Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- Overview
- The issues
- Move to experiential vacationing
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- Figure 1: OTA activities booking habits vs desires, February 2018
- Sharing economy rising in popularity
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- Figure 2: Types of vacation lodging, all vacationers, February, 2018
- Differentiation is a problem among OTAs
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- Figure 3: Average percentage point difference of not visited to visited, among Gen X, Baby Boomer, and WWII generations, February 2018
- The opportunities
- Travelers desire to have information centralized
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- Figure 4: Booking site feature importance, any and most important, February 2018
- Bespoke travel services on the horizon
- Consumers trust experience for planning
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- Figure 5: Outlets for destination discovery, February 2018
- What it means
The Market – What You Need to Know
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- Travel booking market on track for 4-5% annual growth
- Travel industry expected to grow, despite bumps
- Americans feel good about their financial state
- Booking options have expanded
- Millennials are all grown up and having little Millennials… wait
The Market
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- Travel booking market continues to grow
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- Figure 6: Travel arrangement and reservation services revenues and forecast, at current prices, 2013-23
- Figure 7: Travel arrangement and reservation services revenues and forecast, at current prices, 2013-23
Market Breakdown
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- Online booking is here to stay
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- Figure 8: E-commerce share of total revenues of travel arrangement and reservation services, 2013-2018
- Direct providers and OTAs continue to fight
- OTAs approaching duopoly status
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- Figure 9: Share of US bookings between top two OTAs, 2016-2017
Market Factors
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- Economic data
- GDP growth decline
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- Figure 10: GDP change from previous period, Q1 2007-Q1 2018
- Shrinking DPI gains
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- Figure 11: Disposable Personal Income change from previous period, January 2007-April 2018
- Consumer sentiment remains high
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- Figure 12: Consumer sentiment index, January 2007-May 2018
- Fuel prices fueling decline
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- Figure 13: US gasoline and diesel retail prices, January 2007-May 2018
- Net neutrality repeal
Market Perspective
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- Millennials in the driver’s seat
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- Figure 14: Population by generation, 2018
- Americans feel good about their finances…
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- Figure 15: Current financial situation, 2013-18
- …and want to get out into the world
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- Figure 16: Where extra money is spent, February 2018
Key Players – What You Need to Know
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- Direct platforms are at war with OTAs
- OTAs focused on expansion
- Airbnb is worrying everybody
- Travel agents have a place in the market
Key Players
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- Booking Players Overview
- Direct Platforms
- OTAs
- Expedia Group
- Booking Holdings
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- Figure 17: Share of US bookings between top two OTAs, 2016-2017
- Metasearch
- TripAdvisor, Inc.
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- Figure 18: Travel planning resources, February 2018
- Airbnb
- Travel agencies
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- Figure 19: Travel agent usage, by age group, February 2018
What’s Working?
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- OTA email strategies
- Flagships lead the way
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- Figure 20: Monthly email volume, February-April 2018
- Companies view weekends differently
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- Figure 21: OTA email volume by day, in millions, February-April 2018
- Thursdays are a battleground
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- Figure 22: Share of daily email sends, by day of the week, February-April 2018
- Travelocity and Orbitz have their day
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- Figure 23: Read ratios of OTAs, by day of the week, February-April 2018
- Mobile booking reigns; mobile check-in grows
- OTA domination
- Hotels Fight Back
What’s Struggling?
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- Loyalty
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- Figure 24: Q1 2018 Direct Mail Volume
- Television not convincing targets
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- Figure 25: Average percentage point difference of not visited to visited, among Gen X, Baby Boomer, and WWII generations, February 2018
- Sharing economy hurting car rentals
- Travel hacks – the bad kind
- Demand for a centralized service still unaddressed
What’s Next?
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- Airbnb doing it all
- Exclu$ive cont€nt
- More seamless hotel experiences
- Independent apps look to disrupt the process
- Multigenerational travel
The Consumer – What You Need to Know
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- Travel booked in advanced, activities booked in the moment
- Personal recommendations matter most
- Experiences are key
- Tide coming back in on cruises
- Push men, support women
- Agents staking their claim
- Sharing isn’t just for vacation slides
The Vacation Booking Process
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- Consumers prefer online booking
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- Figure 26: Typical travel booking methods, online vs in-person – nets, February 2018
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- Figure 27: Online booking for airline tickets and rental cars, hotels/motels, and activities, by generation, February 2018
- Most booking done two to six months in advance
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- Figure 28: Booking lead times, February 2018
- Older generations cautious, younger generations spontaneous
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- Figure 29: Booking advance times, by reservation and generation, February 2018
- Booking sites are a one-stop shop and increasingly mobile
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- Figure 30: Research and booking platforms, desktop vs mobile website, by generation, February 2018
- Youth taking to the seas
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- Figure 31: Cruise booking, by generation, February 2018
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- Figure 32: Cruise booking, by age and income, February 2018
- Opportunity for providers to get ahead in cruise booking
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- Figure 33: Cruise booking, provider website vs booking site, by age, February 2018
Rise in Activity Booking
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- Goers are also doers
- OTAs are coming up short
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- Figure 34: OTA activities booking habits vs desires, February 2018
- Young travelers book activities through a provider, not an OTA
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- Figure 35: Activity booking behaviors, by generation, February 2018
- Experiences worth the investment
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- Figure 36: Activity booking behaviors, by age and income, February 2018
Deciding on a Destination
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- The personal is practical
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- Figure 37: Outlets for Destination discovery, February 2018
- With age comes (listening to) experience
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- Figure 38: Sources of travel inspiration, by generation, February 2018
- No research for old men
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- Figure 39: Sources of travel inspiration, men 55+ vs all, February 2018
- The boys’ and girls’ clubs of young travel researchers
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- Figure 40: Destination discovery methods of 18-34 year olds, by gender, February 2018
Desired Attributes of OTAs
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- Show me what you got
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- Figure 41: Desired features in a booking website, February 2018
- iGens show interest in local and late night
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- Figure 42: Desired features in a booking website – activity recommendations, by generation, February 2018
- Young women want to stay informed
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- Figure 43: Desired features in a booking website, by age and gender, February 2018
- Bring it all together
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- Figure 44: Booking site feature importance, any and most important, February 2018
Travel Booking Attitudes and Behaviors
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- Booking is fun, but not a hobby
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- Figure 45: Vacation planning opinions, any agree, by generation, February 2018
- Older adults set it and forget it
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- Figure 46: Vacation planning online behaviors, by age, February 2018
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- Figure 47: Vacation planning opinions, any agree, age 55+ vs all respondents, February 2018
The Role of Travel Agents
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- Travel agents still provide value
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- Figure 48: Travel agency usage, by generation, February 2018
- Agents have a strong niche
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- Figure 49: Booking habits, OTA vs travel agent, February 2018
Travel Booking and the Sharing Economy
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- Home shares make up a significant portion of vacation stays
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- Figure 50: Types of vacation lodging, all vacationers, February 2018
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- Figure 51: Travel preferences, February 2018
Appendix – Data Sources and Abbreviations
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- Data Sources
- Fan chart forecast
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 52: Total US sales and forecast of market, at inflation-adjusted prices, 2012-22
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