Online Travel Aggregators - UK - June 2018

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Online takes the lion’s share of holiday bookings
OTAs the leading single booking channel
Figure 1: Estimated number of people who booked a holiday online, by channel, 2017
Holiday planning cycle remains consistent
Figure 2: Consumer plans to book a holiday within the next three months, June 2012-March 2018
Income squeeze abates as wage growth overtakes inflation
Figure 3: Average wage growth and consumer price inflation, March 2014-March 2018
OTA usage remains stable
Monarch collapse prompts investigation into traveller protections
Digital assistants increasing presence in the home
Social competes for space in the booking process…
…but search is better placed to serve holidaymakers
The travel app economy continues to grow
Figure 4: Total downloads in the UK for apps in the Travel category on the iOS App Store and the Travel & Local category on Google Play combined, 2015-17
Figure 5: Total time spent in the Travel & Local category on Android* phones in the UK, 2015-17
Figure 6: Total sessions in apps in the Travel & Local category on Android* phones in the UK, 2015-17
Companies and brands
Booking.com increases penetration in the OTA market
Expedia group second-largest supplier of OTA services
TripAdvisor expands its reach as an OTA
Figure 7: Market penetration of travel comparison websites/apps, based on online holiday booking behaviour in the last 12 months, April 2018
Travellers embrace OTA apps
Figure 8: Ranking of top OTA apps according to average monthly active users on iPhone and Android phones in the UK, 2017
Expedia adds concert tickets to its platform
Customers get more transparency from a Holiday Value Index tool
Facebook advertising targets those considering travel
Trivago continues to dominate advertising spend
Figure 9: Total above-the-line, online display and direct mail advertising expenditure on online travel/booking agents, by advertiser, 2017
The consumer
Online remains most popular booking channel
Figure 10: Ways in which consumers booked their holidays in the last 12 months, April 2018
Converting research into bookings
Figure 11: Providers used to research and book holidays online in the last 12 months, April 2018
OTAs a popular option for short-haul trips
Figure 12: Type of holiday most recently booked via travel comparison websites/apps, April 2018
At least 48% of holidays abroad are not ATOL protected
Accommodation-only bookings reserved for UK trips
Figure 13: Services booked via travel comparison websites/apps for the most recent holiday, by type of holiday booked, April 2018
Laptops and desktops remain the preferred option for holiday bookings
Figure 14: Devices used for research and booking holidays via travel comparison websites/apps, April 2018
Consumers compare their comparison sites
Consumers receptive to reward schemes
Figure 15: Consumer behaviour related to travel comparison sites/apps, April 2018
Protections available to holidaymakers
Chatbots may change the holiday booking process
An activity-first search appeals to over half of consumers
Travellers are engaged in the holiday planning process
Figure 16: Attitudes towards holiday planning and booking processes, April 2018
Consumers still perceive OTAs as better value than traditional travel agents
Piecemeal booking styles seems here to stay
What we think
ISSUES AND INSIGHTS
Increasing OTA access points
The facts
The implications
Increasing loyalty in OTAs
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Online takes the lion’s share of holiday bookings
OTAs the leading single booking channel
Holiday planning cycle remains consistent
Income squeeze abates as wage growth overtakes inflation
OTA usage remains steady but tour operator use spikes
Monarch collapse prompts investigation into traveller protections
Digital assistants increasing presence in the home
Social competes for space in the booking process
Search is better placed to serve holidaymakers
The travel app economy continues to grow
MARKET SIZE AND SEGMENTATION
Online takes the lion’s share of holiday bookings
Figure 17: Estimated number of people who booked a holiday, 2017
OTAs the leading single booking channel
Figure 18: Estimated number of people who booked a holiday online, by channel, 2017
MARKET BACKGROUND AND DRIVERS
Holiday planning cycle remains consistent
Figure 19: Consumer plans to book a holiday within the next three months, June 2012-March 2018
Income squeeze abates as wage growth overtakes inflation
Figure 20: Average wage growth and consumer price inflation, March 2014-March 2018
OTA usage remains steady but tour operator use spikes
Figure 21: Websites/apps used to book holiday, 2015-18
CMA investigates OTA selling practices
Monarch collapse prompts investigation into traveller protections
Digital assistants increasing presence in the home
Social competes for space in the booking process…
…but search is better placed to serve holidaymakers
Figure 22: Google’s integrated hotel booking option in search
The travel app economy continues to grow
Figure 23: Total downloads in the UK for apps in the Travel category on the iOS App Store and the Travel & Local category on Google Play combined, 2015-17
Figure 24: Total time spent in the Travel & Local category on Android* phones in the UK, 2015-17
Figure 25: Total sessions in apps in the Travel & Local category on Android* phones in the UK, 2015-17
Airline and direct booking apps competing with OTAs
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Booking has highest penetration in the OTA market
Expedia Group second-largest supplier of OTA services
TripAdvisor expands its reach
Travellers embrace OTA apps
Expedia adds concert tickets to its platform
Expedia offers Holiday Value Index tool
Thomas Cook announces strategic alliance with Expedia
TripAdvisor launches Sponsored Placements
Trivago continues to dominate advertising spend
MARKET SHARE
Booking.com increases penetration in the OTA market
Expedia group second-largest supplier of OTA services
TripAdvisor expands its reach as an OTA
Figure 26: Market penetration of travel comparison websites/apps, based on online holiday booking behaviour in the last 12 months, April 2018
Travellers embrace OTA apps
Figure 27: Ranking of top OTA apps according to average monthly active users on iPhone and Android phones in the UK, 2017
LAUNCH ACTIVITY AND INNOVATION
Expedia adds concert tickets to its platform
Customers get more transparency from a Holiday Value Index tool
Thomas Cook announces strategic alliance with Expedia
Facebook advertising targets those considering travel
TripAdvisor launches Sponsored Placements
ADVERTISING AND MARKETING ACTIVITY
Advertising continues its move to digital
Figure 28: Total above-the-line, online display and direct mail advertising expenditure on online travel/booking agents, by media type, 2015-17
Trivago continues to dominate advertising spend
Figure 29: Total above-the-line, online display and direct mail advertising expenditure on online travel/booking agents, by advertiser, 2017
Nielsen Ad Intel coverage
BRAND RESEARCH
Brand map
Figure 30: Attitudes towards and usage of selected brands, April 2018
Key brand metrics
Figure 31: Key metrics for selected brands, April 2018
Brand attitudes: TripAdvisor leads in consumer trust and perception of quality
Figure 32: Attitudes, by brand, April 2018
Brand personality: Trivago and TripAdvisor seen as fun options
Figure 33: Brand personality – Macro image, April 2018
Hotels.com lowest across brands in perceptions of reliability and efficiency
Figure 34: Brand personality – Micro image, April 2018
Brand analysis
TripAdvisor’s extensive reviews make place it the most-used brand overall
Figure 35: User profile of TripAdvisor, April 2018
Booking.com’s market leading position driven by its efficient focus on value
Figure 36: User profile of Booking.com, April 2018
Expedia playing catch-up to Booking.com and Trivago in terms of brand image
Figure 37: User profile of Expedia, April 2018
Marketing effectively boosts Trivago’s appeal and reach
Figure 38: User profile of Trivago, April 2018
Hotels.com suffers from a lack of perceived trust and innovativeness
Figure 39: User profile of Hotels.com, April 2018
THE CONSUMER – WHAT YOU NEED TO KNOW
Online remains most popular booking channel
Converting research into bookings
OTAs a popular option for short-haul trips
A third of most recent holidays were packages
Laptops and desktops remain the preferred option for holiday bookings
Consumers compare their comparison sites
Consumers receptive to reward schemes
Chatbots may change the holiday booking process
An activity-first search appeals to over half of consumers
Travellers are engaged in the holiday planning process
Piecemeal holiday booking looks likely to stay
HOLIDAY BOOKING CHANNELS
Online remains most popular booking channel
Figure 40: Proportion of consumers who booked a holiday in the last 12 months, April 2018
Figure 41: Ways in which consumers booked their holidays in the last 12 months, April 2018
Converting research into bookings
Adding complexity to the booking process
Figure 42: Providers used to research and book holidays online in the last 12 months, April 2018
Travel comparison favours a younger market…
Figure 43: Providers used to research and book holidays online in the last 12 months, by age, April 2018
HOLIDAYS BOOKED THROUGH ONLINE TRAVEL AGGREGATORS
OTAs a popular option for short-haul trips
Figure 44: Type of holiday most recently booked via travel comparison websites/apps, April 2018
A third of most recent holidays were packages
At least 48% of holidays abroad are not ATOL protected
Accommodation-only bookings reserved for UK trips
Figure 45: Services booked via travel comparison websites/apps for the most recent holiday, April 2018
Figure 46: Services booked via travel comparison websites/apps for the most recent holiday, by type of holiday booked, April 2018
DEVICES USED TO ACCESS ONLINE TRAVEL AGGREGATORS
Laptops and desktops remain the preferred option for holiday bookings
Mobile becomes a viable option for booking
Figure 47: Devices used for research and booking holidays via travel comparison websites/apps, April 2018
BOOKING BEHAVIOUR ON ONLINE TRAVEL AGGREGATORS
Consumers compare their comparison sites
Figure 48: Repertoire of comparison websites/apps used to book holidays, April 2018
Consumers receptive to reward schemes
Loyalty schemes appeal more to higher economic groups
Figure 49: Consumer behaviour related to travel comparison sites/apps, April 2018
Protections available to holidaymakers
Chatbots may change the holiday booking process
ATTITUDES TOWARDS ONLINE TRAVEL AGGREGATORS
An activity-first search appeals to over half of consumers
Travellers are engaged in the holiday planning process
Figure 50: Attitudes towards holiday planning and booking processes, April 2018
Consumers still perceive OTAs as better value than traditional travel agents
Figure 51: Attitudes towards the value of deals from comparison sites, by age, April 2018
Piecemeal booking styles seems here to stay
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology