TRAVEL PLANNING IN CYBERSPACE YOU CAN RENT CARS, BUY PLANE TICKETS, AND BOOK HOTEL ROOMS ONLINE. BUT DON'T DUMP YOUR TRAVEL AGENT JUST YET.
By MARC GUNTHER REPORTER ASSOCIATES MICHAEL H. MARTIN, ERYN BROWN

(FORTUNE Magazine) – Long before packing his bags for a three-week summer vacation to Europe, Dave Hatunen traveled to the World Wide Web. He downloaded city maps and railway schedules, made plans for the theater in London, checked into the Stockholm-Helsinki ferry and, most important, bought three round-trip plane tickets from San Francisco to London for $2,317 from an online travel agency called Travelocity. "I was able to hunt down the cheapest fare available, short of charters," says Hatunen, 58, an engineering technician from Palo Alto. "I felt like I was in control of my destiny, rather than crossing my fingers and hoping some travel agent was going to do his best."

Hatunen is just one of thousands of travelers who bypass conventional travel agents to buy airline tickets, book hotels, and reserve rental cars online. So it's no surprise that airlines, hotel chains, and yes, worried travel agents are setting up shop online to serve do-it-yourself, computer-savvy travelers. These new sites offer direct access to databases previously available only to travel agents, easy-to-use software, online guidebooks, and occasionally honest-to-goodness bargains available only on the Internet. Their goal: to capture a slice of the estimated $200 billion worldwide market for leisure travel.

Unlike most Internet ventures, travel companies are already racking up serious online sales. Last year easySabre, AMR Corp.'s consumer-oriented version of the Sabre computer reservations system for travel agents, sold 1.6 million tickets online. More recently, airlines have been using the Net to promote dirt-cheap, last-minute weekend airfares. The 150,000 people who have signed up for NetSAAvers at the American Airline's Website, for example, are alerted to specials once a week via E-mail, helping fill seats that would otherwise have gone empty. Preview Travel, a San Francisco-based cyberagency backed by America Online, Landmark Communications, and US West, says it sells $50,000 to $100,000 worth of airline tickets a day on AOL and the Web.

Why buy travel services online? For now, the key reasons are convenience and control. Virtual travel agents are open all night and on weekends, and travelers can spend as much time as they want sizing up potential destinations and fiddling with itineraries. No one would think of keeping a human travel agent on the phone for an hour to book a single flight or fantasize over a long list of hotels in Bermuda--but there's no hurry on the Web. "When you think about what you need to plan a trip, it's all about information," says Greg Slyngstad, manager of travel products for Microsoft, which plans to launch in October a travel Website called Expedia. "What we're going to do is organize all that information, conveniently, in one place."

That may be easier said than done, but Slyngstad's got the right goal. Yes, you can click here to book a plane ticket to Chicago, click there to rent a condo in Florida, and click over there to take a dogsled across the Yukon--but there's no one-stop shopping on the Web. Some guideposts, then, till someone brings it all together:

--Airline tickets: Dozens of companies, including many airlines, sell tickets online, so it pays to shop around. While no site stands out as Bargain Central, a few offer good deals. PCTravel of Raleigh gives special discounts and extra frequent-flier miles to members of its Web-Net Traveler club, which costs $49.95 to join. Flifo, headquartered in Austin, Texas, has a nifty "fare beater" feature that seeks out low fares, and the agency recently offered 5% to 10% off TWA and Continental tickets. Cathay Pacific holds online auctions of off-peak tickets to Hong Kong. Most sellers take credit cards by e-mail or over the phone and send out tickets by overnight mail at no extra charge.

You're entitled to a price break; after all, you're taking on work that would otherwise be done by a travel or an airline-reservations agent. The airlines like the Web because selling directly to customers cuts the $6.4 billion a year they now spend on travel agent commissions--which is just $1.8 billion less than they spent on fuel in 1995. For now, it's unclear who will benefit from the lower cost of selling tickets online--airlines, customers, or online agencies. The tension between agency and airline will continue in cyberspace--on August 1, Northwest Airlines cut commissions to online agencies, some of which responded by refusing to sell its tickets.

--Hotels and rental cars: In theory, online agencies should allow you to search through databases of thousands of hotels till you find the perfect spot. In practice, there are glitches. Visiting TravelWeb, a popular site that promises access to 9,000 hotels, we asked for a health club-equipped Seattle hotel with cable TV and a modem line in a room that cost no more than $150 a night. The responses we got were inconsistent and sometimes incomplete. Less ambitious sites can be more user-friendly. Bed & Breakfast Cape Cod, for instance, offers a list of 100 places to stay on the Cape and nearby islands. As for rental cars, check out the Internet Travel Network, which lets you compare rates and availability--but only after you plug in an airline itinerary.

--Vacation packages: You'll find them all over the place--but make sure you know whom you're dealing with. Travelocity offers more than 200,000 pages of travel-related content. Nevertheless, the only packages it sells are assembled by American Airlines, whose parent company is a partner in the site. By contrast, Rosenbluth Vacations' cruise database lists more than 500 cruises from many operators. Travelers with special interests are especially well served: Mountain Travel Sobek, an adventure-travel specialist, has a site with good writing, great pictures, and exotic-sounding trips like a sea kayaking expedition to northeastern Greenland.

A word of caution: by the time you get your PC booted up, log into an Internet provider, sign up for a Website, figure out how to use the search engine, and sort out the airport codes, you may need a vacation. Unless you're a do-it-yourself type who enjoys playing around online, you'll probably want to rely on a travel agent to hammer out the details--provided yours is knowledgeable. Frequent traveler John Levine, author of Internet for Dummies, says, "Doing your booking on the Net is not as good as talking to a really good agent, but it's a lot better than talking to an inept agent, and unfortunately, a lot of agents are pretty bad."

In the not-too-distant future, though, online agents may gain the edge. Imagine watching videos of beach resorts you're considering for a vacation and getting a look at the room you want to book. Or receiving a single weekly bulletin alerting you to last-minute bargains at airlines and hotels that are trying to shed unsold inventory.

That, in theory, is the beauty of the Web. online commerce should bring out the best in capitalism, efficiently matching buyers and sellers, eliminating middlemen, and lowering distribution costs and prices. With travel services that's already happening, albeit on a small scale. If such practices spread, cyberspace will become the first stop on a savvy traveler's itinerary.

REPORTER ASSOCIATES Michael H. Martin, Eryn Brown