Online travel agency revenue in 2005 will reach $27.7 billion in the U.S., for a year-over-year growth of 19 percent, according to MediaPost, which cites a Merrill Lynch estimate - one more optimistic than its previous estimate of 15 percent growth. Although consumers can purchase directly from airlines, hotels, and other direct suppliers, bookings from online agency sites such as Expedia, Travelocity and Orbitz were up 20 percent in the second quarter, according to Merrill Lynch, which also forecast that revenues at direct suppliers online would grow 27 percent this year, to $32.5 billion.

Overall, online travel sales will account for an estimated 30 percent of the total travel market this year - up from 25 percent last year and 21 percent in 2003, according to Merrill Lynch, which concludes that search engines are driving much of the increase in online bookings and predicts that search-related bookings will double each year through 2007.

Expedia is expected to be the leader in 2005 travel agency market share, with 44 percent of bookings; Travelocity is forecast to follow with 23 percent; and Orbitz is expected to be third with 19 percent.

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