|Online Travel Market|
|Travel Industry Online Developments|
The Middle East travel industry is regaining momentum following the wave of protests and revolutions that swept the region in late 2011. After growing just 3% in 2011, the Middle East travel market jumped 12% in 2012 and will sustain double-digit growth through 2014, according to PhoCusWright.
Online bookings will nearly double between 2011 and 2014, when the region's online leisure/unmanaged business travel market will approach US$16 billion.
The United Arab Emirates (UAE) dominates the Middle East travel market, accounting for nearly half of the region's gross bookings and the majority of its online sales. With its large, diverse expatriate population, the UAE has the highest online travel penetration in the region, and online leisure/unmanaged business travel bookings accounted for nearly one quarter of the country's total travel market in 2012.
Travel dynamics vary dramatically across the Middle East, with cultural differences and technology adoption playing a key role in travel market growth. (PhoCusWright, March 2013)
Fewer tourists are using their computers to access travel information, according to a GiestCentric report and, according to IDC, by 2015 more users will access the internet through their mobile devices than anything else.
Not only are potential customers using their mobile devices to access the internet, but to plan their trips as well. Since 2009 the number of leisure travellers using their mobile devices for travel information has increased by over 450%, according to The 2012 Traveler Study by Google and Ipsos MediaCT.
Percentage of travellers that use a mobile device to search for travel information:
- 2009: 8%
- 2010: 18%
- 2011: 31%
- 2012: 38%
- 2009: 25%
- 2010: 40%
- 2011: 56%
- 2012: 57%
A great deal of these users ends up making their bookings via mobile device. 40% of leisure travellers book using mobile browsers, while only 12% book using apps. 36% of business travellers book using mobile browsers while only 17% book using apps.
Of the seven reasons that led potential customers not to make a booking from their mobile devices, four of them were due to the website's lack of quality, another due to a lack of trust in the security on mobile devices, and the remaining two due to factors outside of hoteliers' control.
In a study conducted by GuestCentric with over 300 hotels, a whopping 60% of smartphone bookings were for same night or next night stay. (TravelDailyNews, January 2013)
Almost half of the mobile hotel bookers surveyed had already left home and were on the road when they made their reservations, according to the findings for Priceline.com's fall 2012 snapshot survey . And free internet access edged out free breakfast and free parking as the hotel perk most important to mobile-equipped travellers.
The survey found that 43% of the mobile bookers who reserved Tonight-Only Deals hotel rooms were in their cars when they booked their room, while 14% said they booked from a remote wi-fi hotspot. Similarly, 40% of those who booked Express Deals rooms said they were on the road when the bookings were made. (HOTELMARKETING, November 2012)
Travel is the largest e-commerce category, led by airline ticket sales, with an estimated $85.7 billion spent online for airline tickets sales in 2012 in the US by business and leisure travellers, according to a study commissioned by the International Air Transport Association (IATA) identifying major trends that are transforming the travel distribution landscape. The Future of Airline Distribution - A Look Ahead to 2017 was written by Henry H. Harteveldt, co-founder of Atmosphere Research Group.
Key findings of the study show that:
- The typical travel shopper visits 22 websites in "multiple shopping sessions" before booking a trip.
- Passengers are more likely than the general population to own smartphones and tablet devices, with substantial growth expected due to these devices' growing capabilities. Passengers show strong interest in using mobile devices to plan and book flights, illustrating their comfort with these devices.
- By 2017, Atmosphere expects 50% of online direct bookings will be made on mobile devices - with even more ancillary purchases made through mobile, given the devices' portability and ease of use.
According to the study, "distribution is no longer an adequate way to think about how airlines must sell their products" because it implies process - "when airline executives instead are increasingly focused on results. That's why, by 2017, what airlines currently call ‘distribution' will be replaced by a focus on channel-based, value-creating commerce."
Atmosphere believes this new approach will be supported by the emergence of "value creation hubs" (VCH). VCHs will represent an evolutionary "pivot" from the current Global Distribution System approach. (TravelDailyNews, December 2012)
Consumers in Latin America are making more and more travel purchases online as individual markets begin to see higher internet penetration. Latin America is to lead all world regions in online travel sales growth through 2016, increasing by more than 30% on a yearly basis through 2013, according to "Internet & Media 101" from September 2012, Barclays Capital.
Online travel sales growth worldwide, 2010-2016 (% of change):
- 2010: 10%
- 2011: 10%
- 2012: 10%
- 2013: 9%
- 2014: 9%
- 2015: 8%
- 2016: 8%
Online travel sales growth by region (2010 and 2016):
- Latin America:33% in 2010, falling to 18% by 2016
- Asia-Pacific: 22% in 2010, falling to 15% by 2016
- Europe: 10% in 2010, falling to 5% by 2016
- US: 5% in 2010, remaining at 5% by 2016
Of course, this exponential growth is coming from an extremely small base-online travel sales in Latin America will only reach one-tenth of the US total this year, Barclays noted. However, that doesn't diminish the fact that online travel is far outpacing total travel sales growth among consumers in Latin America. While total travel sales are expected to be up only 6% in 2012, online travel sales will explode by 35% this year, after a 38% gain in 2011. By 2013, Latin America will surpass Asia-Pacific in terms of online as a percentage of total travel sales.
Online travel sales worldwide, 2010-2016 (billions):
- 2010: $309 billion (35.9% of total)
- 2011: $340 billion (37.1% of total)
- 2012: $374 billion (38.9% of total)
- 2013: $408 billion (40.4% of total)
- 2014: $446 billion (42.3% of total)
- 2015: $483 billion (44.2% of total)
- 2016: $523 billion (46.2% of total)
Online travel sales by regions, 2010 and 2016 (billions):
- US: $139 billion in 2010 (or 54.7% of total), raising to $182 billion by 2016 (or 53.9% of total)
- Europe: $118 billion in 2010 (or 40.4% of total), raising to $176 billion by 2016 (or 50.2% of total)
- Asia-Pacific: $44 billion in 2010 (17.2% of total), raising to $131 billion by 2016 (or 36.8% of total)
- Latin America: $8 billion in 2010 (or 13.8% of total), raising to $34 billion by 2016 (or 39.0% of total)
(eMarketer, November 2012)
Travellers are increasingly comfortable and savvy at planning, researching and booking trips on the go, according to a study by Expedia Media Solutions and comScore. A third of mobile users are planning on the go. Travellers will continue to use mobile to plan travel, but easy-to-use apps will drive usage.
The study examines consumer behaviour on mobile devices and sheds light on the role of mobile in travel research, planning and booking, as well as the unique attributes of the travel demographic. Travellers frequently turn to mobile devices for travel planning - whether conducting aspirational research, planning an existing trip or booking a last-minute getaway. With one out of every ten dollars spent online occurring on a mobile device, marketers who are ripe to target travellers should be adding mobile into their marketing mix.
Travellers frequently use smartphones and tablets to research and plan trips:
- 48% used a tablet or smartphone to plan their trip - while 44% used a mobile device to dream of their next trip.
- 86% of mobile planners already knew their destination when conducting research on a mobile device.
- 47% relied on friend and family recommendations and 40% relied on Online Travel Agencies (OTAs) for destination ideas.
- Deals and promotions (64%), photos (55%) and recommendations (38%) are the most useful types of content for those seeking trip idea.
Travellers are comfortable making purchases on mobile devices:
- Of travellers who own a mobile device, 61% have made a purchase on a tablet in the last six months while 51% have made a purchase on a smartphone, showing that travellers are more likely to purchase travel on tablets versus smartphones.
- Of those who have booked travel on a mobile device, 80% of smartphone users and 90% of tablet users would do so again.
Travelers will continue to use mobile to plan travel, but easy-to-use apps will drive usage:
- Of the 44% who plan travel on a mobile device, 44% used an app.
- Nearly 60% of mobile airline and 56% of hotel bookers used an app to book their reservation.
- Accessibility (43%), ease of use (35%) and app availability (33%) drive travel bookings for smartphone users.
(TravelDailyNews, November 2012)
The online travel industry in the Middle East is flourishing at an unprecedented rate with online bookings growing by nearly a third this year, according to a Travelport co-sponsored study carried out by PhoCusWright.
Findings show that online travel sales in the Middle East will grow 31% from 2011 to almost $10.4 billion in 2012 and are set to reach $15.8 billion by 2014. This means that in 2014, online bookings will make up nearly a quarter (22%) of all travel bookings made in the region.
The research also shows the rapid development of regional Online Travel Agencies (OTAs), which are growing at a Compound Annual Growth Rate of 18% between 2010 and 2014. In 2011, 39% of all online bookings in the Middle East were made via OTAs and the gross booking value via OTAs is set to nearly double from $3.1 billion to $6 billion by 2014.
Rabih Saab, President and Managing Director, Middle East and Africa, Travelport said that the Middle East is one of the world's fastest growing tourism destinations and source markets, and the online potential is immense.
Air remains the strongest category online, accounting for 67% of all online travel bookings in 2011. Online hotel sales in the Middle East accounted for 32% in 2011 and car rentals made up the remaining 1%. Notably, 59% of all online hotel bookings were made through OTAs as opposed to direct bookings via hotel websites. (HOTELMARKETING.COM, October 2012)
The BRIC countries will have four of the five fastest-growing online travel sales markets during the 2011 to 2016 period, according to an eMarketer report ‘BRIC Travel Markets in Transition: Trends Influence Overall Ecommerce'. India's five-year compound annual growth rate of 30.6% will put it at the top the group.
Online travel sales in BRIC, 2010-2016 (billions):
- 2010: $26.48 billion
- 2011: $40.00 billion
- 2012: $52.91 billion
- 2013: $65.11 billion
- 2014: $75.78 billion
- 2015: $84.96 billion
- 2016: $93.65 billion
Online travel sales Compound Annual Growth Rate (CAGR) in selected countries, 2011-2016:
- India: 30.6%
- South Korea: 19.8%
- Brazil: 18.2%
- China: 14.1%
- Russia: 9.8%
- Australia: 7.4%
- US: 7.2%
Online travel sales in these countries anchor an overall shift from offline to online purchasing among consumers in their respective markets. Brazil, Russia, India and China have distinct differences in volume of online travel sales and by marked variations in consumer behaviour.
Among the pronounced trends differentiating the countries:
- In Brazil, there is a narrow choice of travel products, which has limited consumers to primarily domestic travel.
- Russia has by far the lowest online travel sales of the emerging countries, despite high GDP. But consumers there are avid internet travel researchers.
- In India, consumers have been slow to adopt ecommerce generally, but travel is the exception. Online travel purchasing makes up more than three-quarters of overall ecommerce sales in India.
- The number of online travel bookers in China is low in comparison to the number of overall ecommerce buyers. But at $48 billion, according to eMarketer estimates, consumers in China will spend more on online travel in 2016 than the rest of BRIC combined.
While it's clear that the BRIC countries share key characteristics as emerging markets, each has disparate digital and demographic trends affecting increases in online travel purchasing. (eMarketer, September 2012)
Mobile payment systems have the potential to provide significant benefits to business travellers, as well as travel managers. New technologies such as mobile wallets, near-field communication (NFC), along with a proliferation of travel apps, can streamline both the purchase and expensing process for business travelers. But customers' and businesses' lack of familiarity with these new tools remains a significant stumbling block for adoption.
In March 2012, travel management service provider Airplus International and the nonprofit Association for Corporate Travel Executives (ACTE) surveyed ACTE's worldwide corporate members. They found that the majority of respondents, 53%, described themselves as beginners on the subject of mobile payments, with little or no knowledge of how they worked. And while 41% said they had moderate familiarity with mobile payments, only 6% described themselves as highly familiar with the technology.
Adoption of mobile payment systems is still not even on the radar of most business travellers. More than seven in 10 respondents said employees were not using mobile phones as a payment mechanism for travel-related costs. Of those that were using their phone to make payments, the most popular action was paying for restaurant meals (42%), followed by ground transportation (33%), airplane tickets (25%) and then rail tickets (17%).
Security is also a potential impediment to the adoption of mobile payment systems by business travellers. Fully 92% of those polled thought that the security of a plastic corporate payment card was either acceptable or excellent. Respondents' lack of familiarity with mobile payment systems may have translated into unease regarding security. Almost six in ten respondents said they either didn't know how safe mobile payments were, or thought they were less secure than traditional plastic cards.
While the adoption of NFC-enabled phones is likely to surge in the next few years, one major stumbling block will be the adoption of readers by vendors. Merchants will probably wait until pressured by consumers to invest in the infrastructure needed to process NFC payments made via mobile devices. Customer demand will certainly rise soon-a February 2012 survey by payment processor Worldpay found that 58% of consumers worldwide were interested in paying for flights in the future using a mobile device. (eMarketer, July 2012)
Price was the main barrier to travel bookers worldwide completing online reservations, according to a Q4 2011 report on worldwide visitors to travel and hospitality websites by iPerceptions.
According to the survey, 30% of those who visited a site to make a booking (but did not complete one) said price was the reason they stopped shopping. But after price, functionality and site design were among the biggest stumbling blocks for prospective customers. iPerceptions found that 12% of those who did not finalize a reservation experienced a booking problem, while 8% gave up after being unable to find the information they sought.
Barriers to task completion on hospitality/tourism sites according to travel bookers worldwide, Q4 2011 (% of total):
- Price: 30%
- Still looking / unsure: 14%
- Booking problem: 12%
- Room availability: 11%
- Ran out of time: 9%
- Could not find what looking for: 8%
- Need more info: 5%
- Technical issue: 4%
- Other: 7%
Of those who visited a travel or hospitality site, 26% said they did so to make a reservation. One in five arrived at a site in search of information about hotels, and the same percentage of respondents said they were looking for price information.
Purpose of visiting a hospitality / tourism site according to site visitors worldwide, Q4 2011 (% of total):
- Make reservation: 26%
- Find hotel info: 20%
- Compare rates: 20%
- View / cancel reservation: 7%
- Other: 27%
When iPerceptions broke down the data, it found that leisure travellers sought out information about hotels or prices more often than did business travellers. Additionally, business travellers were more likely than vacationers to complete a reservation.
The highest percentage of respondents, 28%, said they arrived at a website by typing in a web address. But search was a close second, at 27%.
Path used to get to hospitality / tourism sites by site visitors worldwide, Q4 2011 (% of total):
- Typed in URL: 28%
- Search engine: 27%
- Bookmark / favourite: 17%
- Clicked on ad: 3%
- Email link: 1%
- Other site link: 1%
- Link from friend: 0%
- Social network link: 0%
- Other: 22%
Visitors who arrived at hospitality and tourism sites via search were slightly less satisfied with their experience, but this is not surprising since they were likely to be navigating the sites for the first time. (eMarketer, May 2012)
17% have researched a trip on a mobile app or mobile website, according to INFOGRAPHIC from My Destination.
Some of their other findings include:
- 12% have downloaded a mobile app related to travel.
- 3% have booked their trip on a mobile.
- Two thirds say they are likely to explore, shop and book travel activities ia their mobile devices.
(tnooz, May 2012)
Online travel bookings will represent almost a third of worldwide volume by the end of 2012, according to yStats.com "Global Online Travel Report 2012" report.
The report indicates that the trend to book travel arrangements online will continue in 2012 - especially in emerging economies such as China, India and Brazil. The study found that in 2011, the value of the US online travel market was still higher than that of Great Britain, China, India and Brazil combined.
Online travel arrangements continue to gain in popularity across the entire American continent. Compared to 2011, revenue generated in the US online travel market is forecasted to grow in 2012 by a low double-digit percentage figure, according to Hotelmarketing.com.
Clients who bought travel products online in 2011 made most purchases through online travel agents, amounting to almost 50%, followed by search engines and websites of tour operators. In the category mobile bookings, hotels were booked most frequently, followed by flights and travel packages. (Travelmole, March 2012)
Mobile travel bookings are expected to triple by 2013, according to PhoCusWright. The number of mobile users researching travel via their mobile device in the US alone is expected to grow by 51% in 2012, according to Google. (Travelmole, March 2012)
A Mashable's infographics shows the progression of online travel, from its roots in old electronic booking systems to the newest and shiniest deals websites. It also provides an inside look at how users behave while on online travel sites and where they love to go.
Some of the findings featured include the breakdown of channels used by active travellers to book travel in February 2011:
- Online travel agency: 62%
- Branded supplier site: 46%
- Meta search site: 14%
- Collective buying site: 5%
- Private sale site: 5%
- Offline travel agent: 9%
(HOTELMARKETING.COM, February 2012)
More than half of all leisure travellers and nearly three in four business travellers now own a smartphone, according to a comprehensive analysis of mobile traveller behaviour from PhoCusWright "Mobile Hits the Mainstream: Leisure and Business Travel Trends".
The report finds that 28% of leisure travellers who conduct travel-related activities via the mobile Web only use mobile websites to do so, while 72% use some combination of mobile websites and apps (none use apps exclusively). And this channel mix changes significantly, depending on whether consumers employ smartphones to research or book travel, or to engage in post-purchase activities. Owners of smartphones with different operating systems also behave differently. BlackBerry users conduct an average of 4.5 travel-related mobile Web activities per year, while Apple users are typically more engaged with 5.7.
It's time the travel industry got past the idea of mobile as just a piece of hardware. It's a maturing medium, with different travellers engaging in different ways for different reasons, according to Carroll Rheem, director, research at PhoCusWright. (PhoCusWright, February 2012)
The US lead in online travel penetration has come to an end, according to PhoCusWright's "U.S. Online Travel Overview, Eleventh Edition" report.
Online travel penetration in leisure/unmanaged business travel, measured in percentage of gross bookings, stood at around 39% in the US in 2009 compared to around 32% for Western Europe, according to the study. But, by 2013, Western Europe would lead the US 41% to 40%, the study projects.
Online travel penetration by regions, 2011:
- US: 39%
- Western Europe: 38%
- Asia-Pacific: 23%
- Latin America: 18%
It is interesting that online penetration in Asia-Pacific as a whole is still relatively low at 23%, despite strides in mobile adoption.
One of the report's authors, Douglas Quinby, senior director of research, explains that mobile is happening in various APAC countries, although adoption varies widely by country and doesn't necessarily represent smartphone adoption. Increased smartphone adoption in APAC would assuredly boost the region's online travel penetration numbers in the coming years. (tnooz, November 2011)
Errors in areas such as pricing, user experience and product were directly contributing to lost travel sales, according to a research analysing feedback data from nearly 8,000 online travel buyers.
1. Price - The search for lower prices was a constant theme, underlining the need for the best presentation of all pricing options. Meanwhile, feedback was also focused on disparities between advertised prices and those found on the sites themselves.
2. Site functionality - Access to time saving functionality was an important consideration, whether this be features such as records of saved searches or previous bookings.
3. On-site search - Site search for travel companies needs to be able to cope with a broad range of uses, from the first time visitor researching destinations through to a converting buyer looking for specific deals. Search functionality needs to be presented accordingly.
4. Product description - Information about travel products, including text, photos, videos and reviews, is vital in the purchase process and so ensuring it is adequate and well displayed is vital to retail success.
5. Additional charges - Whilst EU law dictates that prices must now be displayed with all additional costs included, the presentation of these costs is still a consideration for many consumers and optional extra charges should be set in line with competitors.
6. Navigation - Complaints around navigation focused on a lack of basic sorting and filtering functionality, enabling consumers to home in on the holiday of their preference quickly and easily.
7. Discounts/sales - In this economic climate consumers are more focused than ever on securing the best price for a holiday. Last minute offers or dedicated bargain sections were sought by buyers, along with loyalty rewards for regular customers.
8. Errors and bugs - Site errors not only cause short term frustration, they can permanently damage a site's reputation with buyers. Simple issues such as browser compatibility can completely exclude some buyers from a site.
9. Speed - The slow loading of pages, and particularly of search results, was a major irritant for travel buyers. Given that most buyers will be looking at multiple sites, a slow loading page can be a significant disincentive to purchase.
10. Availability - Users become frustrated having invested the time into searching for products only to find that these are not available to purchase. Sites need to ensure that unavailable products are flagged as such at an early stage.
(HOTELMARKETING.COM, November 2011)
Whilst mobile services are still emerging in the travel industry, it is apparent that travellers are clearly beginning to expect, demand and adopt them with 16% of travellers surveyed currently using smartphones to book trips, according to an Amadeus Report entitled "The always-connected traveller: How mobile will transform the future of air travel". That figure rises to 18% amongst the 18-35 age group and to 33% amongst frequent travellers. In addition, 3.4% of all travellers use their mobiles today to check-in for their flight, with this figure rising to 7.4% in Asia.
Julia Sattel, VP, Airline IT, Amadeus commented that mobile continues to shake-up how companies interact with and meet the needs of customers. It provides travellers with a personal, always-connected device that offers unlimited potential to transform how people travel. The challenge for the industry is to deliver an intuitive and compelling mobile user experience and services that help travellers get the information they want and buy the things they need. (Amadeus, June 2011)
PhoCusWright estimates that in 2012, Europe will become the largest online travel sector, while Asia-Pacific will account for roughly 20% of the market worldwide, according to PhoCusWright analyst Clement Wong at the WebinTravel conference in Singapore. (tnooz talking travel tech, October 2011)
Accommodation owners cited online marketing (63%); social media (39%); mobile (27%); email marketing (22%); and paid listings on user-generated review sites (17%) as the top areas in which they would prefer to increase spending, according to TripAdvisor's latest Accommodation Owners Survey.
With mobile marketing a major focus for owners, 84% of survey respondents said it is important to offer a program that allows travelers to book their inventory using mobile devices. However, the results varied by property type: 92% of hotel owners, 77% of B&B owners and 77% of innkeepers said a mobile marketing program is important.
Of the survey respondents with a social media program, the majority (60%) said that TripAdvisor is the most effective social media site for marketing their properties. Facebook (22%) and Twitter (16%) were the next most effective sites for marketing their properties, according to owners taking the poll.
The top reasons owners cited for using social media were posting deals/special offers (54%), answering customer care questions (48%), promoting events (40%), sharing general industry news (26%) and promoting contests (18%).
Survey respondents cited industry research/reports (46%), competition (30%) and marketing from social media sites (24%) as the top three factors in their decision to use social media as a marketing tool.
According to survey respondents, most owners (76%) use their property website to market deals to potential guests. Email (52%) and social media (44%) were the next most commonly used methods for marketing deals, followed by user-generated review sites (25%) and online travel agencies (21%). (abouTourism, June 2011)
Google projects that 8% of mobile users will be booking travel from their smartphones by 2012. The travel industry believes that with the way bookings have migrated from offline to online over the years, one can expect to witness migration of a certain percentage of online travel bookings to move from desktop to mobile in the time to come. Also, it would not come across as a surprise if many travellers who currently use offline channels go directly to using primarily mobile devices to make their bookings.
The industry expects travellers to continue to adopt smartphones and tablets at a rapid pace in 2011. As mobile payment instruments continue to gather steam, there's a huge opportunity for developers and suppliers to remove friction for travellers, and, as a result, shift a significant purchase volume from the desktop Web to mobile devices.
Travellers are going to feel more empowered than ever as 2011 progresses. Google reports 300,000 new Android activations per day and eMarketer notes that 50% of all new internet connections worldwide are coming from mobile devices. The number of searches in the travel category via a mobile device continues to rise this year; the percentage of queries coming from mobile devices now makes up 19.5% of all hotel queries. Quite notably, people aren't just searching with mobile; they are actually completing transactions from their devices. The number of mobile bookings in the travel space has accelerated from $20 million in 2008 to over $200 million in 2010. (eyefortravel, May 2011)
When considering online travel penetration, bigger isn't always better. In fact, travel companies seeking the highest growth opportunities should look to travel markets with online penetration below 35%, according to PhoCusWright's Global Online Travel Overview Second Edition. Once a travel market's online penetration passes this point, growth in online travel share is likely to slow to single digits.
PhoCusWright analyzed 18 individual markets in four major regions - Europe, US, Asia-Pacific and Latin America - and found only three travel markets with penetration rates above the critical 35% level. While the US, UK and Scandinavia have reached the tipping point, the remaining fifteen markets have significant growth potential, including those in Asia Pacific and Latin America.
In Scandinavia, which broke the 40% penetration mark in 2010, online penetration is projected to grow just two percentage points over the next two years. In comparison, one of the fastest growing markets, Colombia, has online penetration of just over 4%. With growth rates likely to slow as more countries surpass the 35% tipping point, the global online travel opportunity is clearly not limitless. However, a majority of global online travel markets have a long way to go before reaching maturity. (PhoCusWright FYI, May 2011)
Travellers will book one third of the world's travel sales online by the end of 2012, according to PhoCusWright's Global Online Travel Overview Second Edition report.
Online leisure/unmanaged business travel bookings will grow twice as fast as the total market, to surpass US$ 313 billion by 2012.
The report compares four major regions - the US, Europe, Asia Pacific and Latin America and reveals that the global travel industry is still recovering from the 2009 recession, which triggered a 13% decline in global sales.
PhoCusWright projects that global travel bookings will increase 6% in both 2011 and 2012, at which time the market will recover from 2009 losses.
Among the four regions studied, the US and Europe represent more than three fourths of all online sales, but less than two thirds of total travel sales. As online travel bookings in the emerging markets of Asia Pacific and Latin America accelerate, combined share for Europe and the US will fall to 73% in 2012 and continue to decline thereafter, according to the report.
As online penetration growth in the more mature US and European travel markets slows, travel companies are looking to the Asia-Pacific and Latin America regions for the next pot of gold. In these emerging markets, macro-economic gains, increased travel and growing technology adoption will continue to fuel significant growth in online bookings. (Travelmole, April 2011)
Online travel and tourism is poised to "experience solid growth" over the next five years - with the Middle East and Africa leading the way in percentage terms, according to a report by Euromonitor International at the World Travel Market (WTM) Vision Conference-Dubai in May 2011.
Air remains the strongest online category, accounting for more than 50% of sales by value in North America and Australasia in 2010. For the Middle East and Africa, air represented around 10% of value sales in 2010. However, between 2010 and 2015 air will experience a 13% compound annual growth rate in the region, alongside Eastern Europe, the strongest online growth figures in the travel and tourism global overview report.
Online hotel sales in Middle East and Africa over the period will grow by more than 12%, sharing the top slot with Latin America, which sees the same growth rates for accommodation.
The growth figures for North America are in single digits for air and hotels at 6% and 4%, respectively.
The Middle East is one of the world's growing tourism destinations and source markets and this growth is replicated online over the next 5 years with web sales across both air travel and accommodation increasing dramatically, according to Euromonitor International Travel and Tourism Industry Analyst Nadejda Popova.
In the mature online market of Western Europe, hotel sales still represented a worthwhile opportunity. Social media is another opening, particularly as airlines such as Delta and easyJet now have transactional Facebook pages.
However, the study also identified potential negative factours. Popova warned the trend for suppliers to focus on direct sales could "increase conflict" between distribution channels. The report also outlined that high profile bankruptcies and subsequent consumer protection issues could impact consumer sentiment for dynamic packaging operators.
Furthermore, online travel agents' inability to offer "the personal touch" during the holiday sales process, and ongoing technical difficulties in arranging complex itineraries, are seen as other headwinds. (eTN Global Travel Industry News, May 2011)
More than half of business customers now use mobile technology when it comes to searching and booking hotels, indicating a rapid increase in the use of mobile technology in the business travel sector, according to research by Travelport.
The survey, which polled over 600 corporate travel buyers, agents, hospitality and travel professionals globally, explored hotel experiences and expectations of the modern business traveller. Notable response findings from the 150 respondents were:
- 80% would like to see mobile applications offering suggested restaurants and bars around the hotel location
- 67% would like similar apps offering suggestions for recreational activities.
- 71% rank Wi-Fi as one of the most important technology solutions that should be included as standard in hotel rooms - 82% of travellers expecting this service to be in all rooms within five years.
- 54% wanted more transparency and choice when it comes to charges for optional extras
- Many in the poll commented that they should only have to pay for the services they really want or use when travelling for business
- There was limited appeal for mobile apps which could record TV channels remotely or convenience solutions like the ability to adjust the temperature of the room when away.
(HOTELMARKETING.COM, March 2011)
The growing complexity of travel web sites in the past two years was cited as a major reason why more travellers would use a travel agent if they could find one, according to a Forrester Research study. Time-stressed consumers are other reason for the shift.
In 2008, 23% of leisure travellers in Forrester's Technographics Travel Online Study agreed with the statement, "If I could find a good offline travel agent to work with, I would." That number increased to 28% in 2010. Perceived value was another reason for the change.
Most leisure travellers are telling us that websites are not helping them find the value they are looking for, according to Henri H. Harteveldt, vice president and principal analyst of airline and travel research for Forrester. (Travelmole, December 2010)
People go on holiday for a variety of reasons, but research shows the kind of holiday we want is linked to our personality type, according to Graham Jones, an internet psychologist and author specialising in how customers interact with the web.
People who are introverted, who tend to be fairly fixed in their job and who have what you might call a "solid" home life are the ones who seek a "get away from it all" kind of holiday. But individuals who are dynamic, who socialise a great deal, who are often out and about, are faced with so many new experiences every day, they want something more daring, exciting, thrilling.
That kind of basic difference between holiday makers is also reflected in the kind of experience they want online when booking their travel. The introverted individuals want to see something that is clearly "get away from it all", but the extroverts, the dynamic people need to have an exciting website, with lots of different stimulation. These people live life in the fast lane, and they want their websites to be the same.
Holidaymakers want one of two things - an escape or a new experience. Online, the website must match those desires if it is truly to connect. But it must do more than that. Travel websites also need to enable trust and confidence - which are powerful motivators in ebookers. Equally, travel websites need to establish social proof and provide a method of potential customers gaining social acceptance. (tnooz - talking travel tech, November 2010)
One in five people are booking their holidays just five days before they stay, according to a survey undertaken by hotelbook.com. It is thought that the reason for this is because more and more people are looking for better deals and are waiting until the very last minute to do so.
The results, provided by hotelbook.com, also suggested that many people often book their flights early to secure a lower price but choose to wait until closer to the travel date to secure accommodation at discounted rates. (TravelDailyNews, November 2010)
China, India and Brazil are emerging online travel marketplace as demonstrated by those data put together by PhoCuswright for comparison purpose:
% of population online / Mobile penetration / % travel booked online / value of online travel market:
- China: 32% / 58% / 18% / $11 billion
- India: 4% / 36% / 25% / $4 billion
- Brazil: 38% / 92% / 20% / $4 billion
- USA: 74% / 91% / 40% / $93 billion
- UK: 74% / 129% / 47% / $26 billion
Online travel spending rose during the first? half of 2010 after dropping for the first time ever last year. Consumers' online travel spending in the first six months of 2010 rose 5% from a year earlier. Online travel spending fell 5% for all of last year; the decline was a first since ComScore began tracking online travel.
ComScore said there was a rebound in travel demand, plus the internet increased its share of the overall travel pie. Online spending growth for travel and non-travel purchases regularly topped 15% during the years up to 2008, when growth slowed to 7%. In 2009, online spending fell 2%, according to ComScore.
ComScore tracked about 2 million internet users last month for its poll. The company tracked spending at online agencies and supplier websites. (Travelweekly.com, August, 2010)
16% of people booking travel on Expedia sites booked on Monday, particularly between 7-9pm, according to an Expedia Travel Bookings Report, based on search and booking data across 19 Expedia sites worldwide. Only 1 in 10 waits until the weekend and book on a Saturday, while Sunday is the quietest day for activity on the site. (HOTELMARKETING.COM, June 2010)
Europe's travel market took a hit in 2009. Total spending on non-business travel was an estimated €214 billion ($300 billion) in 2009, down from €239 billion ($335 billion) in 2008, according to the most recent "European Online Travel Overview" by PhoCusWright and PricewaterhouseCoopers (PWC),
These losses were limited to offline channels, however. Online sales fared far better, rising 0.4% to remain at about €68 billion ($95 billion).
As a result, the internet accounted for about a third of European spending on leisure travel in 2009, up from 28% in 2008. Despite this healthy rise, Europe still lags well behind the US in the proportion of non-managed travel revenues realized on the internet. Online transactions were expected to contribute at least half of the US total in 2009, according to earlier projections by PhoCusWright.
Online travel revenues in Asia-Pacific, Europe and the US, 2006-2010 (% of total travel):
- 2006: 49% (US) / 23% (Europe) / 9% (Asia-Pacific)
- 2007: 52% / 27% / 11%
- 2008: 51% / 33% / 14%
- 2009: 56% / 37% / 18%
- 2010: 59% / 43% / 21%
One reason that online travel spending in the European region has not kept pace with US spending is that consumers' habits have varied widely among countries in Europe, according to PhoCusWright and PwC. While an estimated 44% of all leisure travel by UK residents was bought on the Web in 2008, the proportion was much lower in Germany (24%), Spain (19%) and Italy (14%). The average across the European countries surveyed was 28%.
Similar variations were seen in specific sectors, such as sales of airline flights. Here too the UK topped the table, with an astonishing 71% of spending on flights taking place online in 2008. In Scandinavia (considered as one entity) the Web claimed an estimated 50% of airfares, compared with 44% in Germany, 31% in Spain and 28% in Italy. The European average was 43%.
Overall, figures from the report suggest that during 2009 Web users in some European countries may have been more likely to plan travel on the Internet than their US counterparts. For example, 60% of survey respondents in France said they went online "always" or "often" to compare travel prices, while 56% researched accommodation and 54% used the Web to choose a destination.
By contrast, Ad-ology Research found that relatively low percentages of US Web users ages 18 and older went online to investigate travel-related subjects in 2009. Airfares were the most popular travel-related topic, with 34% of respondents saying they had recently checked out flight costs online. But less than 31% of internet users said they had searched for information on rates and availability at hotels and motels.
We should avoid reading too much into data from a single year, though. For most Americans, 2009 brought the greatest pressure on individual and household budgets in living memory-and many people cut back sharply on leisure travel to economize. (eMarketer, January 2010)
Last Updated on Monday, 20 May 2013 14:31