Table of Contents
Executive Summary
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- The issues
- Online booking dominates, suppliers more likely to win the final transaction
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- Figure 1: Typical travel booking methods – Online versus offline and direct versus third party, March 2016
- More important than price, good experiences drive repeat use of travel booking sites
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- Figure 2: Most recent travel booking considerations – Top three, March 2016
- Lack of differentiation among leading OTAs
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- Figure 3: Perceptions of select online travel agencies – Scatter plot, indexed to average, March 2016
- How important is mobile for travel booking?
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- Figure 4: Most recent online travel booking method, March 2016
- The sharing economy emerging to be a contender
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- Figure 5: Attitudes toward Airbnb, by household income, March 2016
- The opportunities
- Room for innovation in travel booking online and on via mobile devices
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- Figure 6: Select attitudes toward travel mobile apps, March 2016
- Don’t discount the value of travel agents
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- Figure 7: Attitudes toward travel agents, by generation, March 2016
- Email subject lines, frequency needs to be individually tailored
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- Figure 8: Attitudes toward email marketing, March 2016
- What it means
The Market – What You Need to Know
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- Travel booking is a fragmented market across method and platform
- Travel booking growth expected to continue
- Macroeconomic indicators support growing travel market
- Millennials are key consumers of the travel booking market
- Seasonality and mobile booking will be key drivers
Market Breakdown
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- Travel bookers have a variety of options
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- Figure 9: Typical travel booking methods – Online versus in person nets, March 2016
- Booking online direct is dominant, OTAs compete to increase share
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- Figure 10: Typical online travel booking methods – Direct versus OTA, March 2016
- OTAs a dynamic market – Expedia dominates in the US
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- Figure 11: US online travel agency market share, 2013 and 2016 (est)
Market Perspective
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- Vacation and tourism growth to continue at 3-4% per year
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- Figure 12: Best- and worst-case forecast value sales of vacations and tourism, at current prices, 2010-20
- Millennial travelers propel growth in travel booking
- Seasonality is a key driver of travel booking
- Domestic business travel has slowed
Market Factors
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- Despite some reservations travel spending will continue to grow
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- Figure 13: Consumer Sentiment Index, January 2007-March 2016
- Mobile phone apps expected to drive travel booking sales
Key Players – What You Need to Know
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- Accommodations, tours, and activities are important aspects of OTA portfolio
- A mixed portfolio for OTAs
- ePerformance analysis sheds light on OTAs’ email marketing strategies
- Mobile for travel booking and travel apps yet to make their mark
- Personalization and advertising on visual social media platforms has potential to drive travel booking
Online Travel Agency Spotlight
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- Overview
- Priceline Group
- Expedia, Inc.
- TripAdvisor, Inc.
- Email strategies of top OTAs
- Email distribution centers around the middle of the week
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- Figure 14: Distribution of top OTA email volume, by day of week, January-March 2016
- Distinct strategies revealed based on day of week analysis of email volume
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- Figure 15: Brands’ top mailing days, day of the week, January-March 2016
- Unique brand strategies also reflected in proportion of daily email volume, by brand
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- Figure 16: Proportion of daily email volume, by brand, January-March 2016
- ePerformance overlap and read rate analysis
- Priceline.com has tight competition from Expedia and Travelocity
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- Figure 17: Priceline.com ePerformance – Overlap analysis and competitor read rates, January-March 2016
- Expedia dominates Orbitz subscribers’ inboxes; Travelocity emails also popular
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- Figure 18: Orbitz ePerformance – Overlap analysis and competitor read rates, January-March 2016
- Booking.com and TripAdvisor emails reach one quarter of Expedia’s subscriber inboxes; Travelocity reigning champion of read rates
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- Figure 19: Expedia ePerformance – Overlap analysis and competitor read rates, January-March 2016
- Travelocity is highly competitive to TripAdvisor
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- Figure 20: TripAdvisor ePerformance – Overlap analysis and competitor read rates, January-March 2016
- Travelocity and KAYAK appear to have successful email marketing strategies
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- Figure 21: Travelocity Mobile ads, March 2016
What’s Working?
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- Travel research and booking via the same platform
- Visual platforms are a powerful influencer for travel booking
- Foreign acquisitions are now norm
What’s Struggling?
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- Areas of improvement and ancillary revenue generation
- Challenges remain with mobile booking
- Fast and furious – Travel bookers want instant results
- Need for one powerful travel app
- Brand loyalty up for grabs? Loyalty programs become stricter
What’s Next?
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- Tour and activities are important components of the travel experience
- Sharing economy is emerging as a force in its own right
- Smarter travel booking sites
- Personalized offers
- The dust will take some time to settle down before winners emerge
- End-to-end innovation, agile business strategies top priority for OTAs
- Need for creativity in travel booking
- One wallet to bring them together, one wallet to rule them all
- Competition between OTAs and direct travel providers heats up
- Artificial intelligence and travel agents re-invented
- Mobile messaging as a commerce platform for OTAs
- Is Google a threat to the OTAs?
The Consumer – What You Need to Know
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- Online booking most common, direct with supplier remains popular
- May the best price win? Or is experience all?
- Desktop/laptops booking is most popular, mobile appeal is niche
- Sharing economy gaining importance
- Travel bookers tend to think OTAs are all pretty much the same
- Judicious email marketing can drive sales
Typical Travel Booking Methods
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- Transportation, accommodations essential to TB, tours/activities part of the booking mix
- Transportation
- Accommodations
- Tours/activities
- Cruises
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- Figure 22: Typical travel types booked, March 2016
- Relatively stable weekly and monthly use of travel provider sites
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- Figure 23: Frequency of visiting airline/car/hotel info or reservations websites, January 2006-December 2015
- Online travel booking is most common
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- Figure 24: Typical travel booking methods – Nets, March 2016
- Millennials most likely to book online
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- Figure 25: Online booking for airline tickets, hotels/motels, and rental cars, by generation, March 2016
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- Figure 26: Have not booked any airline tickets, hotels/motels, and rental cars, by generation, March 2016
- Males and high-income groups book online
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- Figure 27: Online booking for airline tickets, hotels/motels, and rental cars, by gender and household income, March 2016
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- Figure 28: Have not booked any airline tickets, hotels/motels, and rental cars, by gender, March 2016
- Travelers may be interested in booking package deals
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- Figure 29: Typical travel booking method – Details – Airlines, hotels/motels, rental cars, March 2016
- Is this the beginning of the travel agent comeback?
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- Figure 30: In person or phone booking with a travel agent for airline tickets, hotels/motels, and rental cars, by generation, March 2016
- Travel providers effectively competing with OTAs
- Online vacation rentals popular among Millennials
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- Figure 31: Travel booking method – Nets for home rentals (eg Airbnb, HomeAway), by generation, march 2016
- Hispanics book tours and activities online
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- Figure 32: Online booking for activities, by Hispanic origin, March 2016
Most Recent Travel Booking Considerations and Method
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- Usual suspects top reasons for travel booking, loyalty program benefits hard to redeem
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- Figure 33: Most recent travel booking considerations, March 2016
- Males, Millennials, high-income groups seek travel customization and recommendations
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- Figure 34: Most recent travel booking considerations – Customization and reviews, by gender, generation, household income, March 2016
- Employment is a key factor to seek travel customization, reviews/recommendations
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- Figure 35: Most recent travel booking considerations, by employment, March 2016
- Each generation has a unique approach to saving while booking travel
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- Figure 36: Most recent travel booking considerations – Cost, by generation, March 2016
- Devices with the largest screen size obvious choice for travel booking
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- Figure 37: Most recent travel booking method, March 2016
- Males, Millennials, high-income groups are key for mobile travel booking
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- Figure 38: Most recent travel booking method – Smartphone, by gender, generation, household income,
Attitudes toward the Sharing Economy
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- Growing interest in the sharing economy
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- Figure 39: Attitudes toward the sharing economy, March 2016
- Millennials are most interested in sharing economy services
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- Figure 40: Attitudes toward Airbnb (or similar), by generation, March 2016
- Parents more interested in sharing economy services
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- Figure 41: Attitudes toward Airbnb (or similar), by gender and parent status, March 2016
- Interest in sharing economy increases with affluence
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- Figure 42: Attitudes toward Airbnb, by household income, March 2016
Attitudes toward Travel Agents
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- Travel agents have an audience among those seeking better travel experiences
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- Figure 43: Attitudes toward travel agents, March 2016
- Mixed feelings among travel agents by generation
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- Figure 44: Attitudes toward travel agents, by generation, March 2016
- Parents of children, dads more likely to book through travel agents
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- Figure 45: Attitudes toward travel agents, by gender and parent status, March 2016
Perceptions and Use of Online Travel Agencies
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- Most consumers familiar with top online travel booking sites surveyed
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- Figure 46: Has any opinion about top online travel agencies, March 2016
- Expedia viewed most positively; TripAdvisor trusted, gaining on use
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- Figure 47: Perceptions of select online travel agencies – Scatter plot, indexed to average, March 2016
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- Figure 48: Perceptions of select online travel agencies – Table, indexed to average, March 2016
- Room for improvement in website user experience
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- Figure 49: Perceptions of select online travel agencies – Overwhelming, indexed to average, March 2016
- Innovation – An important agenda for OTAs
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- Figure 50: Perceptions of select online travel agencies – Innovative, indexed to average, March 2016
- Expedia.com attracts more eyeballs, TripAdvisor follows
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- Figure 51: Travel booking/review sites visited in the last 30 days, October 2011-December 2015
Attitudes toward Mobile Apps and Innovation
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- Room for improvements in mobile/smartphones for travel booking
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- Figure 52: Attitudes toward travel mobile apps, March 2016
- Broad interest in receiving mobile personalized travel offers
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- Figure 53: Open to personalized offers via mobile device/smartphones, by generation, March 2016
- Mobiles/smartphones may increase impulse travel booking
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- Figure 54: Use of mobile apps for booking/interest in voice assisted technology, by generation, March 2016
Attitudes toward Email Marketing
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- Relevant headers and optimized frequency for the win
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- Figure 55: Attitudes toward email marketing, March 2016
- Email marketing relevancy and frequency important factors for all
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- Figure 56: Reactions to email subject headers and frequency, by gender, generation, household income, March 2016
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
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