Organising global air travel has never been so simple. An increasing number of people is switching to the Internet to book their holidays directly, instead of pursuing the more traditional and costly route of booking through a travel operator.

So much so, that market research firm, Forrester Research, has revised its prediction that the online travel industry will net revenues of $7.4 billion (£4.9 billion) in 2001, and almost trebled it to $20.7 billion.

Within a matter of minutes, users can check the cheapest air fares available, search for hotels in the area they plan to visit, see photographs of the rooms, and call up a town map to peruse some of the local attractions.

The implications for the traditional travel industry are causing considerable unease, as travel agents struggle to find a new role. Last month the Irish Travel Agents Association (ITAA) held a one-day Internet Conference at the Royal Hospital, Kilmainham, in an effort to assess the industry's options.

"We feel that electronic commerce will be a real opportunity for the small Irish travel agent," says an ITAA spokesman. "We are actively encouraging our members to embrace the technology to communicate more effectively and increase their efficiency."

However, of 350 association members, only one-fifth currently use email and 10 per cent have their own websites.

Last week, at Internet World in the RDS, Dublin, the travel industry was again presented with a barrage of statistics about its future. Mr Declan Boland, group manager of IBM travel distribution, painted a grim picture.

"Travel agents have to reinvent themselves based on a business plan, he said. "There are 35,000 travel agents in the US, and it's estimated by next year at least 10,000 will be out of business," he said. "Travel providers are cherry-picking travel agents for their future strategy. Smaller agents will become information gatherers, with only enough work to sustain a classic second-income job."

Much of Mr Boland's presentation centred heavily on IBM's role in shaping the travel trade's future. He concentrated primarily on the large airlines IBM is working with. Seventy-six per cent of the top 75 airlines, hotel companies and car rental companies in the US offer electronic booking services, and Mr Boland estimated they were cutting the costs of face-to-face interaction with customers from 15 to 3 per cent.

This is the greatest consolation to travel operators. Even the smallest agent can establish an online presence reaching international markets. The electronic cost of processing a ticket is under £5, compared with £20 to £30 through human administration.

If customers perform booking and timetable functions online, the agent has more time to personally handle more lucrative packages.

Gradient Solutions, an Irish company, helps travel companies distribute their products electronically and at low cost to their customers using Web and CORBA technologies. It specialises in connecting websites to global computer reservation systems, including Sabre, Galileo and WorldSpan.

Mr Stuart Coulson, director of technology at Gradient Solutions, believes travel agents that do not embrace new technology now will pay dearly, but he maintains the same technology is offering a low-cost distribution tool to small travel agents on a shoestring budget.

"The Internet simply builds on top of travel vendors' will to get closer to their customers. Today everybody is trying to sell to everybody, there are no longer strict distribution channels," he says.

"The key is to specialise in particular types of travel, and reduce generic products that can be bought anywhere on the Internet."

Mr Coulson advocates selling entire experiences over the Internet. For example, scuba-diving holidays, golfing weekends, and St Patrick's Day trips. In such cases the travel agent can become a one-stop-shop for planning such an event, particularly if it is an area of personal expertise as a hobby or sport they enjoy.

This value-added approach is not new to the travel industry. Airline commissions to travel agents started being reduced before the Internet ever posed a threat. Many US travel businesses have responded by becoming travel portfolio managers, organising complete corporate travel packages for companies willing to outsource this activity. Travel operators who previously relied solely on airline commissions for revenue have shifted the income focus to fee-based services for corporate clients.

One such company, Travelforce, founded by Irishman Mr Niall Hickey, only targets companies with large, annual air-travel spends. Instead of taking the airline's commission of around 9 per cent, Travelforce deducts it from the client company's overall bill for administration and consultancy costs.

Occasionally, the client is actually credited with money, but as airline commissions continue to fall the expense will increasingly lie with the client company. Meanwhile, Travelforce is building a strong client base which will rely on it for all its corporate travel needs.

Mr Hickey says the benefits are immeasurable. "From a salary bill of about £1 million per annum, I would predict savings this year of about 30 per cent.

"Our overheads are reduced as clients increasingly use the technology to make bookings. Though I believe there will always be a demand for a localised service, the traditional travel agents livelihood will be under threat unless it adapts."

The ITAA has established an expert technology group to examine the way forward now for traditional operators. It understands that diversification and specialisation will be crucial to survival.

However, it maintains the travel agent will always offer independent, unbiased advice to clients on a variety of travel products, in particular leisure trips which can prove complex and time consuming for individuals to organise.

At present, European customers seem reluctant to book and pay online for flights. British Airways, which takes Internet bookings in 71 countries and accepts online credit card payment in 30 of these countries, was only receiving about 100 such bookings per month early this year.

However, there is widespread acceptance in the industry this is just a lead-in period as the travel industry in the US has already proved itself one of the best suited business models to online commerce. Two leading online agencies, Travelocity, an arm of the Sabre computer reservations system, and Microsoft's Expedia, are on track to generate about $300 million in revenues between them this year.