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The future of travel search - A PhoCusWright research sponsored by Amadeus

The future of travel search - A PhoCusWright research sponsored by Amadeus

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The future of travel search The future of travel search Document Transcript

  • EMPOWERINGINSPIRATION:THE FUTURE OFTRAVEL SEARCH ® Researched and Written by Carroll Rheem Sponsored by
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012 PhoCusWright Inc. 1 Route 37 East, Suite 200 Sherman, CT 06784-1430 USA +1 860 350-4084 +1 860 354-3112 fax www.phocuswright.com Empowering Inspiration: Philip C. Wolf Chairman The Future of Travel Search Carol Hutzelman Senior Vice President Bruce Rosard Researched and Written by Vice President, Carroll Rheem Sales and Marketing Lorraine Sileo Vice President, Research Sponsored byPhoCusWrights Empowering Inspiration: The Future of Travel Search is published byPhoCusWright Inc. The information contained herein is derived from a varietyof sources. While every effort has been made to verify the information, the publisherassumes neither responsibility for inconsistencies or inaccuracies in the data nor liabilityfor any damages of any type arising from errors or omissions.©2012 PhoCusWright Inc. All Rights Reserved.
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012 About PhoCusWright PhoCusWright is the travel industry research authority on how travelers, suppliers and intermediaries connect. Independent, rigorous and unbiased, PhoCusWright fosters smart strategic planning, tactical decision-making and organizational effectiveness. PhoCusWright delivers qualitative and quantitative research on the evolving dynamics that influence travel, tourism and hospitality distribution. Our marketplace intelligence is the industry standard for segmentation, sizing, forecasting, trends, analysis and consumer travel planning behavior. Every day around the world, senior executives, marketers, strategists and research professionals from all segments of the industry value chain use PhoCusWright research for competitive advantage. PhoCusWright enables clients to bolster productivity through superior staff training and education. Scalable products, customized programs and cost-effective delivery improve the performance of thousands of travel, tourism and hospitality employees worldwide. To complement its primary research in North and Latin America, Europe and Asia, PhoCusWright produces several high-profile conferences in the United States and Germany, and partners with conferences in Canada, China and Singapore. Industry leaders and company analysts bring this intelligence to life by debating issues, sharing ideas and defining the ever-evolving reality of travel commerce. The company is headquartered in the United States with Asia Pacific operations based in India and local analysts on five continents. PhoCusWright is a wholly owned subsidiary of Northstar Travel Media LLC.. PhoCusWright Inc. 1 Route 37 East, Suite 200 • Sherman, CT 06784-1430 USA +1 860 350-4084 • +1 860 354-3112 fax www.phocuswright.com This article is published by PhoCusWright. The information herein is derived from a variety of sources. While every effort has been made to verify the information, the publisher assumes neither responsibility for inconsistencies or inaccuracies in the data nor liability for any damages of any type arising from errors or omissions. All PhoCusWright Inc. publications are protected by copyright. It is illegal under U.S. federal law (17USC101 et seq.) to copy, fax or electronically distribute copyrighted material beyond the parameters of the License or outside of your organiza- tion without explicit permission.©2012 PhoCusWright Inc. All Rights Reserved. Page iii
  • Empowering Inspiration: The Future of Travel Search February 2012 Foreword How will travelers search for travel online in the future? How will technology evolve in the future to provide a smarter user experience? How will the future of travel search impact travel professionals’ businesses? Millions of travelers start planning their holidays by exploring different destinations via their computers, tablets and mobile apps or even engaging with their social networks – all facing various degrees of satisfaction during the travel planning process. In today’s economy, consumers are cautious about where and how much they spend and wish for a seamless shopping experience. When every cent counts, it is crucial for travel professionals to understand travelers’ behavior to influence those with the greatest poten- tial – and ensure they develop the best strategies for engaging consumers. Amadeus commissioned this study to understand how consumers will search for travel in the future. Over ten years have passed since the first online travel website was launched. Today, we believe we are at the forefront of a technological evolu- tion in travel which we refer to as Online Travel 3.0. This concept recognizes the power shift from sup- pliers to retailers and to end-consumers, who have increasingly become expert travelers. It is therefore key for Amadeus to understand how travel shoppers are currently searching for travel now and in the future. ‘The discretionary traveler- a sample of trend setting experts from six different markets (US, UK, Germany, India, Russia and Brazil) was selected in order to understand how travelers behave in the search, shop and book processes. This is the first PhoCusWright consumer travel study to include both Russia and Brazil. For Amadeus, it is essential to understand travelers’ needs and future trends, and drive technology evolutions that help our travel agency and tour operators customers to best engage with their own customers. Although tech- nology, especially in the booking arena, has come a long way, it is only the beginning: travel is definitely a great booster for technology evolution and we foresee more revolutionary developments to come that will affect the future of travel search – and the success of travel professionals’ businesses. Perhaps even sooner than we may think. The aim of the study is to stimulate discussion within the industry and there is no doubt that it will also open the door to new opportunities: • Opportunities to inspire and convert customers when addressing different levels of frustration; • Opportunities to provide a smarter user experience online; • Opportunities to optimize content customization tools to increase conversions and grow revenues We hope you will enjoy reading the study and look forward to engaging with you in building together a world of opportunities! Stéphane Durand Director, Leisure and Online©2012 PhoCusWright Inc. All Rights Reserved. Page v
  • Empowering Inspiration: The Future of Travel Search February 2012Empowering Inspiration: the Future of Travel SearchContentsOverview, Methodology and Key Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Key Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2The Discretionary Traveler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Key Discretionary Traveler Characteristics by Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6The Journey Before the Trip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Section Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 The Decision Timeline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 The Destination Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Shopping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Booking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Patches of Turbulence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Section Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Destination Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Shopping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Booking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20The Appetite for a New Recipe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Section Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Flexibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 New Ways of Searching . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25The Progress of New Media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Section Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Mobile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Social Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302020 Foresight: The Future of Travel Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Hardware Agnosticism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 The Truly Private “Private Sale” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Cumulative “Intelligence” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Smart Systems and the Virtual Personal Assistant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Biometrics and the “Creepy Line” Creep . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36©2012 PhoCusWright Inc. All Rights Reserved. Page vi
  • Empowering Inspiration: The Future of Travel Search February 2012List of FiguresFigure 1 Discretionary Traveler Incidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Figure 2 Key Discretionary Traveler Characteristics by Market . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Additional Market Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Figure 3 Decision Timelines (Average Number of Days) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Figure 4 Information Sources of Decision to Visit the Destination . . . . . . . . . . . . . . . . . . . . . . . 12Figure 5 Websites Used for Destination Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Figure 6 Information Sources for Travel Product Shopping . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Figure 7 Websites Used for Travel Product Shopping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Figure 8 Travel Products Booking Methods: Air Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Figure 9 Travel Products Booking Methods: Lodging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Figure 10 Booking Methods: Air . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Figure 11 Booking Methods: Lodging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Figure 12 Frustrations When Selecting Destination Online . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Figure 13 Frustrations When Shopping for Travel Products Online . . . . . . . . . . . . . . . . . . . . . . . . 21Figure 14 Frustrations When Booking Travel Products Online . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Figure 15 Destination Flexibility (Last Discretionary Trip) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Figure 16 Annual Household Travel Expenditure (US$) by Destination Flexibility (Last Discretionary Trip) . 25Figure 17 Flexibility in Travel Aspects: Somewhat Flexible + Very Flexible . . . . . . . . . . . . . . . . . . . 26Figure 18 Usefulness of Search Capabilities (“Very Useful”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Figure 19 Interest in Online Activities via Mobile Phone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Figure 20 Interest in Activities Through Social Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32©2012 PhoCusWright Inc. All Rights Reserved. Page vii
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012Overview, Methodology and Key FindingsOVERVIEW One of the perennial challenges in (not just where they were during theEvery day, millions of individuals leveraging consumer research to past year), or risk being left behind.around the globe journey far from isolate future trends, particularlythe comforts of home to explore new when examining behaviors, is that As the goal of this study is to provideplaces and cultures. And every day, the survey results are most reliable insight into trendsetting consum-more of these travelers are coming when anchored in the past – cap- ers, it is important to recognize thatfrom nations with a freshly-minted turing behavior over some previous the results presented will not reflectmiddle class. While some traveler increment of time (i.e., the pre- today’s entire traveling populationneeds are universal, local dynamics vious 12 months). Consumers are – especially with metrics concern-add distinct characteristics to each inherently better able to accurately ing technology adoption and socialmarketplace and can make or break describe what they have recently media. Particularly in emerging mar-enterprising retailers. But a snap- done (particularly when answering kets, discretionary travelers do notshot of current traveler behavior is complex or detailed questions) than represent the mainstream, as a small-just part of the big picture. As a what they will do in the future er portion of travelers in these mar-dynamic industry consistently at the – especially when that behavior kets are able to afford purely leisureforefront of innovation, the busi- may involve some sort of change. discretionary holidays. Instead, theyness of selling travel requires players represent the early adopters whoseto keep a sharp eye on the future. Therefore, rather than examining current behaviors and preferences how the grand mass of all travelers are leading indicators for the future.With this in mind, Amadeus com- plan their trips and pressing respon-missioned PhoCusWright to con- dents to extrapolate how they might METHODOLOGYduct a study of consumers around like to do things years from now,the world to understand how they this study focuses squarely on trend- PhoCusWright fielded an onlinemake leisure travel decisions online setters – high opportunity travelers consumer survey in April 2011today, and how they would like to who are the best indicators of future through Global Market Insite, Inc.make those decisions in the years to trends. These are the travelers who to adults (18 years or older) in thecome. Six key markets were targeted latch onto new technologies early U.S., U.K., Germany, India, Russiato provide a diverse geographic range (and tell their friends about them). and Brazil. To qualify for participa-of perspectives: the U.S., the U.K., They are valuable consumers who tion in the study, respondents hadGermany, India, Russia and Brazil. choose their own destinations, spend to indicate they had taken at leastTo yield specific insights into how enough to really think about their three overnight trips in the past 12travelers would like to navigate their holidays and care about the process months that included paid lodging,options online in the future, this that gets them there. They are expe- air travel and/or long-distance rail.study was designed around a particu- rienced holiday planners who go At least one of these trips had to belar kind of traveler: the discretionary through the process often enough to a discretionary trip. The term “dis-traveler. Discretionary travelers are understand their options and what cretionary trip” refers to a trip takenthose who take “true” holidays that is missing from the travel planning to a destination that was chosenare not constrained by social obliga- tools available to them. When plan- independently by the respondent,tions (such as attending a wedding) ning strategy in the ever-evolving as opposed to trips that have a pre-or other outside influences. Why not travel arena, companies must think determined destination like visitsjust study the general traveling public? ahead to where traveler behavior and with friends/family. Respondents preferences will be years from now were also required to have played©2012 PhoCusWright Inc. All Rights Reserved. Page 1
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012an active role in planning their lei- biggest issue in travel planning for The Appetite for asure trips. Consumers who quali- most markets is perceived to be New Recipefied for the study are referred to as information overload. But more“discretionary travelers.” The term specifically it is the organization New ways in which travelers would“developed markets” refers to the and navigability of content that like to search for travel options.U.S., U.K. and Germany; “emerg- typically discourages people, alonging markets” refers to India, Russia with a healthy dose of irrelevant • It’s time to think outside the (cityand Brazil; “lodging” refers to the information. Summarizing infor- pair/travel date) box. Cateringbroad range of paid accommoda- mation at a high level, then allow- to the substantial group of travel-tions – hotels and other nightly ing consumers to drill for more ers who do not have a destinationpriced lodging products, as well detail can help cut the clutter. in mind is advantageous for travelas timeshares and vacation rentals. websites, as these consumers often • Frugality fuels frustration. Many spend more money on travel thanPhoCusWright surveyed a total of consumers feel like they are making others. Attracting shoppers earli-43,537 consumers to obtain the final a hasty, potentially regrettable pur- er in the travel planning processrespondent pool of 4,638 qualified chase if they do not shop around. allows websites to go higher upresponses (see Section Two for coun- In addition, the pricing volatility the purchase funnel – potential-try details).The weighted respondent resulting from the practice of yield ly broadening their audience andpool can be projected with confidence management has created substan- reducing their reliance on searchto the adult populations with Internet tial anxiety about when to book. and referral traffic. A substantialaccess within the corresponding It can feel like a game of chick- portion of travelers is eager for newcountries. The error interval for anal- en to the traveler who wonders ways to determine where to go andysis is +/–3.46% at a 95% confidence if he should wait or book. Tools what to buy. Now that Google haslevel for each country. Significant that support price benchmarking thrown its hat into the flight searchdifferences noted in this report were for shoppers can help address this ring, it is more essential than everidentified at a 95% confidence level. booking anxiety. for online travel agencies (OTAs) and metasearch players to continueIn addition to consumer insights, • Destination decisions need sup- innovating and keep pace with newPhoCusWright conducted 18 port. Roughly half of discretion- ways of searching.executive interviews with thought ary travelers in developed marketsleaders around the world to and nearly two thirds in emerging • New combinations can unlockgain industry perspective on markets do not have a specific des- new possibilities. Enabling searchwhere travel search is headed. tination in mind when they start across multiple destinations would their trip planning process. Yet, be helpful for many shoppers, butKEY FINDINGS it is not easy to browse destina- can easily yield an unwieldy vol- tions on most travel websites today. ume of results. Multi-destination Especially for inexperienced travel- search parameters must thereforePatches of Turbulence ers coming from emerging markets, be paired with others (traditional or there is a need for better roll-ups otherwise) to keep results relevant.The frustrations and pain points and condensed snapshots of infor- For example, melding budget andtravelers face when planning and mation such as seasonal tempera- interest-based parameters wouldbooking travel. ture/precipitation and price ranges. enable consumers to search for Freshness and accuracy of destina- beach vacations anywhere that cost• It’s not really too much infor- tion information is also an issue, 1,000 dollars or less. Companies mation, but it feels like it. The particularly for emerging markets. that build flexible, layered search©2012 PhoCusWright Inc. All Rights Reserved. Page 2
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012 parameters can then begin to align within the original premise of these gaming system, TV, etc.) will once more closely to the way travelers sites – to keep up with people they again converge. instinctively think about their trips. know. However, travelers in emerg- ing markets are less likely to have • The Truly Private “Private Sale”: grown accustomed to planning Marketplaces around the worldThe Progress of New Media and booking travel online over the have been flooded with promo- years. Therefore, social networks tions, deals and now flash saleHow travelers want to use mobile may become an instinctive source brands that tout deep discountsdevices and social networks when plan- of information for both user and with no context of whether anning and sharing travel experiences. company-generated content (such individual would be interested in as pricing and room descriptions) the product or not. There is a dif-• Convenience before complexity: in emerging markets. In developed ferent kind of flash sale, however, Across the range of travel-related markets, travelers are not as likely that technology will eventually mobile activities, travelers show the to seek company-generated content make possible. With consumer seg- most interest in functionality that on their social networks because mentation and behavioral targeting makes relevant bits of scattered they habitually use other web- becoming ever more sophisticated, information convenient and easy to sites like OTAs, supplier sites, etc. demand management will be able retrieve. Tasks that facilitate travel- The differentiation between what to go step further, allowing sellers ing convenience via mobile device people do on company websites to microtarget promotions to spe- (boarding pass, check-in) also versus social networks may there- cific consumers and offer a truly command strong interest. These fore become increasingly unclear in private sale that drives relevance for well-received features that address emerging markets. both the buyer and seller. the immediate needs of travelers on the road have a substantially 2020 Foresight: • Cumulative “Intelligence”: With broader appeal in comparison to The Future of Travel Planning hundreds of options for even a des- more complex tasks like making tination/date-constrained search, new reservations. An exploration of how new technolo- shoppers are often overloaded. gies may change travel planning in Eventually though, regardless of• Power to the peers: Whatever the the future. the form of input, programs will be medium – online, offline, from able to “learn” from an individual’s friends or strangers – consumers • Hardware Agnosticism: Over behavior over time. When someone hunger for fellow traveler perspec- time, the distinctiveness of mobile executes a search for the fifth time, tive. In emerging markets, advice platforms will not be so important. the results should be more relevant most often comes directly from The limitations of clumsy fingers than the first time. Perhaps it will friends and family. But all over the on small screens may be here to never be truly 1:1, but microse- world, anonymous traveler reviews stay, but voice and image/visual gmentation will at the very least and advice received through social recognition will make input easier. help companies analyze behavior networks are becoming ever more Stored information will become and deliver increasingly intelligent popular flavors of peer opinion. more sophisticated, enabling trav- results. elers to move beyond the con-• Posting today, booking tomor- fines of individual activities on • Smart Systems and the Virtual row? Consumers in developed individual devices. Ultimately, the Personal Assistant: While we markets tend to use social networks “Splinternet” created by platform would all love a robot house ser- for very specific things, and stay proliferation (PC, phone, tablet, vant to do our chores, the notion©2012 PhoCusWright Inc. All Rights Reserved. Page 3
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012 that devices themselves will be this information may act as a vir- their offerings accordingly. As with “smart” and interconnected is more tual personal assistant – recogniz- the virtual personal assistant, the likely (at least for 2020). Computer ing and processing inputs from the prohibitive issue is privacy and chips might be in everything from sites we visit and what we do on the “creepy line.” The notion of coffee machines to light fixtures. In them – and interact with sites on privacy and the mental line that these household examples, timers our behalf. defines what is acceptable is con- can already regulate certain activi- stantly weighed against the benefits ties. The difference will be that • Biometrics and the “Creepy Line” of sharing information. As we con- in the future, the manual nature Creep: Biometric input (such as sider the possibilities, we should of programming them will likely facial expression and heartbeat) also bear in mind that elements be replaced by intercommunica- could someday be read as mun- that seem to cross the creepy line tion between devices. In the future, danely as location is today, and today, might be readily accepted in we will still use different websites companies could potentially utilize a decade’s time. for different things. However, a the information to ascertain our program that collects and stores moods and reactions and adapt©2012 PhoCusWright Inc. All Rights Reserved. Page 4
  • PhoCusWrights Empowering Inspiration: The Future of Travel Search February 2012The Discretionary TravelerAs the overarching purpose of this • Trendsetters point to where the tives of their trendsetters. Withstudy was to understand consumer market is headed. Years ago, U.S. such a strong rate of growth andneeds for future development, the online companies that assumed overall change in emerging mar-target respondent base was designed Europe would follow similar kets, the behavior of the generalto represent trendsetting discretion- trends learned that such assump- traveler population in the past 12ary travelers – the segment that has tions left them ill-equipped to win months (in the absence of histori-the most sophisticated shopping – they had to learn to adapt to cal trending) is not an ideal indica-needs. The consumers examined in each new market (or acquire local tor of what the next few years havethis study are not the mainstream – players). Rather than examining in store. Trendsetters like discre-they take holidays as they please, plan trends in developed markets and tionary travelers, however, reflectonline and travel frequently enough assuming other markets will fol- unique marketplace characteristicsto know what they like and dis- low in the future, this study seeks while providing direction for thelike. The methodology was designed to find contrast between a broad future.this way for several key reasons: range of markets and the perspec- Figure 1 Discretionary Traveler Incidence 2010 Internet Reach* U.S. 58% 18% 2% 19% 79% 2% 54% 20% 1% 23% U.K. 2% 85% 1% Germany 61% 17% 2% 18% 82% 48% 37% 2% India 3% 10% 8% Russia 55% 20% 2% 20% 43% 3% Brazil 41% 39% 2% 13% 41% 4% Took fewer than three trips Did not select destination independently Did not plan trip online Did not play an active role in planning trips THE DISCRETIONARY TRAVELER *Source: ITU World Telecommunication / ICT Indicators Database Question: Which of the following, if any, have you done while traveling for leisure in the past 12 months? In the past 12 months, how many overnight trips of each type did you take that required the purchase of travel products (such as airline tickets, lodging and long-distance rail)? Of the leisure trips you took in the past 12 months, how many trips, were to the following? Which of the following, if any, have you done online (via computer or mobile device) for your lei- sure travel in the past 12 months? Please indicate who played an active role in planning your leisure trips taken over the past 12 months? Note: Brazil has 2% under 18 years of age, India and Russia each has less than 0.5% 18 years of age. Base: Internet users who travel for leisure (Unweighted n – U.S. 7,374; U.K. 5,411; Germany 6,844; India 9,450; Russia 5,471; Brazil 8,987) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.©2012 PhoCusWright Inc. All Rights Reserved. Page 5
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012• Only discretionary travelers travelers are experienced enough stantial portion of Indian (37%) choose their destination. To be in the process of planning to have and Brazilian (39%) travelers were able to provide insight into the informed opinions. As the study excluded because they did not full travel planning process, includ- explores complex perspectives such engage in the destination selection ing destination selection, target as frustration points and website – their trips were constrained by respondents must participate fully functionality, respondents were other influences. In India, spiritual in the process. Destination selec- required to have taken at least three and religious activities often dic- tion represents one of the most trips in the past year to establish tate leisure travel. In Brazil, visiting complex decisions a traveler makes that they have experience with the friends and relatives and social events in the process of planning a trip. tools available today. are common influencing factors. Travelers who do not take discre- tionary trips would not be able to The percentage of Internet users KEY DISCRETIONARY provide a description of their actual who qualify as discretionary trav- TRAVELER CHARACTER- behavior/experienced perspective elers is strongest in the U.K. and ISTICS BY MARKET with regard to this key phase of Russia, at 23% and 20%, respec- travel planning. tively (see Figure 1). Though the U.S. percentages are similar for the two• Developed vs. emerging mar- markets, Internet usage is roughly Although the incidence of discretion- ket comparisons can be domi- half as common in Russia as in the ary travelers is not particularly high nated by trends that mask other U.K. Therefore, relative to the entire in the U.S., those consumers who insights. The broad range of mar- population, the U.K. (as well as do fall into this high-opportunity kets explored in this study are Germany and the U.S.) come in well group are big spenders, contributing characterized by huge disparities in ahead of Russia. Over time, as mid- $5,189 per household to leisure trav- basic metrics like Internet access, dle class lifestyles (and consequently, el annually – more than any of the which is roughly 10 times more leisure travel) become more wide- other markets covered in this study. common in the U.S. compared spread in Russia, the percentage of Despite this high level of spend, U.S. to India. Socio-economic differ- discretionary travelers is likely to fall, discretionary travelers are the least ences would overwhelm overall as new travelers are more likely to likely to leave their borders (43% trends if looking at the general start with other types of trips, such as travel internationally). Additionally, traveling population, and underly- visiting friends/family. The U.S. and their trips tend to be relatively short, ing market characteristics would Germany show discretionary traveler not only compared to European mar- become indiscernible. By leveling incidence at 19% and 18%, respec- kets, but emerging markets as well. the “playing field,” we are able to tively. German travel patterns con- The U.S. ties with India for the compare similar consumer targets sistently reveal a longer trip duration smallest portion of leisure trips that across markets, and results are not and a lower frequency of travel com- last seven nights or longer (29%). dominated by basic infrastructural pared to other developed markets. and demographic elements such as Accordingly, 61% of German trav- Though the vast majority of discre- Internet access and income. elers were excluded from the study tionary travelers in the U.S. book because of their low frequency of online (84% for air, 71% for hotel),• Familiarity is a foundation for trips, compared to 58% in the U.S. these results fall slightly behind the constructive feedback. As emerg- U.K., which leads in online book- ing markets are brimming with India and Brazil have the lowest ing percentages. Nevertheless, new travelers, an element of level- percentage of discretionary travelers. U.S. discretionary travelers are ing the playing field requires that Unlike the other markets, a sub- more likely to consider them- 2 PhoCusWright’s European Consumer Travel Report Second Edition©2012 PhoCusWright Inc. All Rights Reserved. Page 6
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012 Figure 2 Key Discretionary Traveler Characteristics by Market U.S. U.K. Germany India Russia Brazil Average age 44 47 44 36 37 36 Average annual household $5,189 $4,642 $4,027 $2,527 $2,912 $5,049 leisure travel expenditure (USD) International travelers 43% 82% 87% 44% 66% 54% Business travelers 42% 31% 49% 78% 83% 78% Early users of new technologies 55% 41% 51% 76% 88% 64% (self-described) Number of websites typically used when shopping for travel 3.7 4.0 4.1 3.6 5.2 4.2 products Online air bookers 84% 88% 75% 70% 63% 73% Supplier website air bookers 36% 46% 34% 17% 41% 47% OTA air bookers 38% 24% 29% 51% 12% 19% Online lodging booker 71% 74% 66% 66% 56% 62% Upscale lodging (four or five-star) 50% 46% 57% 35% 44% 50% consumers Percentage of all leisure trips that 60% 62% 61% 35% 58% 48% are discretionary Percentage of all leisure trips that 29% 37% 41% 29% 50% 31% are at least 7 nights Smartphone owners 57% 60% 65% 76% 86% 73% Facebook users 72% 67% 53% 88% 47% 78% Additional Market Information U.S. U.K. Germany India Russia Brazil 2010 Internet reach* 79% 85% 82% 8% 43% 41% Discretionary traveler incidence** 19% 23% 18% 10% 20% 13% Discretionary traveler sample size (unweighted) 823 822 782 710 761 740 *Source: ITU World Telecommunication / ICT Indicators Database **Incidence among Internet users who have taken at least one leisure trip in the past 12 months Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.©2012 PhoCusWright Inc. All Rights Reserved. Page 7
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012selves early adopters of technology tionary travelers are the most likely to booking (63% for air, 56% for hotel).than their European counterparts. stay in upscale or luxury properties. However, Russia has the highest per- centage of early technology adopt-U.K. India ers (88%); the willingness to adapt to online booking is clearly there.Though the U.K. ranks behind the In some ways, India is the emerg- Russian discretionary travelers tendU.S. and Brazil in terms of expendi- ing market with the biggest con- to take long trips rather than shortture, this result is at least partly driv- trast to the developed markets. With ones, which is consistent with theiren by broader incidence of the discre- Internet penetration still extremely propensity for international travel.tionary traveler lifestyle (the highest low at 8%, the audience for online The vast majority (83%) of themof all markets at 23%); the audience travel is very narrow in relation to travel for business at least once a year.extends far beyond the wealthiest tier the population as a whole. Indianof travelers. Despite having the high- discretionary travelers spend the least Smartphone ownership reflects theest level of online bookings, U.K. dis- on travel across all the markets, most Russian early adopter orientation, ascretionary travelers are the least likely often taking domestic trips influ- 86% carry Internet-capable phones.to consider themselves early tech- enced by social or religious motiva- The three emerging markets all havenology adopters (41%), coming in tions. But despite huge disparities high levels of smartphone ownershipsubstantially below Germany (51%). in general lifestyles, Indian patterns in comparison to the developed mar-Though the age difference is not dra- display several similarities to the U.S. kets, but age is an important factormatic, U.K. discretionary travelers – a relatively low incidence of inter- – discretionary travelers in emergingare the oldest of the group, and age national travel, a tendency to take markets are roughly 10 years youngerplays a very significant role in met- shorter trips, and the use of fewer than their counterparts in developedrics concerning technology adoption. websites in the process of shopping markets. Though Facebook has the for travel. While the first two of these lowest reach among discretionaryGermany three trends are somewhat linked (as travelers in Russia, this finding is international trips tend to be longer) symptomatic of Facebook’s lowerDiscretionary travelers in Germany the low number of websites used market share in Russia comparedspend the least of the developed in both India and the U.S. is the to Vkontakte, rather than ambiv-markets, but similar to the U.K., this result of completely different dynam- alence to social networks overall.trend is driven by the lifestyle being ics in the two markets. Marketplaceaccessible to a broader demographic maturity has consolidated traffic in Brazilrange rather than a pervasively lower the U.S., while marketplace imma-level of expenditure among all travel- turity drives the trend in India. The high travel expenditure amongers. However, the lower propensity Brazilian discretionary travelers isto book online in comparison to the Russia remarkable at $5,049. However, theU.K. and the U.S. is pervasive, and low level of incidence reflects howreflects a characteristic that applies to Despite average travel expenditure exclusive the group currently is; overthe German marketplace as a whole. at a level only slightly higher than in time, the average spend will fall asAnother characteristic of the broader India, Russian discretionary travelers leisure travel becomes accessible toGerman market is the narrower audi- are the most likely among the emerg- a broader audience. Social motiva-ence for social networks. At 53%, ing markets to leave their borders tions are the most common rea-discretionary travelers in Germany (66%). Russia’s cold climate is a like- son Brazilian travelers do not goare substantially less likely to be ly contributor to this dynamic. Of through destination selection as oftenFacebook users than in the U.S. (72%) all the markets covered in the study, as their counterparts, but they areor the U.K. (67%). German discre- Russia has the lowest level of online also slightly more likely than travel-©2012 PhoCusWright Inc. All Rights Reserved. Page 8
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012ers in the other markets to have (or over half (54%) of Brazilian discre- of Brazilian discretionary travelersshare) vacation homes. Fortunately tionary travelers take international also use Orkut, which has a sub-for some Brazilians, they often do holidays. While Facebook usage is stantial following in India as well.not have to travel far to feel like very strong at 78%, it is not the onlythey are on holiday. Nevertheless, social network in town – a majority©2012 PhoCusWright Inc. All Rights Reserved. Page 9
  • PhoCusWrights Empowering Inspiration: The Future of Travel Search February 2012The Journey Before the TripBy the time travelers click the “Book line than emerging markets – the India, where booking with OTAs isNow” button, they have already gone U.K. has the longest timeline (116 more common. In contrast, generalon a journey. They have pored over days) and India has the shortest hotel booking channel trends showpictures, dissected reviews, sought (50 days) OTAs in a stronger position com-advice from friends and relatives and pared to hotel websites.fretted over which flight to book • General search engines are the(and when to book it) – all to make most commonly used website cate- THE DECISION TIMELINEsure the holiday is the best that it can gory in travel planning (both desti-be. This section explores the phases nation selection and travel compo- Travelers spend weeks contemplat-of the trip planning journey from nent shopping), except in the U.S., ing their holiday options and typi-destination selection to booking. where OTAs are more common for cally book months in advance of both phases their trips. This has certainly beenSECTION HIGHLIGHTS the trend in developed markets (see • For airline tickets, the most com- Figure 3). For example, in the U.S.,• Developed markets have a substan- mon booking channel is supplier the average discretionary traveler tially longer travel decision time- websites, except in the U.S. and spends 21 days selecting a destina- Figure 3 Decision Timelines (Average Number of Days) Total Days 108 21 87 Destination Selection U.S. 81 17 64 Shopping 116 16 100 Destination Selection U.K. 99 15 84 Shopping 108 14 94 Destination Selection Germany 84 16 68 Shopping 50 12 38 Destination Selection India 41 10 31 Shopping 83 18 65 Destination Selection Russia 49 12 37 Shopping 105 30 75 Destination Selection Brazil 80 25 55 Shopping 90 days 60 days 30 days Between destination selection and departure Spent selecting destination Between first booking and departure Spent shopping for travel components Question: Please select one answer for each of the following questions: How much time did you spend researching/selecting your destination for this trip? How far in advance of your departure date did you decide to go to that destination? How much time did you spend researching/selecting travel components, such as airline tickets or hotel rooms, before you made the first booking for this trip? How far in advance of your departure date did you book the travel prod- ucts for this trip? Base: Discretionary travelers (Weighted n – U.S. 857; U.K. 801 ; Germany 900; India 791; Russia 763; Brazil 829) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.©2012 PhoCusWright Inc. All Rights Reserved. Page 11
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012 Figure 4 Information Sources of Decision to Visit the Destination 47% 48% 52% Websites via computer 59% 65% 54% 37% 30% 35% Personal recommendations from friends/family 58% 57% 53% 12% 8% 18% Online advertising/email 26% 29% 23% 11% 14% 14% Printed publications, articles or brochures 15% 21% 16% 10% 15% 19% Information in printed travel guidebooks 21% 25% 21% 6% 7% Personal advice from travel 13% 23% professionals/travel agents 19% 24% 8% 8% 7% Websites or applications via mobile device 18% 24% 18% U.S. U.K. Germany India Russia Brazil Question: What sources of information influenced your decision to visit the destination for this trip? Base: Discretionary travelers (Weighted n – U.S. 872; U.K 830.; Germany 913; India 797; Russia 768; Brazil 831) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.tion, and this selection is made 87 destinations. Russians display a size- taken before and planned for after adays before departure. This U.S. dis- able gap of nearly a month between particular trip can have strong impactcretionary traveler will then spend destination selection and shopping, as well. Many travelers do not want17 days choosing travel components and have a relatively short booking to visit the same area or type of des-like airline tickets and hotel rooms, window (37 days). Merchandisers tination back-to-back. In addition,and make his first booking 64 days in India or Russia might find suc- the destination consideration set isbefore departure. In emerging mar- cess promoting July travel in June, frequently illogical because it is oftenkets, however, the planning cycle is but for U.K. retailers it would be based on chance – a friend happenedmuch shorter and varies substantially far too late, as most travelers would to go there and loved it, or an episodeby country. Brazil looks most similar have made their decisions by May. of a favorite show was set there and itto the developed markets overall, but looked amazing. All this complexityBrazilians spend more time weighing THE DESTINATION makes decision-making difficult andboth their destination (30 days) and DECISION building effective tools to supportproduct purchases (25 days) before decision-making even more difficult.committing. Indian travelers have Deciding where to go on a vacation isthe shortest destination lead time an extremely complex decision. Not The most common source of desti-(starting 50 days out), partly because only are consumers considering one nation information is the Internetthey most often travel to domestic particular trip, but the range of trips via computer, but particularly in©2012 PhoCusWright Inc. All Rights Reserved. Page 12
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012emerging markets, word of mouth General search engines are the most oped markets, with the exceptionis very close behind (see Figure 4). common website category for des- of Brazil, which displays patternsTravelers in emerging markets tend tination selection in all markets similar to the developed markets.to use more sources of information except the U.S., where OTAs aregenerally, while travelers in the devel- slightly ahead of them (see Figure SHOPPINGoped markets are not doing as much 5). Nevertheless, referencing OTAslegwork. Discretionary travelers in is most common in India, where Retailers often refer to the concept two out of three travelers use them of the “moment of truth” – when theemerging markets are also younger for destination information. Traveler consumer is in the store looking at aon average than their counterparts in review websites are most popular in shelf of competitive products fromthe developed markets; they do not Russia, while usage is lowest in the which to make a choice. For thehave as much personal experience U.S. Because OTAs are so popu- travel industry, the moment of truthto guide them. Mobile device usage lar in the U.S., travelers often read has never worked that way. Holidaysis more than twice as common in user reviews on OTAs rather than cannot be picked up and examinedemerging markets, most notably in on user review sites. Overall, travel- from a shelf or rack; you cannot smellIndia, where nearly a quarter (24%) ers in emerging markets again show them or try them on. Instead, theof discretionary travelers research a propensity to use more informa- decision-making has always happeneddestinations online on their phones. tion sources than those in devel- far away from the product itself, and Figure 5 Websites Used for Destination Selection 50% 57% General search engines 57% 72% 77% 53% 51% 40% Online travel agency websites 45% 66% 44% 47% 29% 53% Traveler review websites 43% 47% 62% 34% 36% 26% Travel provider websites 33% 53% 36% 38% 25% 23% 33% Destination websites 48% 37% 34% 15% 26% Travel guide websites 15% 38% 44% 29% U.S. U.K. Germany India Russia Brazil Question: What type(s) of websites did you use? Base: Discretionary travelers who use the Internet when selecting a destination (Weighted n – U.S. 432; U.K. 429; Germany 495; India 526; Russia 534; Brazil 497) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.©2012 PhoCusWright Inc. All Rights Reserved. Page 13
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012 Figure 6 Information Sources for Travel Product Shopping 73% 73% 66% Websites via computer 70% 69% 66% 23% 17% 25% Personal recommendations from friends/family 45% 49% 34% 13% 11% 17% Online advertising/email promotions 28% 35% 23% 9% 8% 6% Websites or applications via mobile device 18% 28% 16% 10% 15% Calls/visits to travel professionals/ 19% 25% travel agents for advice 21% 21% 6% 7% Calls/visits to travel providers, such as 13% 23% airlines and hotel companies 19% 24% U.S. U.K. Germany India Russia Brazil Question: What sources of information did you use when comparing and choosing leisure travel products, such as airline tickets or hotel rooms for this trip? Base: Discretionary travelers (Weighted n – U.S. 872; U.K 830.; Germany 913; India 797; Russia 768; Brazil 831) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.relied on nothing but descriptive between emerging markets and the over general search engines. In theinformation. This is why travel is more mature ones is consumers’ reli- shopping phase, however, the OTAso well-suited for the online medi- ance on sources of information other lead is much stronger at 49% ver-um, which has vastly improved the than websites. Travelers in developed sus 38% for search. Indian travel-quantity and quality of travel infor- markets often do all their planning ers again show the most widespreadmation. Through clarity, real-time online, whereas those in emerging use of OTAs overall at 67%, whichaccuracy and breadth, online travel markets tend to use a broader range places OTAs in a tie with searchinherently empowers consumers. of channels. Mobile options attract a for the top spot. Russia leads in notable audience in emerging mar- search usage at 71%, as well as inIn developed markets, the domi- kets, but the results should not be the use of traveler review websitesnance of online channels is therefore interpreted as definitive evidence (52%). Generalist review site otzyv.overwhelming; nearly three quarters of the “leapfrog effect.” Most of ru has achieved widespread popu-(73%) of travelers in the U.S. and the travelers who selected mobile larity in Russia and is likely a sub-U.K. use their computers to compare also selected websites via computer. stantial contributor to this trend.and choose travel products online (see Supplier websites show a strong peakFigure 6). The other markets are not In the destination selection phase, in India at 52%, driven primar-far behind, with Germany and Brazil U.S. discretionary travelers are an ily by the railway website irctc.co.in.trailing at 66%. The key difference exception in that they favor OTAs©2012 PhoCusWright Inc. All Rights Reserved. Page 14
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012 Figure 7 Websites Used for Travel Product Shopping 38% 44% General search engines 49% 67% 71% 53% 49% 42% Online travel agency websites 43% 67% 36% 50% 21% 42% Traveler review websites 36% 38% 52% 25% 33% 28% Travel provider websites 30% 52% 36% 34% 26% 19% Travel search engines 19% 34% 30% 11% 17% 13% Destination websites 25% 36% 35% 41% U.S. U.K. Germany India Russia Brazil Question: What sources of information did you use when comparing and choosing leisure travel products, such as airline tickets or hotel rooms for this trip? Base: Discretionary travelers who use the Internet when comparing and choosing leisure travel products (Weighted n – U.S. 669; U.K 640.; Germany 629; India 619; Russia 582; Brazil 603) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.Destination websites have a substan- affiliates of OTAs) to be destination lodging are very different, bookingtial audience in emerging markets websites, though they are not associ- channels were captured and ana-during the shopping phase. This is ated with the official tourism boards. lyzed on an individual product level.unusual given the inconsistency ofproduct information on destination B OOKING In most markets, airline websiteswebsites. There are several likely attract more bookers than OTA web-drivers of this trend. When trav- The last stop of the planning jour- sites, but the U.S. and India areeling internationally, these travelers ney typically happens after weeks exceptions (see Figure 7). While theare often visiting gateway cities that of searching and comparing. While OTA lead in the U.S. is small (38%typically have sophisticated websites travelers have decided what they want OTA vs. 36% airline website), thewith shopping capabilities. When to book at this point, there is still yet lead in India is substantial (51%traveling locally, hotel inventory may another decision to make – where OTA vs. 17% airline website). Thenot be available on OTAs and other to book. Many make this decision trend is completely the oppositeonline aggregators, whereas destina- without realizing it, simply following in Russia and Brazil, where air-tion sites are likely to at least have the shopping path to the end. Others line websites have a wide lead overa listing of hotels in the area. In make a conscious switch, most often OTAs. Offline channels are mostaddition, these consumers are like- from OTA to supplier website, par- popular in emerging markets, wherely considering websites that have ticularly when it comes to airline the shift to online channels is stilldestination-centric addresses (often tickets. Since the trends for air and in the early stages. Offline travel©2012 PhoCusWright Inc. All Rights Reserved. Page 15
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012 Figure 8 Travel Products Booking Methods: Air Travel 51% 46% 47% 38% 41% 36% 34% 29% 24% 23% 19% 16% 17% 15% 12% 15% 12% 12% 11% 10% 9% 9% 9% 4% 10% 7% 5% 2% 4% 4% 4% 5% 4% 2% 4% 3% 0% 0% 2% 0% 1% 2% U.S. U.K. Germany India Russia Brazil Called travel providers Called/visited a retail travel agent Used an online travel agency website Used a travel provider website Used a travel search engine website Used a retail travel agency website At the airport/property location Question: How did you book the travel products for this trip? Base: Discretionary travelers who booked airline tickets (Weighted n – U.S. 377; U.K 322.; Germany 301; India 456; Russia 310; Brazil 516) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.agents have roughly twice the level However, it is likely that consum- rates of defection among their shop-of influence in emerging markets ers in Germany and Russia are not pers, who often use their sites as(10-11%) compared to the U.S. able to distinguish clearly between shopping engines, but not book-and U.K. (4%), while Germany OTAs and travel search engines, since ing engines. To examine how wellretains a higher level of usage at 9%. neither market is likely using travel OTAs retain their shoppers, compare search engines (metasearch) to book the average booking channel resultsLodging, on the other hand, has a to the extent the responses indi- against those who shopped on OTAs.vastly different distribution frame- cate – 18% in Germany, 19% inwork. Hotel websites attract far fewer Russia. Again, offline travel agents Figure 9 displays air booking meth-bookers than their airline counter- are a substantial booking chan- ods for the whole discretionary trav-parts. Nevertheless, in the U.S., nel in the emerging markets, par- eler group as well as for OTA shop-where a large percentage of inventory ticularly Russia (20%) and Brazil pers. Though OTA shoppers showis chain-affiliated, the audience for (18%), whereas their usage among a higher propensity to book air onhotel websites is substantial. Though discretionary travelers is minimal in OTAs, they are not consistently lessthey are very active online, American the U.S. and U.K., both at 3%. likely to book air on supplier web-travelers (20%) are twice as likely to sites. The positive impact that OTAcall a hotel to book as their British OTAS – RETENTION visitation has in Brazil is negligiblecounterparts (10%). But at 24%, VER SUS DEFECTION for air travel – in fact, OTA shoppersGerman travelers are the most likely are more likely to book on an air-of all to book direct via phone. OTAs In the frictionless environment of line website (50%) than the averageare the most common booking chan- the Internet, there is little to keep discretionary traveler (47%). This isnel across all the markets except consumers from jumping from one not an indication that OTAs driveRussia, and barely in Germany. site to another. OTAs suffer high their shoppers to airline websites –©2012 PhoCusWright Inc. All Rights Reserved. Page 16
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012 Figure 9 Travel Products Booking Methods: Lodging 38% 39% 31% 31% 30% 24% 25% 20% 19% 20% 20% 19% 18% 18% 18% 17% 16% 14% 12% 13% 13% 12% 10% 11% 12% 10% 7% 9% 9% 10% 7% 7% 7% 7% 6% 5% 3% 2% 3% 3% 3% 3% U.S. U.K. Germany India Russia Brazil Called travel providers Called/visited a retail travel agent Used an online travel agency website Used a travel provider website Used a travel search engine website Used a retail travel agency website At the airport/property location Question: How did you book the travel products for this trip? Base: Discretionary travelers who booked hotel rooms (Weighted n – U.S. 645; U.K 522.; Germany 527; India 563; Russia 394; Brazil 556) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved. Figure 10 Booking Methods: Air 60% 51% 50% 50% 46% 47% 41% 43% 36% 38% 34% 34% 29% 31% 30% 30% 28% 24% 23% 19% 18% 20% 17% 12% Supplier Website OTA Supplier Website OTA Average OTA Shoppers U.S. U.K. Germany India Russia Brazil Question: How did you book the travel products for this trip? What sources of information did you use when comparing and choosing leisure travel products, such as airline tickets or hotel rooms for this trip? Base: Discretionary air travelers and OTA shoppers who booked air travel (Weighted n – U.S. 377; U.K 322.; Germany 301; India 456; Russia 310; Brazil 516) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.©2012 PhoCusWright Inc. All Rights Reserved. Page 17
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012 Figure 11 Booking Methods: Lodging 52% 45% 45% 38% 39% 37% 35% 31% 31% 30% 19% 16% 25% 27% 20% 18% 19% 18% 19% 16% 15% 13% 9% 7% Supplier Website OTA Supplier Website OTA Average OTA Shoppers U.S. U.K. Germany India Russia Brazil Question: How did you book the travel products for this trip? What sources of information did you use when comparing and choosing leisure travel products, such as airline tickets or hotel rooms for this trip? Base: Lodging consumers and OTA shoppers who booked lodging (Weighted n – U.S. 645; U.K 522.; Germany 527; India 563; Russia 394; Brazil 556) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.people who do not shop on OTAs age, but not substantially less likely to use are materially different marketare more likely to book offline rather book on supplier websites (see Figure to market. Industry players have thethan on supplier websites. In the 11). However, hotel website share ability to truly shape what peopleU.K., Russia and Brazil, even OTA is considerably lower than airline buy and where they buy it. There isshoppers are more likely to book air share in most markets. The sharpest no universal online/offline or suppli-tickets on an airline website than an dichotomy between products is seen er/intermediary equilibrium. EveryOTA. Low-cost carrier direct distri- in the U.K. and Brazil. While suppli- travel company must craft its ownbution policies are a likely contribu- ers reign in air travel in these markets, strategy in a game that is constantlytor to this trend in some markets. OTAs have the upper hand in hotel. redefined by the players. The stron- gest contenders get to write the rules.Hotel booking trends reveal a similar Though the mission of planning andresult – OTA shoppers are more likely booking travel is essentially the sameto book hotels on OTAs than the aver- everywhere, the channels travelers©2012 PhoCusWright Inc. All Rights Reserved. Page 18
  • PhoCusWrights Empowering Inspiration: The Future of Travel Search February 2012Patches of TurbulenceIn the extremely competitive online prising retailers to improve their complaint in most markets is thattravel arena, sometimes it is the little offerings and perhaps gain a bit travelers feel compelled to searchthings that can help a company break of advantage over the competition. around a lot to ensure they are get-away from the pack. In developed ting a good dealmarkets, travel retailers – especially SECTION HIGHLIGHTSOTAs – typically have comparable • Booking has fewer complaints thanstock on their virtual shelves; differ- • For destination selection, travelers other phases, but a substantial por-entiation cannot be built on inven- in most markets are frustrated by tion are anxious about price vola-tory alone. While today’s travel web- having to sift through too much tility and feel rushed into bookingsites have achieved widespread use, information, but in India and out of fear that the price will go upthere are still points of frustration Brazil, information accuracy is aduring each phase of travel plan- more common complaint DESTINATION SELECTIONning that can erode an otherwisegood experience. This section will • In the shopping process, sifting Years of tweaking have helped travelreview these lingering issues that through too much information is websites in developed markets createrepresent an opportunity for enter- also a common issue, but the top products that cater to their traveler Figure 12 Frustrations When Selecting Destination Online 42% 46% Percentage frustrated by at least one factor (aggregate) 49% 72% 78% 70% 21% 22% 29% I had to sift through too much information 33% 51% 30% 13% 15% 20% I was not sure that the information I found was up to date 36% 36% 35% 13% 16% There was no easy way to search multiple 14% 29% destinations at once 20% 21% 6% 7% 12% There was no way to search based on my preferences 17% (such as secluded locations) 22% 20% U.S. U.K. Germany India Russia Brazil Question: What, if anything, has frustrated you while selecting destinations online for your leisure trips in the past 12 months? Base: Discretionary travelers (Weighted n – U.S. 872; U.K 831.; Germany 913; India 797; Russia 768; Brazil 831) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.©2012 PhoCusWright Inc. All Rights Reserved. Page 19
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012needs rather well. Or, perhaps trav- better roll-ups and condensed snap- Each of the top three complaintselers have learned how to navigate shots of information such as seasonal are somewhat related. They are notthem over time. Whatever the driv- temperature/precipitation and price challenges created because the infor-ers may be, consumers in developed ranges. Freshness and accuracy of des- mation they seek is unavailable ormarkets are far less likely to be frus- tination information is also an issue, inaccurate (though sometimes thistrated when selecting a destination particularly for emerging markets. is also an issue, as demonstratedonline, compared to consumers in by the fourth most common com-the emerging markets (see Figure 12). SHOPPING plaint). Instead, the biggest frustra-Just over four in 10 (42%) U.S. trav- tions have to do with the aggregationelers experience frustration online Though travel websites tend to focus and organization of information.when deciding where to go, com- more energy on the shopping phase, Providing consumers with a hotelpared to over three quarters (78%) consumers show similar levels of frus- price benchmark that lists things likeof Russian travelers. The biggest tration overall in comparison to des- a three-month average price and theissue in most markets is perceived to tination selection (see Figure 13). average price of comparable hotelsbe information overload. But more Travelers in emerging markets once might help bring peace of mindspecifically it is the organization and more show a higher likelihood of and minimize the cross-checking andnavigability of content that typically being frustrated with some element sifting that people feel compelled tofrustrates people, along with a healthy of their online shopping experience. do. Tools on finance websites maydose of irrelevant information. Most markets share the top issue – therefore provide an unconventional travelers’ need to search around to source of inspiration for building aSummarizing information at a high feel confident about their choices. It better travel shopping experience.level, then allowing consumers to would seem that metasearch prod-drill for more detail can help cut the ucts feed right into this need, but BOOKINGclutter. For example, climate and the issue is more complex than com-pricing are common criteria for des- paring suppliers and a handful of Once consumers have played the fieldtination selection. It is easy to find OTAs. The trend is only exacerbated to their heart’s content and are readyinformation on either criteria, but by the barrage of flash sale prod- to commit, their needs shift sub-the data most often exists in a very ucts touting exclusive deals. Many stantially. Nevertheless, frustrationgranular format. On most travel web- consumers feel like they are making levels are only slightly lower than insites (though some might not have a hasty, potentially regrettable pur- previous phases. The most commonclimate information at all), consum- chase if they do not shop around. two issues are closely connected, asers would have to enter dates to get they both relate to price fluctuations.that information, and have to do it Holidays represent an investment of The pricing volatility introduced byfor each destination they want to both precious time off and a con- the practice of yield managementevaluate. At this early stage of travel siderable bundle of cash. As with has created substantial anxiety aboutplanning, consumers just want to any substantial investment, consum- when to book. It is a common (andsample the flavor, not read the list ers seek not only information on a uniquely travel-related circumstance)of ingredients. They want to know if product they are interested in, but for the price of an individual prod-the hotels in Paris are less expensive also the context of what else is out uct to change significantly within athan Rome, not how much the Le there. They also need to feel con- short period of time. It can feel likeMeridien is compared to the Sofitel fident that they could not get that a game of chance to the traveler, who– at least not yet. It is not easy to product for a lower price, which wonders if he should wait or book.browse destinations on most travel feeds into the third most common Consumers often book as early aswebsites today; especially for the inex- complaint – there was no way to they can (at least for airline tickets),perienced new travelers coming from compare the price to an average. in part because they fear the priceemerging markets, there is a need for will rise. Tools that support price©2012 PhoCusWright Inc. All Rights Reserved. Page 20
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012 Figure 13 Frustrations When Shopping for Travel Products Online 47% 48% Percentage frustrated by at least one factor (aggregate) 47% 71% 79% 68% 24% 26% I had to search around a lot to feel confident 20% 30% that I was getting a good deal 29% 38% 17% 17% 21% I had to sift through too much information 24% 43% 27% 16% 16% There was no way to see if the current price was 16% 27% high or low compared to its average 19% 27% 8% 9% 14% I was not sure that the information I found was up to date 27% 30% 26% U.S. U.K. Germany India Russia Brazil Question: What, if anything, has frustrated you comparing and choosing travel products (such as airline tickets or hotel rooms) online for your leisure trips in the past 12 months? Base: Discretionary travelers (Weighted n – U.S. 872; U.K 831.; Germany 913; India 797; Russia 768; Brazil 831) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.benchmarking for shoppers can also consumers have been conditioned important to all retail websites; buthelp address this booking anxiety. to expect that the lowest fares will in developed markets it is becom- be prepaid and non-refundable. In ing ever more critical, as growingCaching issues can contribute to the emerging markets, however, the rules visitor volumes becomes increas-third most common frustration dur- are not as clear to travelers – three ingly difficult. Investing in toolsing booking – pricing changes in in 10 Russian travelers find cancel- to alleviate consumer frustrationthe midst of the purchasing pro- lation/refund policies to be unclear. offers the potential to improve sat-cess. While this issue is never com- isfaction as well as conversion inpletely preventable, building better While many of the lingering frus- general. But solving problems forand more efficient caching/updating trations travelers have are rooted in discretionary travelers in particu-systems can help lessen its frequency. things that cannot be “fixed” (i.e., lar can be especially lucrative, givenConfusion about cancellation/refund pricing volatility), they represent their high-value travel expenditure.policies is marginal in developed excellent opportunities to improvemarkets, in part because so many the user experience. Conversion is©2012 PhoCusWright Inc. All Rights Reserved. Page 21
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012 Figure 14 Frustrations When Booking Travel Products Online 40% 44% Percentage frustrated by at least one factor (aggregate) 39% 70% 72% 61% 20% 20% There was no way to see if prices were likely 14% 30% to go up or down 28% 22% 16% I felt rushed into booking because I was afraid 7% 16% the price would go up 24% 24% 26% 12% 14% The price sometimes changed while I was trying to book 13% 29% 21% 14% 6% 7% 10% The cancellation/refund policies were not clear 25% 30% 19% U.S. U.K. Germany India Russia Brazil Question: What, if anything, has frustrated you while booking travel products (such as airline tickets or hotel rooms) online for your leisure trips in the past 12 months? Base: Discretionary travelers (Weighted n – U.S. 872; U.K 831.; Germany 913; India 797; Russia 768; Brazil 831) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.©2012 PhoCusWright Inc. All Rights Reserved. Page 22
  • PhoCusWrights Empowering Inspiration: The Future of Travel Search February 2012The Appetite for a New RecipeThe tools available on today’s travel SECTION HIGHLIGHTS FLEXIBILIT Ywebsites have clearly served mostconsumer needs sufficiently, as online • Roughly half of discretionary trav- To isolate areas for potential improve-channels are the predominant medi- elers in the developed markets, and ment in travel search, respondentsum through which consumers (who well over half in emerging markets, were asked a series of questionshave Internet access) choose to book. do not have a set destination in regarding their flexibility while plan-Sufficiency, however, leaves plenty of mind when planning trips ning their last discretionary trip. Inroom for improvement. The previous the developed markets, nearly halfsection highlighted areas where needs • Distance, traveling time and bud- of travelers had a particular place inare not being met, identifying sources get are the most flexible trip ele- mind (see Figure 15). In the emerg-of dissatisfaction. This section moves ments ing markets, the group with pre-beyond the realm of needs into determined destinations was small-consumer wants – identifying ele- • Travelers show the most interest in er, at roughly a third of travelers.ments that would boost satisfaction searching by budget, price includ- Correspondingly, the audience forduring the travel planning process. ing fees and interest/activities destination selection tools is slightly Figure 15 Destination Flexibility (Last Discretionary Trip) U.S. 2% 2% 50% 43% 3% U.K. 46% 41% 6% 4% 3% Germany 47% 43% 6% 4% 1% India 31% 59% 4% 1% 4% Russia 36% 56% 4%2% 1% Brazil 31% 58% 6% 5% 0% I had the specific place in mind and did not I had a few places in mind when I started research destination options researching destination options I had no idea where I wanted to go until I I hadnt been thinking about taking this trip, started researching options but saw a good deal Other Question: Which of the following statements best describes the circumstances of this trip? Base: Discretionary travelers (Weighted n – U.S. 872; U.K 831.; Germany 913; India 797; Russia 768; Brazil 831) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.©2012 PhoCusWright Inc. All Rights Reserved. Page 24
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012less than half of travelers in devel- audience and reducing reliance on travel dates have the lowest pricesoped markets, and roughly six out of referral traffic. Additionally, consum- have consistent, widespread appeal.10 in emerging markets. A smaller ers who go through the process ofpercentage of travelers in emerging shopping for a destination spend more In stark contrast to most other met-markets have a pre-determined des- on average than those who do not – rics, the various aspects of flexibil-tination, which means that destina- though travelers in Germany and ity do not show material differencestion selection tools are more impor- India are exceptions (see Figure 16). between the developed and emergingtant. Therefore, requiring travelers to markets. Instead, geographical andspecify a destination when searching In the early stages of thinking about infrastructural characteristics exertfor travel is not ideal for a very sub- their trips, the majority of discre- a stronger influence. For example,stantial portion (in some cases the tionary travelers are flexible about U.S. and U.K. travelers are some-majority) of discretionary travelers. how far they will travel, how much what limited in alternative modes of time they will spend in transit and transportation, whereas alternativesThough travel retailers are often how much they will spend. Russian like rail and bus transportation areprimarily focused on the shopping travelers are an exception in that more common in other markets.and booking phases, catering to des- they are less flexible about traveltination selectors is advantageous. distance and transportation time. NEW WAYS OF SEARCHINGAttracting consumers earlier in the More than four in 10 travelers acrosstravel planning process allows web- the markets are flexible about their Veering away from the standard citysites to go higher up the purchase travel dates. Therefore, tools that pair – departure/return date travelfunnel, potentially broadening their help travelers determine which search box is an exciting proposi- Figure 16 Annual Household Travel Expenditure (US$) by Destination Flexibility (Last Discretionary Trip) $5,818 $5,536 $5,160 $4,735 $4,206 $4,038 $4,016 $4,256 $3,153 $2,559 $2,509 $2,530 U.S. U.K. Germany India Russia Brazil Did not research destination Researched Destinations Question: What was the discretionary amount your household spent on travel components (including airline tickets, paid lodging, car rental, cruise tickets, railway tickets for travel over 120 km) for your N leisure trips in the past 12 months. Which of the following statements best describes the circumstances of this trip? Base: Discretionary travelers (Weighted n – U.S. 872; U.K 831.; Germany 913; India 797; Russia 768; Brazil 831) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.©2012 PhoCusWright Inc. All Rights Reserved. Page 25
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012tion, but conducting a search stillis a close second (see Figure 18). an exact amount, interest in seeingrequires some parameters. While This finding may seem contradictory what is available at or below a cer-some search criteria can build off the to the results showing widespread tain price point holds broad appeal.existing framework, others require flexibility of budget. However, costa fundamentally different approach.is consistently top of mind during While many travel websites have travel planning and an instinctive filters and sorting options based onBudget is the search criteria with standard to use when comparing price, they are within the frameworkthe broadest appeal in most mar- alternatives. While consumers may of a given destination or city pair andkets, and price including all fees not be firm in their desire to spend time frame. Enabling search based on Figure 17 Flexibility in Travel Aspects: Somewhat Flexible + Very Flexible 60% 62% Distance 60% 75% 32% 58% 62% 66% Traveling time 57% 66% 40% 59% 55% 51% Budget 56% 57% 52% 61% 43% 43% Travel dates 41% 45% 46% 44% 35% Mode of transportation 35% 41% 45% 46% 44% 49% 40% Activities 42% 47% 40% 47% 33% 37% Climate 43% 47% 36% 44% U.S. U.K. Germany India Russia Brazil Questions: In the earliest stage of thinking about this trip, how flexible were you in the following aspects of travel? Base: Discretionary travelers (Weighted n – U.S. 872; U.K 831.; Germany 913; India 797; Russia 768; Brazil 831) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.©2012 PhoCusWright Inc. All Rights Reserved. Page 26
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012 Figure 18 Usefulness of Search Capabilities (“Very Useful”) 66% 52% 56% 52% 55% 52% 51% 49% 44% 47% 51% 46% 47% 44% 43% 48% 45% 43% 42% 43% 41% 44% 43% 41% 39% 39% 36% 34% 33% 27% Budget Price including fees Interests/Activities Traveler rating/ Included amenities reviews U.S. U.K. Germany India Russia Brazil 47% 48% 46% 49% 44% 37% 44% 42% 42% 41% 38% 35% 37% 34% 33% 33% 32% 31% 32% 27% 27% 26% 25% 27% 22% 21% 20% 12% 16% 11% Average weather Transportation time Local events Physical distance Environmental/ conditions carbon impact U.S. U.K. Germany India Russia Brazil Question: How useful would you find the following search capabilities when planning leisure travel online? Base: Discretionary travelers (Weighted n – U.S. 872; U.K 831.; Germany 913; India 797; Russia 768; Brazil 831) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.budget across multiple destinations By releasing travelers from destina- where that cost 1,000 dollars or less.would be helpful for many shoppers, tion constraints, travel websites can Websites often use frameworks likebut can easily yield an overwhelming deliver entirely new consideration these in their merchandising, butvolume of results. Multi-destination sets through alternative combina- incorporate just a handful of offers.search parameters must therefore be tions of search criteria. For example, Consumers have demonstrated thatpaired with others (traditional or melding budget and interest-based there is a significant demand baseotherwise) to keep results relevant. parameters would enable consumers for this type of multi-destination to search for beach vacations any- search (see Figure 14). Incidentally,©2012 PhoCusWright Inc. All Rights Reserved. Page 27
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012this type of alternative-parameter preempt OTA visitation and move the version of this is evident in the formsearch is exactly what Google hints shopping and price comparison pro- of links at the bottom of the page.that it ultimately aims to deliver.2 cess away from them. Being relegated The current iteration is hardly com- to a booking versus a decision engine pelling, although Google continuesBeyond the context of SEO/SEM, could commoditize OTA shopping to emphasize, it is just the first look.a much larger underlying issue with products and weaken their positionGoogle’s travel focus looms. With the in the distribution chain. But this is Ultimately, as much as they mightlaunch of Flight Search in the U.S., it not necessarily a situation for airlines not like it, OTAs must fish whereis clear that Google intends to act as to celebrate either. While suppliers the fish are. And Google is extremelya robust flight shopping engine, one might dislike the margins/commis- good at luring fish. It is criticallythat does not include booking links sions they concede to OTAs, the cost important – especially in emerg-to OTAs. Google claims this exclu- of search marketing could easily rise, ing markets where consumers usesion was forced on them by airlines displacing distribution-related sav- search extensively – that websitesthat insist on controlling how their ings and shifting even more power keep up with product search func-fares are displayed. Regardless of the to an already powerful media player. tionality to minimize the risk ofroot cause, OTAs are being placed in being disrupted by whatever Googlea difficult position. Google has maintained that it is chooses to create for their markets. building opportunities for OTAs andAs the search giant sits higher up in metasearch partners to have a pres-the funnel, it could (at least in theory) ence in the product, and the first2 Jeff Huber. “ITA Software acquisition clearedfor take-off”http://googleblog.blogspot.com/2011/04/ita-software-acquisition-cleared-for.html©2012 PhoCusWright Inc. All Rights Reserved. Page 28
  • PhoCusWrights Empowering Inspiration: The Future of Travel Search February 2012The Progress of New MediaThe relentless march of innova- executed through other channels. results. This trend may be connectedtion splinters the travel market- to Russian travelers’ strong propen-place into an ever-increasing num- Across the range of travel-related sity to travel internationally, whichber of devices. Mobile platforms mobile activities, travelers show the is similar to U.K. and Germany.and social networks are power- most interest in elements that make While features and functions thatful new media that are inspiring relevant bits of scattered information directly relate to travel needs aremuch of travel innovation today. convenient and easy to retrieve (see popular in Russia, high interna-This section details how consumers Figure 19). Mobile check-in is also tional data costs may deter shar-are interested in using these new appealing to many travelers, as is ing on social networks (which oftenmedia to support their travel needs. using the mobile device as a board- has less urgency) while traveling. ing pass. The boarding pass featureSECTION HIGHLIGHTS shows a relatively consistent response Looking ahead, interest in mobile across markets, whereas other fea- activities in the developed markets• Receiving alerts, looking up itiner- tures often show a wider variation. will rise. In the emerging markets, ary information and checking in German travelers are consistently however, it may actually stagnate hold the most appeal in terms of less interested in most mobile-related or even recede as travel becomes travel-related mobile activities activities in comparison to the other more accessible to the broader markets, though the U.K. is not far public. The discretionary traveler• Sharing pictures/stories from trips behind. Three in 10 travelers in the group represents the elite of these and getting recommendations top European markets currently have markets today – it will become the list of social network activities no interest in using their mobile less exclusive as middle class life- phones for travel-related activities. styles become more widespread.• Discretionary travelers in the emerging markets generally show As seen in other measurements of SOCIAL NET WORKS more interest in both mobile and appetite for advanced functionality, social activities than their counter- discretionary travelers in emerging Though interest in sharing travel parts in the developed markets markets show a stronger interest experiences and pictures on social in general. U.S. travelers, however, networks is mediocre on mobile,MOBILE break away from European travelers sharing pictures and videos tops for mobile activities. U.S. consumers the list of travel-related activities onOne would be hard pressed to find show levels of interest comparable to social networks in general (see Figurean executive who does not believe emerging markets for many infor- 20). Russian travelers demonstrate awholeheartedly that mobile plat- mational and operational mobile particular affinity for fellow travelerforms will play an increasingly features (alerts, check-in, etc.). perspective within the frameworkimportant role in digital commerce. Nevertheless, when it comes to travel of social networks. This trend isThe ambiguous factor is the pace at planning – shopping or booking – consistent with their heightened usewhich mobile commerce will grow enthusiasm wanes and U.S. travelers of traveler review websites duringits share of transactions, and at what fall back to levels just slightly ahead destination selection and shopping.point it will begin to plateau. But of the European markets. Updating Despite this enthusiasm for readingbeyond the realm of transactions, social networks is a unique example others’ opinions, Russians are not asthe mobile Web will become critical where Russian responses fall rather interested in voicing theirs. When itin supporting decisions that may be low, similar to U.K. and German comes to sharing stories and updates©2012 PhoCusWright Inc. All Rights Reserved. Page 30
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012 Figure 19 Interest in Online Activities via Mobile Phone Receive travel/flight status alerts Look up itinerary information Check in Get information about local activities Use as boarding pass/ticket (such as for a flight or train) Update a social network to share my travel experiences/pictures Reserve/purchase travel products Get information about travel products Adjust existing travel reservations Reserve/purchase local activities I have no interest in using my phone for online travel-related activities 0% 10% 20% 30% 40% 50% 60% 70% 80% U.S. U.K. Germany India Russia Brazil Question: Please select the travel-related activities you do or are interested in doing online using a mobile phone? Base: Internet users via mobile phone (Weighted n – U.S. 477; U.K 469.; Germany 531; India 579; Russia 655; Brazil 584) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.about travel experiences, Russia falls interest in travel-related activities on This trend suggests that the realm ofbehind the other emerging markets. social networks remains far below social networks might not be quite the emerging markets. U.K. travelers as distinct in emerging markets asU.S. travelers again display a con- are least likely to have interest in any it is in developed ones. Interactionssistently higher interest level in travel-related social network activities typically conducted on a companycomparison to Europeans, but their (43%), followed by Germany (35%). website in the developed markets©2012 PhoCusWright Inc. All Rights Reserved. Page 31
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012might be conducted more often in may be a natural source of informa- ed content on their social networksthe social network space in emerg- tion for both user and company- because they habitually use othering markets. For travelers who have generated content (such as pricing websites like OTAs, supplier sites, etc.not grown accustomed to planning and room descriptions). In devel-and booking travel online a certain oped markets, travelers may not be Today the walls of social networksway over the years, social networks as likely to seek company-generat- are distinct, often because of privacy Figure 20 Interest in Activities Through Social Networks Share pictures/videos from my travel experiences Get recommendations from friends about local activities in a destination I am going to Search for travel reviews written by people like me Get advice from friends about where to go on vacations Browse/search for deals and special offers from travel companies Search for travel deals that companies are offering Share stories/updates about my travel experiences Plan trips collaboratively with my friends/family Get advice from friends about which travel products to purchase Keep up with my friends travel itineraries and/or share mine Keep up with latest announcements from travel companies I have no interest in using online social networks for travel-related activities 0% 10% 20% 30% 40% 50% 60% U.S. U.K. Germany India Russia Brazil Question: Please select the travel-related activities you do or interested in doing through an online social network? Base: Social networks users (Weighted n – U.S. 665; U.K 831.; Germany 581; India 585; Russia 741; Brazil 756) Source: PhoCusWright Inc. © PhoCusWright Inc. All Rights Reserved.©2012 PhoCusWright Inc. All Rights Reserved. Page 32
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012concerns. The advent of Facebook Ultimately, there are three core com- yet another layer – connection to aConnect has started to break these ponents to hotel decision-making personal reference. The context is ofwalls down, as friends’ likes begin to – price, quality and location. The course subject to the complex naturepop up all over the Internet. When ability to access information about of people’s personalities and relation-searching for a hotel in Paris, a trav- each of these three variables has been ships. Being liked may not alwayseler might see that her friend stayed enhanced tremendously by technol- be helpful for the “liked” companyat a property and liked it enough to ogy, but the quality component is the – if Max is a party animal and he“like” it. Immediately, without hav- where the social factor really comes “likes” a hotel, then perhaps it ising to communicate directly with into play. Once upon a time, con- best to avoid it on a family trip. Butthat friend, the traveler has received a sumers relied on professional ratings even in this context, the informa-recommendation. Google would very (stars, diamonds, etc.). With user tion provides useful knowledge thatmuch like to replace the Facebook generated content, another layer was helps the consumer make a decision.framework with its own, of course, but added – providing a satisfaction scoreeven the search giant may be unable and validation against the quality rat-  to dethrone the mighty incumbent. ing. The social component will add©2012 PhoCusWright Inc. All Rights Reserved. Page 33
  • PhoCusWrights Empowering Inspiration: The Future of Travel Search February 20122020 Foresight: The Future of Travel PlanningThe online travel industry’s first mis- tion. Unlike the desktop Web, loca- ony of flash deals sites sprouting insion was to bring the world’s travel tion-based services, NFC and mobile markets around the globe thrive byproducts and services to the digital payment systems will change service rejecting the mantra that more prod-dimension. This foundation-build- delivery profoundly, perhaps even ucts are better. But their relevance ising is far from over, particularly more than they will impact distri- singularly built on the back of deepin geographies where independent bution. As companies grapple with discounts, and the collective noise(and largely unplugged) hotels dot how to navigate the ever-shifting has become so loud that people arethe landscape. Local OTAs are in landscape of devices and platforms, beginning to tune them out. To sup-the midst of a race alongside global they must strive to adapt to the port long-term engagement, deal-giants to stock their virtual shelves consumer on the go, and strike the centric brands must master a newaround the world. But while the right balance between simplicity and (yet very familiar) mantra – serve thefocus in emerging countries is still rich functionality. The key to success right product to the right customerlargely this first wave of progress, in this early stage of mobile devel- at the right price at the right time.the game in developed countries opment is to tailor the experienceis changing. In markets where the with a custom fit for mobile needs. Flash sale brands distort the elementsshelves are teeming with options, of the old revenue management say-discretionary travelers are faced with Over time, however, the distinctive- ing – they serve random productsoverwhelming choice. The next mis- ness of mobile platforms will not at too low a price to everybody forsion for travel technology must there- be so important. The limitations a short time. As a result, purchas-fore be to contextualize and curate of clumsy fingers on small screens ers may wonder how they endedthe vast stores of information to may be around for good, but voice up with product they never reallyreturn relevance versus abundance. and image/visual recognition will wanted in the first place, and sellers make input easier. Stored informa- wonder what they really got out ofTo explore the collective imagination tion will become more sophisticated, it all. With both buyers and sell-around the possibilities for travel enabling travelers to move beyond ers often walking away unclear onplanning, PhoCusWright conducted the confines of individual activi- the benefit, the proposition is ulti-interviews with OTA executives and ties on individual devices. Shoppers mately flawed. In their current state,other thought leaders around the will be able to spread one task over signing up for a flash sale brandworld, including each of the markets multiple sessions and platforms, (public or membership-based) resultscovered in this study – the U.S., picking up wherever they left off. in one’s inbox getting hammeredU.K., Germany, India, Russia and Ultimately, the “Splinternet” cre- day after day with a general (rath-Brazil. This section presents con- ated by platform proliferation (PC, er than personalized) list of offers.cepts that emerged when envisioning phone, tablet, gaming system, TV,travel search in the year 2020, as well etc.) will once again converge. But there is a different kind of flashas some of the hurdles that will be sale that technology will eventuallyovercome in the intervening years. THE TRULY PRIVATE make possible. With consumer seg- “PRIVATE SALE” mentation and behavioral targetingHARDWARE AGNOSTICISM becoming ever more sophisticated, For many years, retailers have been demand management will be ableMobile platforms have inspired start- pushing discounted promotions with to go a step further, allowing sellersups and veterans alike with a shiny some level of targeting, but no true to microtarget offers to specific con-new medium for consumer interac- personalization. Today, the cacoph- sumers. Companies would be able to©2012 PhoCusWright Inc. All Rights Reserved. Page 34
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012identify target segment parameters on confounding factor is the reaction results based on selections made dur-a much more granular level. A mix of consumers have to deals – which can ing the session. For example, afterprofile and behavior-based targeting induce them to select options that selecting hotel type x to view inwould allow sellers to “shop” for cus- might normally be outside of their more detail, upon returning to thetomers and go beyond 1:1 market- consideration set. A consumer might full list of search results, the ordering. It would be more like 1:1 sales have wanted to stay on the beach, but would automatically readjust to pull– a truly private sale that drives rel- Hotel Z has a fantastic pool and is on more of hotel type x toward the top.evance for both the buyer and seller. sale right now, so even though it is The social layer enabled by social not on the beach, she chooses Hotel networks will add valuable contextCUMULATIVE Z. Consistent consumer inconsis- for defining and understanding the“INTELLIGENCE” tency makes individual profile-based commonalities. personalization inadequate. For theAs scores of struggling start-ups can vast majority of travelers, vacations SMART SYSTEMS ANDattest, straying from the standard are simply too novel to have a ritual THE VIRTUAL PER SONALshopping widget is not as easy as it formula. ASSISTANTmight seem. Consumers can onlyevaluate so much information at Yet, search algorithms are just that: No pop culture vision of the futureonce. With hundreds of options for formulas. How can anyone crack the feels complete without the requi-even a destination/date-constrained code when people don’t have one? As site robot assistant. From Star Wars’search, shoppers are often overload- a result, much of today’s personaliza- C-3PO to the Jetsons’ robot maid,ed. Eventually though, regardless of tion is accomplished through recom- Rosie, we can easily identify withthe form of input, programs will be mendations that are determined by the desire for technology to serveable to “learn” from an individual’s clustering the products considered us and make everyday life easier.behavior over time. When someone or purchased by many shoppers, a More likely than an actual robot (atexecutes a search for the fifth time, la Amazon. This system is appealing least for 2020) is the notion thatthe results should be more relevant because consumers, not companies, devices themselves will be “smart”than the first time. Perhaps it will are defining the alternatives. The and interconnected. Computer chipsnever be truly 1:1, but microse- trade-offs and inconsistencies do not might be in everything from coffeegmentation at the very least will have to be dissected, as the observed machines to light fixtures. Your heatenable companies to deliver increas- shopping behaviors inherently incor- will turn on just in time for the roomingly intelligent results by analyzing porate them all. Instead of trying to temperature to be comfortable rightbehavior. understand complex decisions, the when you get home. In these house- goal is to observe and aggregate com- hold examples – coffee machines,It is easy to describe this capability in mon behaviors. Some OTAs have lights and thermostats – timers canconceptual terms, but it is a phenom- begun using this technique to for- already regulate these things. The dif-enally difficult endeavor – mainly mulate recommendations for alter- ference will be that in the future, thebecause people tend to be extremely native hotels. It is a compelling first manual nature of programming theminconsistent. An endless array of situ- step, but it lives relatively deep in will likely be replaced by intercom-ational aspects, such as trip compan- the funnel, since it is attached to an munication between devices. But,ions, the reasons for taking the trip individual property. since most people will not requireand volatility in personal finance, the computing power to play Angrycan materially impact what an indi- The key to better search results is Birds on their coffee machine, avidual is looking for. On top of this bringing the framework up the fun- central application will likely act as anatural variation, travel is often con- nel. A more advanced version of hub that distributes instructions (i.e.,nected to the desire to do/see some- utilizing common consideration sets on/off ).thing entirely new. Perhaps the most might dynamically adjust search©2012 PhoCusWright Inc. All Rights Reserved. Page 35
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012The domestic scenario is easy enough palatable. But ultimately, the “creepy The notion of privacy and the mentalto imagine, but the interactivity of line ” is drawn on shifting sands. line that defines what is acceptable issystems (without human interaction) And it has a persistent tendency to constantly weighed against the ben-will also translate into the virtual creep ever closer into our privacy. efits of sharing information. Whileworld. Today, our Internet experi- inserting computer chips into peo-ence is compartmentalized much like BIOMETRICS AND THE ple’s bodies may sound frightful, theindividual appliances are today. We “CREEPY LINE” CREEP benefit of knowing that a child with awill still use different websites for severe medicine allergy will not acci-different things in the future, but Today, biometrics are commonly dentally be given that medicine ina program that collects and stores based on physiological traits and the emergency room opens the mindthis information may act as a virtual designed for security purposes, like to helpful possibilities. With anypersonal assistant – recognizing and fingerprint scanners. There is another powerful advancement of technol-processing inputs from the sites we realm of biometrics, however, that ogy, there is potential for great goodvisit and what we do on them. Just focuses on behavior. Both involun- and great harm. Mobile technologyas a human personal assistant would tary and voluntary indicators such enables flash mobs regardless of theirknow that your son is graduating as pulse, eye movement and facial intent – to loot a riot-stricken neigh-from university in May, a virtual expression, can “tell” a computer how borhood or dance in a mall. In theassistant could also “know” it and someone is reacting, without requir- wrong hands, the information a vir-cross that information with travel ing the individual to input something tual personal assistant collects couldprices to alert you that now is a good directly. Today it is typically the stuff be used with terrible impact. Usedtime to book that graduation trip. As of lie detector tests and psychologi- as intended, a personal assistant canthe system would turn on the coffee cal experiments. Though perhaps a facilitate tasks, generate helpful ideas,machine, it would track prices on bit far-fetched for 2020, biometrics and save time and money. As we con-your behalf. How this virtual assis- (in addition to enhancing security) sider the possibilities, we should alsotant “knows” you need to take the may someday provide valuable input consider that elements that seem totrip, of course, is the sticky question. that helps computers gauge people’s cross the creepy line today, might beTo be effortless, this program would preferences and helps programs readily accepted in a decade’s time.need to be able to access and process “learn” to provide more relevanteverything – like a very “smart” cook- results with no additional user effort. ***ie. But it’s one thing for your com-puter to “hear” from your car that Biometrics might also enable pro- Recalling life a decade or so agoyou’re on the way home, and another grams to be more proactive. A com- brings remarkable perspective to thefor it to scan email or track spend- puter might be able to sense user spectacular pace of innovation. Iting to “watch” everything you do. stress or “understand” the physical was the early days of the online travel signs of someone who is overworked. industry. OTAs were busy revolution-The virtual assistant simply never may This biometric input could someday izing the way travelers planned theircome to be because for most consum- be read as mundanely as location is trips, despite what would now seemers, an omniscient program would today, and companies could utilize like agonizingly slow connectionmake them feel that their privacy has the information to customize their speeds. Apple unveiled the first iPodbeen violated. Transparent, detailed offerings. The prohibitive issue is, and Mark Zuckerberg was filling outuser controllability over what infor- as with the virtual personal assis- an application for Harvard. Yahoo!mation it collects may make it more tant, privacy and the “creepy line.” was the top search engine and Google©2012 PhoCusWright Inc. All Rights Reserved. Page 36
  • PhocusWrights Empowering Inspiration: The Future of Travel Search February 2012was somewhere around the tenth. as new travelers leave their borders within the walls of Facebook. AllWhat a difference a decade can make. for the first time. Already prone to the while, Google and rival search last-minute/in-destination booking, engines around the world are edgingHistory lets us see how far we have Chinese travelers may rely on mobile deeper into the decision-making fun-come. Envisioning the future helps offerings in unprecedented ways. nel. While we certainly can’t predictus imagine what is possible and dis- The lack of lodging infrastructure what travel will be like in 2020, wecover what problems there are left and the strength of social networks can predict with certainty that theto solve today. Cultural differences in India could catalyze a powerful next decade of online travel will bewill be more important than ever C2C lodging network like Airbnb as wondrously dynamic as the last.©2012 PhoCusWright Inc. All Rights Reserved. Page 37
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