Internet Travel Booking - US - September 2005

INTRODUCTION AND ABBREVIATIONS
Introduction
Other relevant reports
Definition
Abbreviations & terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Travel market rebounding
Internet connections on the rise, allowing for greater access
Business travel trending up
Air travel remains largest segment, but is losing ground
Competition is tough, leading to a fight for inventory
Adspend up
Booking tools show promise
Key demographics
Growth of online booking to continue
MARKET DRIVERS
Travel market rebounding
Travel expenditures
Figure 1: Travel expenditures in the U.S., at current and constant prices, 2000-05
Person trips
Figure 2: Number of domestic, inbound and outbound person trips, 1999-2005
Business travel trending up
Figure 3: Total person trips for business and leisure travel, 1998-2006
Figure 4: Graph: Total person trips for business and leisure travel, 1998-2006
Figure 5: Likelihood that virtually all bookings will be completed online in five years, according to business travelers, 2004
Figure 6: Frequent business travelers’ use of selected travel tools, past 12 months, 2002 and 2004
Internet use and penetration
Increase in broadband penetration
Figure 7: U.S. broadband household projections, 2000-10
Increase in household computer penetration
Figure 8: Household ownership of personal computers, 2001-04
Travel among PC households
Figure 9: Travel planning in households with personal computers, 2002-05
Figure 10: Internet activities*, May-November 2004
The online traveler
Generational influences
Figure 11: American generations, 2000-10
Figure 12: Graph: American generations, 2005-10
Baby Boomers
Gen X and Echo Boom
Women
Internet promotes last-minute travel
Figure 13: Last-minute travel, May 2004
Figure 14: Reasons for last-minute travel, May 2004
Internet-based competition heats up
Hotels set accreditation standards for online travel agencies
Metasearchers improve Internet functionality
Expanding options encourage Internet use
Bookers vs. lookers
Figure 15: Travel sites used by travel planners and bookers, July 2004
MARKET SIZE AND TRENDS
Figure 16: Total U.S. retail sales of Internet travel, at current and constant prices, 2000-05
Figure 17: Graph: Total U.S. retail sales of Internet travel, at current and constant prices, 2000-05
MARKET SEGMENTATION
Introduction
Travel components
Figure 18: Annual revenue for the online travel insustry, by travel component, 2003 and 2005
Figure 19: Graph: Annual revenue for the online travel industry, by travel component, 2005
Figure 20: Annual revenue for the online travel insustry, by type of travel and retail channel, 2003 and 2005
Travel products and services booked online
Figure 21: Travel products/services purchased online, 2002-04
Air travel
Hotel/motel reservations
Greater control of third-party distributors
Occupancy tax issues
Car rentals
Other travel products
SUPPLY STRUCTURE
Introduction
Figure 22: Online travel agency market share, 2004
Figure 23: Graph: Online travel agency market share, 2004
Figure 24: Unique visitors to U.S. travel sites, 2002 and 2005
Figure 25: Internet sites used for travel booking, 2002-04
 INTERNET-BASED INDEPENDENT TRAVEL SITES
IAC/InterActive Corp.
Expedia
Hotwire.com
Hotels.com
Sabre
Travelocity
Cendant
Orbitz
Priceline
Metasearchers
Other online travel suppliers
 BRICK & MORTAR/INTERNET TRAVEL AGENCY SITES
American Express
Carlson Wagonlit Travel
 AIRLINES
American Airlines
Delta Air Lines
United Airlines
Northwest Airlines
Continental Airlines
US Airways
Southwest Airlines
 HOTELS/MOTELS
Marriott International
Accor Lodging
Hilton Hotels
Cendant Corporation
InterContinental Hotels
Choice Hotels International
Best Western International
ADVERTISING AND PROMOTION
Introduction
Website/email advertising trends up
Airlines
Hotels
Cruise lines
Search engine marketing
Website enhancements
Best price guarantees
Figure 26: Travel provider best price guarantees, July 2005
Personalized customer satisfaction
Internet companies branching out
Trip enhancements
Pop culture and celebrity endorsements
Emotional resonance
THE CONSUMER
Introduction
Number of round trips taken in the past 12 months
Key findings
Figure 27: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by demographics, July 2005
Figure 28: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by gender, July 2005
Figure 29: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by age, July 2005
Figure 30: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by race/Hispanic origin, July 2005
Figure 31: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by household income, July 2005
Figure 32: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by marital status, July 2005
Figure 33: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by presence of children, July 2005
Figure 34: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by number of people in household, July 2005
Figure 35: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by region, July 2005
Travel booked online
Figure 37: Mean number of trips booked online in the past 12 months, by type of travel, by demographic characteristics, July 2005
Online travel shopping habits and preferences
Figure 38: Online travel shopping techniques, by age, July 2005
Figure 39: Online travel shopping techniques, by household income, July 2005
Figure 40: Online travel shopping techniques, by race/Hispanic origin, July 2005
Figure 41: Online travel shopping techniques, by number of people in household, July 2005
Use of email alerts and opinions about online pricing
Figure 42: Opinions on online pricing and email alerts, by age, July 2005
Figure 43: Opinions on online pricing and email alerts, by household income, July 2005
Figure 44: Opinions on online pricing and email alerts, by race/Hispanic origin, July 2005
Online travel planning and trip management features
Pre-booking features
Figure 45: Use of online travel planning pre-booking features, by age, July 2005
Figure 46: Use of online travel planning pre-booking features, by household income, July 2005
Figure 47: Use of online travel planning pre-booking features, by race/Hispanic origin, July 2005
Figure 48: Use of online travel planning pre-booking features, by number of people in household, July 2005
Figure 49: Use of online travel planning pre-booking features, by region, July 2005
Post-booking features
Figure 50: Use of online travel planning post-booking features, by gender, July 2005
Figure 51: Use of online travel planning post-booking features, by age, July 2005
Figure 52: Use of online travel planning post-booking features, by race/Hispanic origin, July 2005
Destination planning features
Figure 53: Use of online travel and destination planning features, by age, July 2005
Figure 54: Use of online travel and destination planning features, by household income, July 2005
Figure 55: Use of online travel and destination planning features, by race/Hispanic origin, July 2005
Figure 56: Use of online travel and destination planning features, by number of people in household, July 2005
Figure 57: Use of online travel and destination planning features, by region, July 2005
Summary
FUTURE AND FORECAST
 FUTURE TRENDS
U.S. Travel trends
Leisure travel
Figure 58: Travel expenditures in the U.S., at current prices, 2001-06
Business travel
Figure 59: Frequent business travelers’ use of online tools, past 12 months, 2002 and 2004
Internet travel
Internet access to increase…
Figure 60: U.S. broadband household projections, 2000-10
…leading to a more tech-savvy consumer
Flights remain segment leader, but other products gain in popularity
Competition is tough, and only the strong will survive
A friendly face of technology
 MARKET FORECAST
Internet travel bookings
Figure 61: Forecast of total U.S. sales of Internet travel bookings, at current and constant prices, 2005-10
Figure 62: Graph: Forecast of total U.S. sales of Internet travel bookings, at current and constant prices, 2005-10
Forecast factors
APPENDIX: TRADE ASSOCIATIONS