TravelBizBuzz

There’s no doubt about it: The India market is hot — especially online.

In fact, “a unique blend of forces” is spurring online channel growth, which promises to quadruple within two years, says travel research firm PhoCusWright in a September report titled The Emerging Online Travel Marketplace in India. And various players in the industry — both suppliers and agencies — are taking aim at grabbing a piece of this pie.

Right now the largest online channel is supplier Web sites, which snagged 61 percent market share in 2005, according to PhoCusWright. That's compared to traditional travel agencies (via suppliers) which grabbed 32 percent and online travel agencies (OTAs) with 7 percent. However, by 2008, OTAs will take 25 percent market share. Supplier sites will grow to 65 percent, and traditional agencies will shrink to 10 percent.

The most recent issue of Travel Distribution Report offers subscribers even more key details from the PhoCusWright report, which highlight just where the Indian online marketplace will grow and compare 2005 booking numbers with 2008 projections.

For further information on the report, The Emerging Online
Travel Marketplace in India, visit http://store.phocuswright.com/emontrmainin.html.

Posted by TDR at 03:51 PM | Permalink | Comments (0)

Suppliers that sell directly to consumers are on the rise, but online travel agencies (OTAs) won’t go down without a fight.

In fact, lodging suppliers pose the greatest threat to agencies, according to a Sept. 29 press release from companies eVOC Insights and RelevantView, in reference to their recent study on the subject.

The report, titled “The Battle for Loyalty -- Online Travel Agencies vs. Suppliers” compared the customer experience between OTAs and suppliers (e.g., Expedia vs. Mariott) to identify what factors drive purchase preference and determine whether loyalty exists when travel sites reach price parity.

One finding was that consumers are initially more likely to prefer a direct supplier purchase than one from an OTA; however, the overall purchase intent on leading OTAs outperforms suppliers after consumers experience the sites.

In addition, the study indicated that supplier loyalty programs are a key differentiator. Loyalty members will pay more for hotel accommodations and are twice as likely to return, purchase and recommend as non-loyalty members.

Posted by TDR at 09:42 AM | Permalink | Comments (0)

Online travel companies with an eye on the European market have the right idea, experts say.

Travel research and strategy firm PhoCusWright, Inc. conducted a study that revealed almost 40 percent of all types of travel purchased in Europe will be booked online by the end of 2008, according to a Sept. 19 press release.

The transaction volume “will more than double the proportion of 2005,” according to preliminary findings, and over the next three years, online corporate bookings will grow at twice the rate of online leisure and unmanaged business travel.

Further, by 2008, one out of every five euros spent on corporate travel will be transacted online, up from one out of every 20 in 2005. Nevertheless, the percentage of leisure and unmanaged business travel booked online will continue to be significantly greater than that of managed corporate travel, PhoCusWright said.

Posted by TDR at 01:43 PM | Permalink | Comments (0)

What are travelers are most looking for? Travel shoppers continue to demonstrate their price consciousness, points out Matt Tatham, media relations manager at competitive intelligence firm Hitwise. His comment is informed by Hitwise data from this summer which reveals that “cheap” shows up at number 6, 11, 14, 18, 19, 22, 23 and 29 out of consumers’ top 30 Internet search phrases.

To take a look at those facts -- and more -- see the latest issue of Travel Distribution Report, which comes out electronically today. Find out the most popular terms typed into a search engine over a four week period that resulted in traffic to travel-related Web sites.

Here's a sneeak peak: Over the four weeks ending Aug. 12, 2006, the most popular search term was “travelocity,” representing 2.79 percent of all search terms that delivered users to Web sites in the “Travel: Agencies” category.

Not a TDR subscriber? You can be. Just click to read a sample issue and join our growing list of loyal readers.

Posted by TDR at 11:15 AM | Permalink | Comments (0)

Research by PricewaterhouseCoopers LLP has pinpointed the highest 2-year boost in international travel to the U.S. since 1996.

The number of incoming travelers from countries other than Canada and Mexico increased 6.7 percent in 2005, according to a recent release. The number of international travelers to the U.S. increased by 20.3 percent during both 2004 and 2005, which is a big jump but does not yet attain 2000 and 2001 levels.

Factors deterring international travelers include lingering travel concerns, global economic slowdown and stricter U.S. visa/immigration policies, said PricewaterhouseCoopers. However, recovery has been spurred by an acceleration of global economic performance, a week U.S. dollar and Department of Commerce marketing attempts to put a positive spin on the U.S. as a tourist destination.

In 2005, there were 22 million international travelers to the U.S. (excluding those from Mexico and Canada), compared to 26 million at the peak in 2000.

Posted by TDR at 10:47 AM | Permalink | Comments (0)

China and India are well on their way to becoming online travel powerhouses.

And while Europe’s online travel market is still blossoming, growth in the U.S. online travel market is beginning to slow, according “Online Travel Worldwide,” an eMarketer study released August 3.

The report pointed out several key areas for experimentation within all regions that could lead to continued growth. For example, the U.K. market could test out user-generated content, RSS feeds and other technologies that have worked for the U.S. online travel market. The U.S. online travel market could experiment with the Asia-Pacific region’s mobile phone applications.

By trying out the technologies and marketing programs used in different regions, travel companies can shorten development times and avoid costly mistakes, the study noted.

Posted by TDR at 04:01 PM | Permalink | Comments (13)

Chinese consumers have a voracious appetite for online travel products.

More than half of Chinese travelers have purchased flight online and 43 percent have booked a hotel room over the Web, according to a survey conducted by travel search engine Qunar.com.

Chinese travelers are quickly shifting to online purchases because “the Internet provides consumers with a reliable and efficient medium to reach companies who offer great deals,” explained Tan Zhi Guo, CEO of airline ticketing agency 96115.

More than 60 percent of Chinese consumers rely on call-center company Ctrip and search engines Baidu and Qunar when searching for travel information.

Posted by TDR at 05:00 PM | Permalink | Comments (0)

Today's guest blogger is Gregory Saks, director of market intelligence service Compete’s new Travel Practice. The new division analyzes consumer travel planning and reservation behaviors across more than 2,000 travel sites in more than 20 categories, using Compete’s extensive database of more than 2 million consumers. Here Saks presents Compete's analysis of supplier-OTA share shift in the first quarter of this year:

While online travel agencies (OTAs) remain the largest individual destinations for travel research, it is suppliers who are capturing the majority of online bookings.

An analysis of online transactions in the air and lodging categories during the first quarter of 2006 showed that:

— Hotel chains captured 52% of online hotel bookings versus 48% of hotel bookings transacted on OTAs.

— Airlines captured 29% of online flight bookings versus 71% of flight bookings transacted on OTAs.

In both of these categories it is clear that suppliers have been successful in marketing their Web sites. Programs such as best rate guarantees and no booking fees have siphoned interest away from agencies. While airlines have been more effective than hotels, that is partly due to the performance of one carrier.

In each month of Q106, there were about 4.2 million consumers who booked a flight online. More than 70% of these bookings took place at carrier sites directly (i.e., United.com, JetBlue.com); the remainder took place at OTAs.

Interesting: Southwest is one of the main drivers for the amount of carrier-direct bookings. Consumers can't book Southwest flights on OTAs, and the carrier’s site accounts for over 1 million bookings per month.

Essentially, Southwest is single-handedly increasing the market share of carrier-direct sites. If you took them out of the picture, the picture looks more balanced: The remaining carriers would capture 60% of online bookings directly with agencies handling the other 40%.

Posted by TDR at 03:42 PM | Permalink | Comments (2)

Today's guest blogger is Henry Harteveldt, VP of travel research for Forrester Research. Harteveldt took a few moments to share his thoughts on the Conference Board's report that claims online travel has reached a two-year low:

It seems the Conference Board’s study may have overlooked some points that the travel industry itself is aware of:

a) Women tend to do more of the travel planning than men, unlike the results of the Conference Board study which stated the opposite to be true.

b) Most people make their travel plans before the summer, not during it. It’s almost July, so it’s likely that many travelers have already completed their summer vacation research by now.

c) And, finally, travel has not been thwarted by rising fuel costs. In fact, many flights are already sold out.

Do you have a comment about a story or news item? Tell it to us and your thoughts could become a blog feature! Simply e-mail us your ideas or leave a comment below and we'll take it from there.

Posted by TDR at 02:04 PM | Permalink | Comments (0)

Think nothing can burst online travel’s bubble? Think again.

Increased travel costs may be keeping travelers from using the Internet to make their summer travel plans, according to the Consumer Internet Barometer, released jointly June 21 by The Conference Board and custom research company TNS.

Only 28 percent of men surveyed said they planned to research airline rates and availability online during the summer, compared 41 percent just two years ago. The percentage of women using the Web to research and plan remained constant (25 percent).

“Vacation plans may have fallen victim to higher gas prices, rising travel costs and an increasingly uncertain economic outlook,” said Lynn Franco, director of The Conference Board Consumer Research Center.

The study found that while more men than women use the Web to make travel arrangements, overall consumers spend more time researching travel online than booking it there.

However, online bookings for air travel in particular do seem to be growing, according to new statistics from SITA’s Airline IT Trends survey, released June 22.

The global average of online flight ticket sales climbed 8 percent from 20 percent last year -- that’s approximately 560 million online bookers out of the airline industry’s two billion passengers, the study found.

Posted by TDR at 04:17 PM | Permalink | Comments (223)

Travel marketers have a new option for understanding and anticipating online travelers’ behaviors.

Marketing intelligence service Compete, Inc. has launched a new practice to target the $70 billion online travel industry, the company announced June 20.

“The competition for traveler attention and loyalty is intensifying,” said
Gregory Saks, director of Compete’s new Travel Practice. “Prompted by ongoing growth in the online travel industry, marketing executives are looking for new ways to improve online channel effectiveness and drive traveler mindshare,” he added.

The Travel Practice will increase Compete’s industry coverage and provide travel marketers with intelligence to capitalize on the 50 million travelers researching and booking online each month.

Compete’s new service analyzes consumer travel planning and reservation behaviors across more than 2,000 travel sites in more than 20 categories, using Compete’s extensive database of more than 2 million consumers.

Posted by TDR at 02:51 PM | Permalink | Comments (0)