The Internet has become a popular destination for Chinese travelers trying to make their travel arrangements. According to a new study, up 72 percent from the previous year, and is expected to double to 5.7 million users in 2008.

China's online travel market was worth an estimated 1.54 billion yuan (US$204) in 2006, recording a growth of 82 percent from 2005, according to a month-long study recently released by Shanghai-based iResearch Consulting Group.

The report revealed that at least 2.75 million Chinese travelers booked hotel rooms, air tickets and other travel services on the Internet, up 72 percent from the previous year, and is expected to double to 5.7 million users in 2008.

"Currently the market is still small, less than 1 percent," said Dai Bin, professor at Beijing International Studies University. "But, there is a huge potential to develop this market."

According to Hu Guodong, manager of the Internet Department at Beijing UTS International Travel Services, travel agencies operate on a very “thin” profit margin. "Banks have to offer better terms to make online payment (at 1 percent) more attractive compared to swiping a credit card (at 0.1 percent),” Guodong said.

Despite the phenomenal growth in online travel bookings in China, the Internet is still seen as a medium for travel information, while payment is completed offline in the traditional method, according to the study. "The online market is still controlled by a few companies."

The data collected for the survey came from approximately 60,000 Internet users across China.