US $2,495.00
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PhoCusWright's U.S. Online Travel Overview Eighth Edition PLUS 2009-2010 Update
November 2008
US $2,495 CA $2,517 £1647 €1842
Purchase PhoCusWright's U.S. Online Travel Overview Eighth Edition and also receive PhoCusWright's U.S. Online Travel Eighth Edition Update: 2009-2010.
BONUS: Purchase this report and receive the April 23, 2009 Webinar recording and presentation deck.
This report is available in both PDF and print formats.
PhoCusWright's U.S. Online Travel Overview Eighth Edition provides the critical information needed to strategize for the future. The report delivers an in-depth look at the U.S. online travel market, including:
- Size of the U.S. travel market
- Market share of U.S. online travel agencies
- Growth developments throughout the U.S. online market
- Comparison of individual travel supplier segments
- Identification of major online players
- Market forecasts though 2010
PhoCusWright's U.S. Online Travel Overview Eighth Edition supplies insight with actual figures for 2006-2007 and projections for 2008-2010 and offers many key findings including:
- U.S. leisure / unmanaged business travel bookings accounted for $89.7 billion in 2007, more than one-third of the total travel market.
- Despite broad economic turmoil, softening consumer spending and declining travel demand, the U.S. online travel market is projected to grow in the high single digits through 2010, far ahead of the total travel market.
- Supplier Web sites and online travel agencies are expected to hold a temporary share equilibrium through 2010 at 61% and 39%, respectively, but this equilibrium remains uneasy: intense competition and powerful economic trends are driving turbulent dynamics in online air and hotel sales.
- Market maturity is sparking significant innovation in consumer marketing, media revenue models and trip planning/destination content products. Supplier sites are trying to get more dollars out of purchasers, while online travel agencies are trying to monetize unconverted visitors.
- The impact of airline capacity cuts across the industry remains far from clear, as a rapidly deteriorating economic climate may further reduce demand and restrain airlines' ability to raise fares.
- Online travel agencies—in particular opaque sites—are getting a mild counter-cyclical lift from weaker demand in the current tough economic climate; travelers are increasingly shopping online for better bargains.
- Dynamic packaging is experiencing a moderate resurgence as increasingly bargain-hungry consumers respond to the "book together and save" proposition.
- Spurred largely by rising fuel costs, soaring airfares and growing concern for "green" travel, Amtrak is experiencing record growth in overall ridership and online bookings.
Purchase PhoCusWright's U.S. Online Travel Overview Eighth Edition—analyzing expectations and opportunities through 2010 for the U.S. online travel market—and receive PhoCusWright's U.S. Online Travel Eighth Edition Update: 2009-2010—an examination of current traveler behavior—for the same price (US$2,495 for both).
Electronic Market Data
For an additional 25% of the prevailing price, report purchasers are eligible for electronic access to select market data included in the report. Detailed spreadsheets in Microsoft Excel format supply data for the U.S. leisure/unmanaged business online travel market by segment (air, hotel, car rental, tour, cruise, rail) and by channel (online travel agency, supplier Web site, and total market). Complete your view of the U.S. online travel market by purchasing these spreadsheets along with the report.
Table of Contents
Methodology
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Section One
Overview: The Perfect Storm(s)
- 2009: A Softer Slowdown than 2002
- Global Online Growth Amid Economic Turmoil
- Suppliers and Intermediaries: Dollars vs. Eyeballs
- Blurring Business Models
- Innovation: The Perfect Impact
- Social Media
- Search
- The User Experience
- Mobile Technology
- Evolution of Online Advertising
- Key Players in Travel Innovation
- Outlook: Investments & Innovation
- Trends and Assumptions
- Purpose of the Report
Section Two
Size of the Market
Overview
- Size of the Market
- Online Travel Agencies vs. Branded Web Sites
- Trends and Assumptions
Section Three
Online Travel Agencies: Countercyclical Forces Soothe Ailing Growth Rates
Key Findings
Overview
Size of the Market
- 2007 - A Rollercoaster Year
- Economic Climate Sets the Stage for Opaque to Shine
- Online Travel Agencies vs. Supplier Web Sites
- International Markets Continue to Drive Overall Growth
- Looking Beyond Transactions
- Other Online Travel Agency Trends
Section Four
Airlines: Online Growth Amid an Unsettling Year
Key Findings
Overview
Size of the Market
- Fares Up, Passengers Down
- Packaging and Cross-selling Opportunities
- Metasearch and Lead-generation Sites
- Other Airline Trends and Assumptions
Section Five
Hotel & Lodging: Chains Shift Marketing Dollars Online as Agencies Capitalize on Economic Conditions
Key Findings
Overview
Size of the Market
- Online Agencies vs. Supplier Web Sites
- Reservations Centers Become Contact Centers
- Online Travel Agencies Answer Objections
- Online Shift in Marketing Spend
- Managing Search
- Other Hotel & Lodging Trends and Assumptions
Section Six
Car Rental: A Bumpy Road Ahead
Key Findings
Overview
Size of the Market
- Online Agencies vs. Branded Web Sites
- Online Travel Agencies Leverage Strengths
- Other Car Rental Trends
Section Seven
Packaged Travel: Slowing Demand Gives Packaging a Lift
Key Findings
Overview
Size of the Market
- Online Agencies vs. Supplier Web Sites
- Suppliers Slow to Move
- Other Packaging Trends
Section Eight
Rail: Online Direct Strategy Remains Strong as Rising Gas Prices, Airfares Accelerate Growth
Key Findings
Overview
Size of the Market
- Online Travel Agencies vs. Supplier Web Sites
- Other Rail Trends and Assumptions
Section Nine
Cruise: Influence—Not Transactions—Define Online Market
Key Findings
Overview
Size of the Market
- Online Agencies vs. Branded Web Sites
- Booked Online vs. Influenced Online
- Post-Booking Opportunities
- Traditional Travel Agencies' Domination Slips
- Other Cruise Trends and Assumptions
LISTING OF TABLES
Table 1.1 U.S. Total and Online Leisure/Unmanaged Business Travel Market, 2006–2010 (US$B)
Table 1.2 Growth in Online Travel Buyers
Table 1.3 European Total and Online Leisure/Unmanaged Business Travel Market, 2006–2010 (€B)
Table 1.4 U.S. and Europe Online Leisure/Unmanaged Business Travel Share of the Total Travel Markets, 2006–2010
Table 1.5 Online Leisure/Unmanaged Business Travel Share of the Total Travel Market of Select Countries, 2007
Table 1.6 Supplier Web Sites versus Online Travel Agencies Market Share, 2008–2010
Table 1.7 Use and Influence of Social Media, 2008
Table 1.8 Influence of Social Media on the Travel Shopping and Buying Process, 2008
Table 1.9 Relative Influence of Consumer Technologies, 2008
Table 1.10 Selected Travel Startups, Funding Announcements and Acquisitions
Table 2.1 U.S. Online Leisure/Unmanaged Business and Corporate Travel Share of Total Travel Market, 2007 (US$M)
Table 2.2 U.S. Travel Market, by Channel and Segment, 2007
Table 2.3 U.S. Online Leisure/Unmanaged Business Travel Market by Segment, 2006–2010 (US$M)
Table 2.4 Percent of Total U.S. Online Leisure/Unmanaged Business Travel Market by Segment, 2007 and 2010
Table 2.5 U.S. Online Leisure/Unmanaged Business Travel as a Percentage of Total Travel Market: Online Penetration by Segment, 2006–2010
Table 2.6 U.S. Online and Total Leisure/Unmanaged Business Travel Gross Bookings and Growth Rates, and Total Online Penetration by Segment, 2006–2010 (US$M)
Table 2.7 U.S. Online Leisure/Unmanaged Business Travel Market by Channel, 2006–2010 (US$M)
Table 2.8 Channel Market Share of Online Revenue by Segment, 2007–2010
Table 2.9 Online Travel Agencies versus Branded Web Site Share of Total Revenue by Segment, 2006–2010
Table 3.1 Online Travel Agency Gross Bookings by Segment, 2006–2010 (US$M)
Table 3.2 U.S. Online Travel Agency and Supplier Web Site Leisure/Unmanaged Business Gross Booking and Channel Growth, 2006–2010 (US$M)
Table 3.3 Online Packaging Gross Bookings and Share of Total Online Travel Agency Market, 2006–2010 (US$M)
Table 3.4 Top Four Online Travel Agency Bookings Growth, 2007–2Q08
Table 3.5 Innovation Adoption Curve
Table 3.6 Market Share of Top Four Online Travel Agencies, 2007 and First Half 2008
Table 3.7 U.S. Supplier and OTA Share of Online Leisure/Unmanaged Business Travel Gross Bookings, 2007 and 2010
Table 3.8 U.S. Supplier and Online Travel Agency Share of Total Travel Market, 2006–2010 (US$B))
Table 3.9 Usual Online Purchase Method by Travel Component Purchased, 2006 versus 2007)
Table 3.10 Top Four Online Agency Gross Bookings and Annual Growth, U.S. and International, 2007 (US$M)
Table 4.1 U.S. Airlines Internet Leisure/Unmanaged Business Gross Bookings, 2006–2010 (US$M)
Table 4.2 U.S. Online Leisure/Unmanaged Business Share of Total Air Market, 2007 and 2010
Table 4.3 U.S. Airlines Leisure/Unmanaged Business Internet Sales Share by Channel, 2007–2010
Table 4.4 Comparative Ticket and Sales Volume by Agency Channel, 2007
Table 4.5 Average Fare Sold by Online Travel Agencies versus Traditional Travel Agencies, 2007
Table 4.6 Passenger Revenue and Boarded Passengers Year-Over-Year Change for Top 10 Airlines, Legacy Carriers and LCCs, First Half 2008
Table 5.1 U.S. Hotel & Lodging Internet Leisure/Unmanaged Business Gross Bookings, 2006–2010 (US$M)
Table 5.2 Internet Leisure/Unmanaged Business Share of Total U.S. Hotel & Lodging Market, 2007 and 2010
Table 5.3 U.S. Hotel & Lodging Internet Gross Bookings by Channel, 2007 and 2010
Table 5.4 Channel Shifts in Major U.S. Hotel Chain Reservations
Table 5.5 Degree of ROI Measurability in Typical Media & Message Marketing Types
Table 5.6 Distribution Marketing Processes
Table 6.1 U.S. Car Rental Internet Leisure/Unmanaged Business Gross Bookings, 2006–2010 (US$M)
Table 6.2 U.S. Online Leisure/Unmanaged Business Share of Total Car Rental Market, 2007 and 2010 (US$B)
Table 6.3 U.S. Car Rental Leisure/Unmanaged Business Internet Sales by Channel, 2007 and 2010
Table 6.4 Shopping versus Buying Behavior, Car Rental Purchases, 2006 and 2007
Table 7.1 U.S. Packaged Travel Internet Leisure/Unmanaged Business Gross Bookings, 2006–2010 (US$M)
Table 7.2 Estimated U.S. Market Share of Online Packagers, 2007
Table 7.3 Shifting Share: The Total Packaged Travel Market by Channel, 2006 versus 2009
Table 8.1 U.S. Rail Internet Leisure/Unmanaged Business Gross Bookings, 2006–2010 (US$M)
Table 8.2 Amtrak.com Sales and Growth, 2006–2010 (US$M)
Table 8.3 Amtrak Passenger Sales by Channel, 2007 and 2010
Table 8.4 Amtrak Offline Channel Share, 2007
Table 9.1 Estimated U.S. Market Share of Online Packagers, 2007
Table 9.2 Online Share of Total Cruise Market, 2007 and 2010
Table 9.3 Online Travel Agencies versus Supplier Branded Web Site Share, 2007 and 2010
Table 9.4 Cruise Lines Offering an Online Consumer Booking Engine and Post-Booking Services
Table 9.5 Average Monthly Unique Visitors, Oct. 2007–Sept. 2008
Table 9.6 Cruise Market Channel Share, 2006–2010
Methodology
Market Size and Forecasts
PhoCusWright has been tracking the financial results of the online travel industry since 1998. This report’s estimates and forecasts cover U.S.-based online travel businesses, including travel suppliers (airlines, hotels, car rental companies, packagers, railways and cruise lines) and online travel agencies. The total market size includes sales of non-U.S. travel suppliers transacted via U.S.-based online travel agencies. All figures are in U.S. dollars unless otherwise stated.
Both leisure and unmanaged business travel services are included in the online travel market size and forecast figures. Unless otherwise indicated, all online gross bookings and share figures refer to leisure/unmanaged travel. Unmanaged business travel refers to all air, car and hotel expenses associated with business travel in firms that do not have a travel policy dictating the channel, type of travel, supplier or fare/rate uses. Corporate online booking systems such as Sabre/GetThere and Amadeus/e-Travel are excluded from this analysis (for more information on the corporate travel market, see PhoCusWright’s Corporate Travel Distribution: Key Markets). Corporate travel bookings are included in the total travel market figures, but not segmented or discussed in this report.
PhoCusWright builds its estimates and forecasts from discussions with more than 80 travel executives regarding their companies’ Internet sales, marketing and technology investments, challenges, strategies and expectations. Their responses have been vetted and aggregated to determine market size for supplier Web sites and online travel agencies. PhoCusWright also reviewed data from Securities and Exchange Commission documents, company reports, and select third-party data sources.
Figures for 2006-2007 are based on actual company results. Projections for 2008-2010 are based on company interviews, consumer research and market developments. PhoCusWright also considers historical growth and economic trends when developing its forecasts. Estimates and projections are for gross bookings—the retail value of travel sold over the Internet—after cancellations. Figures for airlines are based upon flown (passenger) revenue. Hotel figures are based upon room revenue. Figures for car rental are based on domestic U.S. revenues, excluding insurance replacement revenue. Figures for cruise lines and tour operators are based on U.S. outbound passenger revenue.
Travel that is researched online but booked offline using a toll-free telephone number provided on the Web site are excluded from online gross bookings figures. Total travel figures (online and offline) are used to determine Internet penetration for each market segment. Total travel figures are either derived from third-party sources or are PhoCusWright estimates.
Note that figures listed in tables do not always add precisely to column totals due to rounding.
Consumer Travel and Behavioral Information
Consumer travel shopping and purchasing behavior is gathered from The PhoCusWright Consumer Travel Trends Survey Tenth Edition. Online travelers were identified through successive waves of ICR’s EXCEL Omnibus, beginning Sept. 19 and ending Oct.14, 2007. To qualify for participation in the study, respondents had to indicate if they
1. Had personally taken a trip by commercial airline in the last 12 months;
2. Had personally stayed at a hotel for a vacation or any leisure travel in the last 12 months; and
3. Had used a computer, either at home or at work, to connect to the Internet in the last month.
Interviewing was conducted from ICR’s centralized telephone center between Oct. 10 and Oct. 24, 2007. A total of 500 interviews were conducted via telephone and averaged 22 minutes in length.
Quotas were set based on the percent distribution of males and females in the Northeast, North Central, South and West regions of the country. These percentages are based on the distribution of the population from the Omnibus database development phase. Upon completion of the study, additional demographic characteristics were used to weight the data to represent the population of “online travelers” more accurately.
The results were tested for significant differences, which are noted at the 95% level of confidence or higher. The error interval for the sample of 500 is +/- 4.4% at the 95% confidence level.
The following terms from the survey are referenced within this document and are defined as follows:
Online traveler is defined as a U.S. adult who has taken a commercial air trip in the past year, stayed at a hotel in the past year and used the Internet in the past 30 days.
Online travel shopper is an online traveler who has shopped for travel online in the past year.
Online travel buyer is an online traveler who purchased at least one travel component (e.g., air, hotel, car) online in the past year.
