The market is expected to reach $68 billion by the end of the year, up from $57 billion last year, JupiterResearch said. By 2010, the market is expected to grow to $104 billion. JupiterResearch analyst Diane Clarkson said the firm recorded strong increases in revenue across all segments of the industry.
Higher fuel costs, however, will remain a "major challenge" for the travel industry in general, which will struggle to compensate for additional costs while remaining price competitive, Clarkson said in a statement.
Business travel is expected to be a major driver of growth within the overall industry. Online managed business travel is expected to reach $31.5 billion by 2010 from $15.1 billion this year.
By 2010, JupiterResearch expects the online travel market to represent 34 percent of all travel spending in the United States.