trusted by 54% of users. Trust in financial companies to provide accurate information stands at 51%, down four percentage points since an earlier survey in 2002.

For some organizations, distrust has risen, the survey said. “The share of Internet users who say they almost never trust large corporations to provide accurate information has increased seven percentage points since 2002.

“Websites offering products for sale have also lost some credibility. Now, one in five Internet users (21%) say they almost never trust websites offering products for sale, up from 14% in 2002.”

More users say they are placing substantial importance on specific reasons for choosing one website over another than they did in 2002.

<> 88% say keeping personal information safe and secure is very important for a website they visit.

<> Being able to trust the information on a site is not far behind with 81% saying it is very important, little changed from 80% in the 2002 survey.

<> 76% say it is very important to be able to easily identify the sources of information on the site, up 8 percentage points.

<> 73% rate knowing a site is updated frequently with new information as very important, also up 8 percentage points.

<> 48% say knowing who owns a Web site is very important, up 16 points.

The full report can be downloaded from http://www.consumerwebwatch.org/

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