Travelers turn to seller sites for info

by Tom Johansmeyer on

Where do you go to get information on destinations and travel? Well, you obviously come here – at least you did this time. And, we appreciate it. Despite the value of independent sources of travel news and deals, it’s the seller sites that are attracting all the action. Social media is moving the travel market, according to the latest research from industry research firm PhoCusWright, with user-generated content on online travel agencies (OTAs) leading the charge.

In 2008, hotel reviews on OTA sites accounted for only 52 percent of traveler-written reviews, with traveler review sites (not associated with an OTA), such as TripAdvisor, accounting for 46 percent of reviews written. Last year, the OTA sites were good for 74 percent of the hotel reviews that showed up on the web.

“Traveler review sites – led by TripAdvisor – created and drove the growth of the traveler hotel review category, demonstrating the potential role of user-generated reviews in the trip-planning process,” said Douglas Quinby, senior director, research at PhoCusWright. “The travel industry obviously took notice, and the major OTAs have remarkably stepped up their game in capturing reviews from their customers and incorporating the content into their hotel shopping path. Travel companies must keep a close eye not only on review sites such as TripAdvisor, but the growing volume of review content on OTAs as well.”

Five predictions for the European travel market

by Tom Johansmeyer on

The end of the year is the time for all kinds of predictions for the next one. Usually, I treat such conjecture as the bullshit that it is, but when PhoCusWright puts out a list of what’ll happen for the travel market, I tend to take it a little much more seriously.

The worldwide recession is still squeezing the European travel market, but the online sector is likely to be the star next year, as it was in 2009. Consumers are turning to the web more and more to book their travel in Europe, and this will have a profound effect on how travel products and services are sold.

1. Up a third: PhoCusWright forecasts that the online segment of the travel market will hit 34 percent of the entire industry in Europe in 2010. Customers will turn to the internet to find better bargains, accelerating the shift from offline to online. At the end of 2008, online accounted for only 28% of European travel sales.

2. Priceline’s the one to beat: Priceline has lagged the three largest online travel agencies – Expedia, Orbitz and Travelocity – for years, but Priceline has seized some serious market share through the travel recession, due in large part to its acquisition of European company Booking.com. Priceline could take the #2 spot next year and will be well-positioned for the future.3. Metasearch arrival: Finally, there will be a solution to the fragmented online travel market! PhoCusWright forecasts the growth of sites that search across sites, which makes sense given that financial concerns are driving travel buyers to the web instead of traditional venues. There’s demand already, and economic conditions will feed the trend.

4. Big in Germany: Germany’s been gaining ground in the European travel market. In 2008, the country was responsible for only 17 percent of the space. Look for it to hit 20 percent by 2011, PhoCusWright says.

5. Look south for sunshine: Online penetration has topped 40 percent in the United Kingdom, and France and Germany are making progress. The easy wins are in the past. So, the travel business is looking toward the emerging travel markets of Europe: in the south and east.

There’s plenty on the agenda for the European travel market next year. Even in what will continue to be a tight economic environment, there’s plenty of room for growth. No doubt, the most important factor will be the recession, which will shape travel company behavior by driving buyers to seek better deals. The perception that online is the place to save will accelerate the push to electrons.

The online travel market moves past pulling the trigger

by Tom Johansmeyer on

If you think you need to sell seats or rooms to be a player in the online travel industry, think again! Travel research firm PhoCusWright found in a new survey that the online travel marketplace has evolved over the past few years to include a wide selection of non-transactional travel sites that serve as “pointers” to those online destinations were eager travelers can melt some plastic. But, the publication of regular content — at sites like Gadling, for example — is where many travel buyers are forming their relationships, leading to the possibility that the strongest online travel brands may not have any selling capabilities (or interests in developing them) at all.

For companies in the business of selling travel online, this opens a new range of considerations, in which relationships with non-transactional content providers have to be managed carefully. After all, the seller wants to cultivate the customer’s loyalty but also wants to ensure a steady stream of traffic from complementary businesses. “Metasearch” sites, like Kayak, which scour several online travel sales sites, are also playing an increasingly important role in the online travel dynamic.

“Before consumers ever hit the ‘book now’ button, they undergo a whole process of gathering, qualifying and comparing travel options,” says Carroll Rheem, director, research at PhoCusWright. “Both metasearch and review sites are designed to help consumers in this often cumbersome decision-making process. Therefore, it is not surprising that the popularity of these types of Web sites has grown significantly over the past several years.”

As of the end of June this year, Kayak was the top met search site on the web, with close to 7 million monthly unique visitors. Rheem observes that Kayak is among “the most exciting brands in the travel space today.” She notes, “We wanted to take a closer look at which elements of their content and functionality consumers are gravitating toward and what impact they have on booking behavior.”

Markets tend to change during periods of upheaval, so look for the next few years to yield a completely different landscape online. The online travel agencies and other sellers will probably become spots for trigger-pullers only, with the relationship being owned further up the travel information supply chain. Travel buyers will form their relationships with sources of information, not sources of inventory.

Europe tells several different online travel stories

by Tom Johansmeyer on

The EU may have brought us closer to having one Europe, but there certainly isn’t one European travel market. The latest report from travel industry research firm PhoCusWright sees the French market staying flat through 2011, with strong growth occurring in Germany. In the United Kingdom, the travel business will continue to tighten. Meanwhile, the mouse-clickers are in Scandinavia, which is leading the charge in online bookings.

The UK, France and Germany dominated the online leisure and unmanaged business travel market in 2008, accounting for 67 percent of all bookings. But, the UK’s position has been eroding and will continue to do so for the next two years. In 2008, it accounted for 31 percent of the leisure and unmanaged sector online, but PhoCusWright forecasts a drop to 26 percent by 2011. Blame the value of the pound for that one: devaluation will contribute to an erosion an actual buying activity. France owned 19 percent of this market in 2008 and isn’t likely to change. The real growth story, among the largest markets, is Germany. In 2008, it represented only 17 percent of the leisure and unmanaged business market … but PhoCusWright expects it to hit 20 percent in 2011.

Online penetration is greatest in Scandinavia, which now leads Europe. In 2008, this corner of Europe passed the UK, with 45 percent of travel booked online in Scandinavia compared to 40 percent in the UK. And, it isn’t slowing down. Click-and-buy is expected to break the 50 percent mark in 2010, while it will take longer for the UK travel market to get there. France’s online penetration is only 30 percent, with Germany at 24 percent but growing.

Online travel sales stay stable in France

by Tom Johansmeyer on

Despite a dismal global travel market, the online sector in France is still stable. A new report by PhoCusWright says that online leisure and unmanaged business travel activity will gain three percentage points this year, edging up to 33 percent of the total French travel market. Online bookings are projected to stay flat, but the overall travel market is forecasted to shrink by 8.7 percent, which is why online’s share of the pie will go up.

Carroll Rheem, director of research at PhoCusWright, says, “French consumers have adjusted their travel habits in line with the nation’s relatively modest recession in 2009 and French suppliers have suffered less than those in other large leisure market destinations like Spain and Italy.”

In France, traditional airlines have led the total market decline, expected to fall 14 percent this year. Hotels, on the other hand, are only likely to decline 6 percent. The online travel agency market continues to be fragmented. Growth will slow down considerably this year, but the online travel agencies will still gain some play from passengers looking for bargains.

Rheem continues, “In uncertain economic times, consumers need to feel confident that they are getting the best value for their money.” Additionally, Rheem says, “Online travel agencies are certainly benefiting from this trend, but competition between them is also extremely fierce. The line between ‘traditional’ and online travel agencies is murky, and French OTAs must compete in a multichannel landscape.”