Online Travel Market

Travel Planning

Most US internet users (52%) this year opt not to travel this holiday season, according to a survey byAbout.com.  Another 24% said they were even less likely to travel this year than last. The biggest theme for those still planning to travel is spending less money and researching online more.  Two factors that are probably connected, since respondents thought Web research was the single best way to save on travel.

Ways that US internet users are reducing the amount of money spent on leisure travel, September 2009 (% of respondents):
- Researching online for deals prior to travelling: 46%
- Participating in local activities (parks, picnics, festivals): 45%
- Seeking less expensive hotels and accommodations: 36%
- Seeking less expensive meal options: 35%
- Driving instead of flying: 32%
- Seeking less expensive activities: 31%
- Vacationing closer to home instead of overseas: 30%
- I do not plan on travelling at all this year: 25%
- Staying with family/friends instead of a hotel: 25%
- Looking for all-inclusive packages: 23%
- Sharing costs with family/friends: 19%
- Taking fewer smaller trips and saving for one larger vacation: 17%

Money-saving attitudes, unsurprisingly, have an effect on what kinds of ads are most likely to reach consumers. Asked which online travel advertisements they were most interested in, large majorities of respondents wanted coupons on big-ticket travel items: airfare (70%) and hotels (67%). Package deals and discounts on activities and food appealed to nearly one-half of respondents.

Travel industry display ad impressions were up 28% between August and September 2009, according to Nielsen. (eMarketer, November 2009)

The growing number of non-transactional sites has begun to siphon consumers from transactional sites during the earlier phases of travel planning, according to findings from PhoCusWright's Online Traffic and Conversion Report.  The study, conducted in partnership with Compete Inc., found that over the past few years, traffic to non-transactional sites has increased from 29% of all travel category visitations to 33%.  Non-transactional sites clearly play a role in influencing travellers, and impact both traffic and conversion rates on transactional sites.

There are many different types of non-transactional Web site categories, each filling a particular role in the search, shop, buy process:

- Lead generators (such as like TravelZoo and BookingBuddy.com): they represent the largest non-transactional category, though they experienced a noticeable decline in 2009.  These sites received nearly 15 million unique monthly visitors on average in 2Q2009.  The decline in traffic to lead generator sites was likely caused in part by the increased popularity of metasearch sites.

- Meta search sites: this category has sustained substantial traffic increases, contributing significantly to the growth of the non-transactional category as a whole.

- Planning and reviews sites: this category experienced the most dramatic growth trajectory doubling its traffic over two years.

- Travel guides sites: this category has also posted gains, adding over 4 million unique monthly visitors since 2Q2007.

- Destination and tourism category: the only non-transactional category that has remained relatively stagnant.  It consists of destination marketing organizations and other destination-specific travel Web sites.

Non-transactional Web sites are beginning to lessen consumers' reliance on the major OTAs for product information.  This certainly does not mean that OTAs have lost consumer value, but the travel planning process has become less linear over time, with multiple categories of travel sites forming a complex web that leads ultimately to a transaction.

Summary of traffic to travel categories* (monthly unique category visitors):
- 2Q 2007: 71% transactional sites / 29% non-transactional sites
- 2Q 2008: 67% / 33%
- 2Q 2009: 67% / 33%
* Category unique visitors who visit multiple categories would be counted each time they visit a different category.

(PhoCusWright FYI October 2009, October 2009)

Travel Web sites are performing well in the midst of the broader travel industry downturn, according to a study by PhoCusWright Inc conducted in partnership with Compete Inc..

The study shows that monthly traffic and conversion is up in almost all travel categories in the second quarter of 2009, compared to the same quarter of previous years.

PhoCusWright says that despite the downturn, transactional Web sites (i.e., suppliers and online travel agencies) showed strong growth in June monthly visitors year-over-year, with cruise lines up 19% and hotel chains up 13%.  Online travel agencies (OTAs) also showed slight increases in hotel and car rental visitor volume in the first half of 2009 compared to 2008 and 2007. 

The only category to show a decline in traffic from 2008 through 2009 was the OTA air category which is down 15%. This is not reflective of weak performance however, as OTA air conversion has increased significantly over the same time period, says the travel site. 

Carroll Rheem, director, research at PhoCusWright believes that the reliance that consumers have on travel Web sites has not weakened and adds that online channels are attracting, engaging and inspiring travelers who recognize that this year is actually a fantastic time to take a trip. Consumers are certainly spending less, but they are not giving up travel, nor are they turning away from the Web sites that offer them the selection and convenience they value. (Travelmole, September 2009)

Most Americans are still making their travel plans offline, according to the "Travel and Vacation Services-Summer 2009" report from Ad-ology Research. The survey revealed that only some 47% of US adult internet users had used the Web recently to research travel. The most common travel-related topics to check out on the internet included airfare, researched by 34% of respondents, hotel/motel rates and availability (30.8%) and car rentals (14.3%).

US internet users who have used the internet to research travel-related topics, 2009 (% of respondents):
- Airfare: 34.0%
- Hotel/motel rates and availability: 30.8%
- Car rental: 14.3%
- Cruises: 10.3%
- Adventure vacation: 10.0%
- Train travel: 6.3%
- Casino vacation: 4.4%
- Guided tour : 3.8%
- Bus tour : 2.8%
- Out-of-town sporting events: 2.8%
- Travel agent/agency: 2.6%
- Golf vacation: 1.7%
- Other: 1.2%
- None: 52.9%

However, 39% of recent travellers said online media influenced their choice of travel services.

The vast majority (77%) of Ad-ology respondents said social media did not influence their travel or vacation decisions, but there is evidence that travel companies can do well among the 23% who said they were influenced by social media.

According to analysis on the Compete blog, visitors to airline sites in July 2009 were six times more likely to visit Twitter than the previous year. The research firm also found a correlation between airline booking success and the promotion of low fares via the microblogging service. (eMarketer, September 2009)

"hotels.com" was the top search term for the Travel Destinations and Accommodations category in the US in July 2009, according to Hitwise. 

Top 10 search terms for the Travel Destinations and Accommodations category in the US, July 2009:
1. hotels.com: 0.70% of search volume
2. six flags: 0.32%
3. carnival cruise: 0.26%
4. disney world: 0.24%
5. trip advisor: 0.20%
6. cedar point: 0.20%
7. disneyland: 0.20%
8. holiday inn: 0.19%
9. great wolf lodge: 0.18%
10. hershey park: 0.17%
(ClickZ Network, August 2009)

Travellers expected to have the skills of agents are getting fed up with the complicated process of planning and booking a trip, according to a study by Forrester Research entitled ‘Using Digital Channels to Calm the Angry Traveler'.

The growing dissatisfaction with the new do-it-yourself type of travel was evident in the Forrester Research study that found that:
- 15% fewer US travellers enjoyed using the web in 2009 than they did in 2007.
- Just 33% of US online travellers feel that travel websites do a good job presenting travel choices, down from 39% in 2008.

Forrester Research believes that US travellers feel they are taken for granted, indicating that consumers see other websites becoming easier to use (retail websites, banking websites, media websites) but travel is treading water as a category. There are very few travel companies that are really looking to improve the planning and booking process. Instead, customers are forced to figure out extra fees, wade through fine print and understand industry terms like the difference between a deluxe and a standard room, in addition to educating themselves about destinations, flights and hotels. (Travelmole, August 2009)

DiscoverAmerica.com is celebrating its first year as the Official Travel and Tourism Website of the United States by announcing a slate of content upgrades, site enhancements and money-saving deals to help travellers plan trips to the USA.

Traffic to the site and time spent viewing its content has been very favourable in its first year. Daily site traffic increased 254% overall since its initial launch period in the Summer of 2008. Users have spent more than 3 million minutes researching US trips and have viewed four million pages of travel content.

Unique features of the website include the Activity Finder, which houses information on more than 2,600 activities in 24 popular trip categories, such as art galleries and museums, shopping, food and wine, and beaches and coasts. The Interactive Map tool located on the Places page helps users identify approximate distances between US locales.

Created one year ago under a cooperative agreement between the US Travel Association and the US Department of Commerce-Office of Travel and Tourism Industries, DiscoverAmerica.com is actually a suite of international sites designed for travellers from Canada, Mexico, the U.K., Japan and Germany, the top five markets representing about 75% of all inbound visitation to the United States.

Strategic content partners on DiscoverAmerica.com include official sources such as state tourism offices, convention and visitors bureaus, the US Department of State, the US Department of Homeland Security, American Express, Fodor's, Google Maps and Weather.com. (TravelDailyNews, August 2009)

Google released in July 2009 a study entitled "The Traveler's Road to Decision" that reveals consumer research and buying habits across the internet. Consumers rely on search engines throughout the trip-planning process more so than travel search sites, although online travel agencies remain strong with 55% looking for business accommodations vs. 52% for personal.

The study finds that 64% depend on search engines to plan personal trips vs. 56% for business. When it comes to searching for information on hotels, 81% rely on search engines when looking for business overnight accommodations vs. 67% personal; 74% business air travel vs. 59%; 60% destinations vs. 59% personal; and 51% vacation activities vs. 55% personal.

To find the best deals, consumers will search the internet for information more often than any other source. So it would make sense that reviews influence the purchase decision, with 41% revealing they made personal plans vs. 50% for business based on reviews of others.

An increasing number of travellers contribute to these reviews, too. In a similar study conducted in April 2008, only 9% of travellers surveyed had posted a review, 5% commented on a review, and 3% participated in a travel-related blog.

Travel videos have also become important as people plan trips. They help people to visualize the surroundings and make better choices on where to stay and what to do. Videos created by peers are looked upon as being more trusted, compared with the videos that companies create to peddle goods and services. (HOTELMARKETING.COM, July 2009) 

The role of user-generated reviews is exploding. Nearly 1 of 5 North American travellers say they read online guest reviews of hotels before booking and about 1 in 10 travellers will write a review after their stay in Q1 2009, according to the latest Market Metrix Hospitality Index^TM by Market Metrix. The percentage of travellers who read reviews prior to booking a hotel has remained stable for the past year, but the number of persons who are writing reviews about their hotel stay is rising.

Percentage of North Americans travellers who write a "customer review" after their stay:
- Q1 2009: 8.6%
- Q4 2008: 8.4%
- Q3 2008: 7.8%

Based on the results from the latest Market Metrix Hospitality Index^TM, people who write reviews after their stay are happier with their experience compared to guests who did not post a review. And this difference extended to guest loyalty. Guests who wrote a review after their stay were 20% more likely to recommend the hotel and 40% more likely to return, compared to guests who did not write a review. Guests who write reviews tend to be older; guests who read reviews tend to be younger. More leisure guests write reviews of their stay compared to business travellers.

Luxury guests (12.7%) and Timeshare guests (14.3%) were more likely to write reviews. Casino guests were least likely (7.2%) to post a review of their hotel experience. Among all hotels, Affinia Hotels had the largest percentage of guests (35.8%) who posted reviews about their stay. (TourismExchange Company, June 2009)

When travelling domestically, 20% of North Americans will read user reviews before booking a hotel; that number jumps when North Americans travel overseas, according to the latest Market Metrix Hospitality Index^TM by Market Metrix.

When going to Europe, 33% of travellers will look to user reviews for assistance in finding the right hotel. The biggest jump occurs for travellers to Mexico and Latin America where nearly half of travellers will read online hotel reviews prior to making their reservations.

Persons travelling to the Middle East are most likely to write a review (26%) while persons travelling within the US are least likely (8%) to share their experience online. (TourismExchange Company, June 2009)

66% of leisure travellers now use the internet to plan some aspect of their travel (versus 35% in 2000), while 56% now report making reservations online, according to a study by Ypartnership entitled National Travel MONITORSM. Only 1% of travellers commence their search for a vacation destination by visiting a blog.

The nationally representative survey of 1,590 active travellers was conducted during the months of February and March, 2009, and is co-authored annually by Ypartnership and Yankelovich, Inc.

The study finds that US Travellers visit search engines such as Google, Yahoo or MSN first (34%) when considering vacation destination alternatives. The Web sites of specific countries or destination boards are visited next (23%), followed by online travel agencies such as Expedia and Travelocity (22%).

While the percentage of leisure travellers who report making reservations online has grown more than 37% since the year 2000, consumers' search behaviour has changed in recent years as people have become more familiar with search technology and the number of travel planning/purchasing sites has grown exponentially, according to Ypartnership.

Search patterns for selecting an airline or lodging accommodation are understandably different. Consumers who are searching for these travel services first visit the Web sites of online travel agencies (42% and 31%, respectively). Brand-specific sites (41%) follow closely when leisure travellers are selecting an airline, yet significantly less so when they select lodging (21%). Meta search engines that compare fares are visited first by over one-out-of-ten travelers (13%) when selecting an airline. (Ypartnership, May 2009)

More than half of US travellers use the internet to select a leisure destination, according to PhoCusWright's Consumer Travel Report Part One: Behavioral Trends. But consumers use DMO Web sites for far more than just destination selection. Consumers are as active on DMO Web sites after they book their travel as they are when planning and shopping for their trip. Destination marketers are facilitators of travel at all points in the travel planning process and must orient their online services to facilitate pre- and post-booking needs of travellers.

Time between visiting a destination website and completing a booking on a transactional website:
- Book 1-10 days after visiting destination website: 44%
- Book 1-10 days before visiting destination website: 42%
- Book on same day: 14%

PhoCusWright's Destination Marketing: Understanding the Role and Impact of Destination Marketers offers detailed best practices for DMOs to serve all points of the travel planning process. The report provides insight into what travellers are looking for from DMO Web sites during the planning, shopping, booking and post-booking stages, and delivers recommendations for offering online booking or referral services. (PhoCusWright, June 2009)

Webby Awards go to fewer than 15% of the more than 10,000 entries received from more than 60 countries. Pennsylvania's entries visitPA.com and newPA.com were recognized for creativity, functionality and overall excellence.

VisitPA.com is the official travel and tourism site for visitors to the state. In September 2008, the site was redesigned to provide visitors with a more in-depth conversation about Pennsylvania. The more a visitor is engaged, the more likely they are to plan a trip in Pennsylvania.

NewPA.com was designed to be a tool for business decision-makers and community leaders to explore the wide range of programs, resources and business incentives available in the commonwealth.

Established in 1996, the Webby Award is presented by the International Academy of Digital Arts and Sciences, a 550-member body of leading Web experts, business figures, luminaries, visionaries and creative celebrities. (TravelMole, May 2009)

The majority of meeting and event planners prefer social networks that build upon, instead of replace, personal relationships, according to an HSMAI Affordable Meetings West pre-conference survey.

61% of meeting planners attending the 13th Annual Hospitality Sales & Marketing Association International's (HSMAI) Affordable Meetings West Conference & Exposition in California in June 2009, stated that they were engaged on Facebook, and 58% were members of LinkedIn. Networking and maintaining relationships were the top benefits cited. Just 13% said they were using Twitter.

Technology continues to be a top priority in 2009 with 70% of planners reporting an increase in technology use in meetings management and marketing. Of those respondents, 74% commented that the incorporation of the various technologies made their jobs easier. 30% of planners also cited that they would be looking for event planning software suppliers at this year's exposition. (HOTELMARKETING.COM, June 2009)

Search engines continue to be the primary way internet users navigate to key industry categories, according to Hitwise. Comparing April 2009 with April 2008, the travel category showed a 36.82% in its share of traffic coming directly from search engines and 27.91% coming directly from Google.

US category upstream traffic from search engines - April 2009:
- Health and Medical: 46.29% (+1% compared to April 2008)
- Travel: 36.82% (+8%)
- Shopping and Classifieds: 24.04% (-5%)
- News and Media: 21.35% (-2%)
- Entertainment: 26.51% (+11%)
- Business and Finance: 20.91% (+16%)
- Sports: 14.93% (+20%)
- Online video: 36.04% (+25%)
- Social Networking: 17.73% (+6%) 

US category upstream traffic from Google - April 2009:
- Health and Medical: 33.88% (+10% compared to April 2008)
- Travel: 27.91% (+20%)
- Shopping and Classifieds: 17.28% (+4%)
- News and Media: 15.48% (+6%)
- Entertainment: 18.78% (+24%)
- Business and Finance: 15.01% (+29%)
- Sports: 10.88% (+30%)
- Online video: 27.24% (+39%)
- Social Networking: 11.87% (+18%) 

(Hitwise, May 2009)

The US Travel Association, in conjunction with all 50 state tourism offices and more than 100 convention and visitors bureaus, has launched DiscoverAmerica.com. This one-stop travel planning source features special deals and offers. The site's 7,000 pages feature official content on all 50 states, the five U.S. territories, more than 100 cities and regional destinations, and more than 3,000 popular trip activities.

DiscoverAmerica.com compiles the most-trusted and official sources in travel, from state tourism offices and convention and visitors bureaus to agencies such as the National Park Service and Scenic Byways. Other reliable brands in travel information such as American Express, Fodor's, Google Maps and Weather.com are also represented.

It allows users to search activities by time of year or by nine different geographic regions. The site also features an Interactive Map where users may plot the approximate driving distances between two locales; just click and drag the map's points to determine the mileage between any two places on the US map.

DiscoverAmerica.com also hosts a community section.

The website's content is presently available in five languages: English, French, Spanish, German and Japanese. (EyeForTravel, May 2009)

The collective power of the average traveller is now greater than any other online information source, according to PhoCusWright's Consumer Travel Report. Travel 2.0 (Consumer Generated Content) has overtaken expert editorial and even photography.

More specifically, consumers are looking to online travel agency (OTA) user reviews the most-representing a critical component of OTAs' dominance as the traveller shopping tool of choice. 71% of online shoppers typically use OTAs when selecting travel products, and they are reading the reviews where it is most convenient for them.

Influential features in leisure travel planning (incidence of slightly / very influential) among US travellers:
- Traveller reviews on online travel agencies: 50%
- Traveller generated photography/virtual tours: 43%
- Online travel reviews from travel experts: 41%
- Professional photography/virtual tours: 39%
- Travellers review Web sites: 33%
- Professional online travel video: 29%
- Travellers generated online travel video: 28%
- Travel blogs or online travel diaries: 22%
- Social networks / people you know: 22%
- Social networks / people you do not know: 15%
- Travel-related podcasts: 13%
(PhoCusWright FYI - 07/04/09, April 2009)

Travel sites experienced seasonal gains in the US in February 2009 sparked by spring travel planning, according to comScore. The Online Travel Agents category grew 1% to 39.5 million visitors, led by Expedia, Inc. with nearly 23 million visitors. Orbitz Worldwide ranked second with nearly 14 million visitors, followed by Priceline.com Inc. with 9.7 million visitors.

The other travel categories that experienced increases included the Travel - Information category, led by TravelAdNetwork with 10.4 million visitors, and the Travel - Hotel/Resorts category, led by Hilton Hotels with 4.7 million visitors. (HOTELMARKETING.COM, March 2009)

Customer satisfaction with online travel remains unchanged in aggregate year-over-year, though the industry has been slowly decreasing since 2002, according to the American Customer Satisfaction Index (ACSI) report by Foresee. The industry is going to need more than a boost in customer satisfaction in the wake of what industry experts predict to be the worst year for business and leisure travel since 2002, it has been highlighted.

Expedia (+2.7%) and the All Others category (-2.5%) tie for first at 77. Travelocity comes in second place (+2.7% to 75) followed by Orbitz (+1.4% to 74). Priceline.com falls one percent to 72.

Customer satisfaction with the e-commerce sector in general has gone down for the first time in three years, dropping 2% to a score of 80 on a 100-point scale. The decline is driven by a dramatic plunge in customer satisfaction with online brokerages, which were hit hard by the fallout from the financial crisis that erased billions of dollars of investment capital.

The annual ACSI e-commerce report measures customer satisfaction with online retail, online brokerage, and online travel. (EyeForTravel, February 2009)

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Last Updated on Friday, 02 July 2010 16:45