Travel Search – Evolving to Win
SES Travel
July 26, 2007
Nancy Ramamurthi, CMO
nramamurthi@sidestep.com

Evolution

Evolution of Travel Booking
1950 to 1995
• Telephone, Offline Travel Agents
2000 to present
• OTA’s, direct suppliers, travel search
1995 to 2000
• Direct suppliers, emergence of online travel agencies
(Expedia and Travelocity, followed by Orbitz)

Internet has disrupted the travel
category more than any other
over 3/4 of all travelers are online
& over half of them book online

The Travel Search Players

It’s a crowded and competitive field…

The next 30 minutes
• Travel industry and the growth of Travel Search
• Online travelers and why they care about Travel
Search
• Benefits of Travel Search for Suppliers, Agencies,
and Advertisers
• Key takeaways and some predictions

Travel Industry
&
the Impact of Travel Search

Online travel industry is large and growing
Total US Travel Gross Bookings ($ Bn) Size and Growth 2004 - 2008
100%
90% Total Offline
Total US Travel Gross Booking ($Bn)
80% 41%
46%
53%
70% 59%
65%
60% % Online Corporate
50% 18%
17%
40% 15%
13%
30% 11% % Online Leisure
20% 37% 41%
28% 32%
10% 24%
0%
Online Travel Crosses
2004 2005 2006 2007 2008 the Chasm in 2007
>50%
US Travel ($Bn) $210 $225 $247 $260 $275
% Growth
US Travel 7% 10% 5% 6% ’04 – ’08 CAGR: 5.5%
Online Leisure 28% 25% 21% 16% ’04 – ’08 CAGR: 17.7%
Source: PhoCusWright, US Online Travel Overview Sixth Edition Dec 2006

Travel Search outpaces the rest
Online Travel Segments
Unique Visitor Growth Comparison
Jun-06 Jun-07 YOY
Online Supplier (e.g. AA.com) 75,408 72,852 -3%
Online Travel (e.g. Expedia) 68,074 60,388 -11%
Web Portal (e.g. Yahoo!Travel) 19,853 18,835 -5%
Travel Search (e.g. SideStep) 12,961 15,787 22%
Opaque/Discount Travel (e.g. Hotwire) 12,470 12,090 -3%
Travel Reviews (e.g. Trip Advisor) 8,045 7,119 -12%
Sales/ Specials (e.g. Travelzoo) 3,451 3,896 13%
Total Travel 78,940 80,975 3%
Source: comScore MediaMetrix, June’06 and June’07 (Top 40 sites)

Travel Search brands gaining awareness
Awareness of Travel Search Brands
Kayak 22%
SideStep 21%
AOL PinPoint
18%
Travel
Yahoo! Farechase 18%
Mobissimo 13%
0% 5% 10% 15% 20% 25%
Figure: Percent indicating aided awareness of selected travel search suppliers. Findings based
on survey of US online adults who traveled or looked for travel services in the past 12 months, n=469.
Source: Prophis eResearch September 2006

Travel Search is helping to drive “direct”
% Share of Direct vs OTA
Online Leisure/Unmanaged Business ($Gross Bookings)
% Travel Search
as contribution of Direct
70.0%
58.4% 59.1% 59.3%
60.0% 56.2% 20%
53.3%
49.8%
50.0%
15%
% Share
40.0%
% Share
30.0% 10%
20.0%
% OTA 5% % Travel Search
10.0% % Direct
0.0% 0%
2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007
Year
Source: PhoCusWright, US Online Travel Overview Sixth Edition Dec 2006, Merrill Lynch

Online travelers &
Why they care about travel search

“Bookers” represent over half of all
online travelers
Total Travelers % Online Travelers % Bookers
55%
79%
100%
84 million HH 66 million HH 36 million HH
(online once a month, (online traveler who
and traveled for leisure purchased leisure travel
in past year) online in past year)
Source: Forrester, The Mainstreaming of the Web Traveler, Sept 2006; Base: US households; US Households: 113 million (2005 census, wikipedia)

Bookers travel more
Index
66%
Took a leisure trip
98% 148
32%
Trips with Air Travel
73%
231
47%
Trips Hotel Stay
84% 176
19%
Trips with Car Rental
45% 240
U.S. Base
Booker
Source: Forrester Benchmark Survey Jan 2007
Base: US Respondent

Bookers appreciate and pay for value
I enjoy planning and buying 76.3%
travel on the Internet. 52.2%
Travel is an area in which I 54.8%
indulge myself.
44.4%
I will pay more for travel 51.5%
products that save me time and
hassles. 42.6%
I am willing pay above-average 50.7%
prices for a noticeably better-
quality travel product or service. 40.4%
US Booker
Source: Forrester, NACTAS Q1 2007 Travel Online Survey, Top 2 responses
Base: *US Respondents
US respondents that indicated they have taken at least one trip in the last 12 months

Bookers embrace technology
50.7%
*I like technology.
43.5%
43.3%
*Technology is important to me.
35.3%
It’s easy to use the Internet to 87.1%
plan and buy travel. 70.2%
I like that I can book online 82.7%
whenever I want from almost
anywhere I want. 65.2%
US Booker
Source: Forrester, NACTAS Q1 2007 Travel Online Survey, Top 2 responses
Base: *US Respondents
US respondents that indicated they have taken at least one trip in the last 12 months

Bookers use social applications
Use RSS feeds 10% Booker
8%
US
Upload video/audio you 10%
created (e.g., YouTube) 9%
Tag Web pages or other 11%
content (e.g., Flickr) 8%
Talk to someone using voice 11%
IM (e.g., Skype) 9%
Listen to podcasts 18%
12%
Use social networking sites 22%
(e.g., MySpace) 18%
Post to photo-sharing sites 24%
(e.g.Snapfish) 15%
Post ratings/reviews (e.g., 26%
Amazon) 17%
Read blogs 30%
22%
Source: Forrester Benchmark Survey Jan 2007; Base: US Respondent

Social applications influence travel
purchases
• More than 20% of consumers already
use “user generated content” (UGC) in
travel planning
• Two-thirds state it impacts their
purchase decisions
• 56% view UGC as credible
Source: Compete, April 2007, consumer generated content in Travel

Why bookers want travel search
• Price transparency
• Comprehensive, Help consumers
impartial results Solve a real problem
• Easy to use

Bookers want to easily find the right
price
Helps me find the lowest price 77%
Easy to use 57%
Trustworthy 46%
Provides the widest selection of
44%
options (air and/or hotel)
Saves time 32%
One-stop travel source (air, hotel,
22%
car, cruise, packages, etc.)
Source: SideStep Quantitative 2007l. Q: Thinking about when you are researching and checking prices for a leisure trip what are the
characteristics most important to you when deciding which resources to use? Select Top 3

Bookers value what Travel Search offers
Ability to comparison shop for flights
53%
within and across airlines
No additional booking fees 50%
Ability to purchase directly from the
46%
airline
Tools to help determine the best flight
38%
option
Ability to learn or redeem frequent flyer
37%
miles
Tools to help determine if the current
30%
price is a good deal
Live customer support/service 14%
Source: SideStep Quantitative, 2007. Q: In the past 12 months, when using the Internet to plan an airline flight for leisure/ personal travel,
what characteristics are most important to you when deciding which resources to use?

Strong “top box” ratings for Travel Search
• 43% - “very interested” in the concept
• 23% - this service is “much better” than what I
use now
Source: SideStep Quantitative, 2007.

SideStep perceptions
Source: SideStep qualitative 2007

Travel Search users travel more
Leisure Trips Air Trips Hotel Stays
4+ trips
16% 4+ Stays
4+ trips 23%
Online travel agency
42%
(e.g. Expedia, 1-3 trips 1- 3 1- 3
Travelocity, Orbitz) 58% trips Stays
77%
84%
4+ trips
22% 4+ Stays
4+ trips 1-3 27%
Travel search 46% 1- 3
trips
(e.g. Sidestep, Kayak) 54%
trips 1- 3 Stays
78% 73%
Source: Forrester, North American Technographics Benchmark Survey, 2007

Travel Search users embrace social
applications
Travel Search
Use RSS feeds 17%
11% OTA
Upload video/audio you created (e.g., YouTube) 17%
10%
Tag Web pages or other content (e.g., Flickr) 18%
11%
Talk to someone using voice IM (e.g., Skype) 20%
13%
Listen to podcasts 25%
18%
Use social networking sites (e.g., MySpace) 30%
24%
Post to photo-sharing sites (e.g.Snapfish) 32%
24%
Post ratings/reviews (e.g., Amazon) 36%
27%
Read blogs 37%
31%
Source: Forrester, North American Technographics Benchmark Survey, 2007

Benefits of travel search for suppliers,
agencies, and advertisers

Travel Search most closely aligned
with supplier goals
Send you the
customer &
No Denigrate Own the show your
brand brand customer brand
Supplier.com
Supplier.com
Cheap..
Discount…

In a nutshell…
• Reach and engage with a quality audience
– Outstanding conversion rates
• Lower distribution costs
• Ownership of the customer
• Strengthen brand awareness and
engagement online

Online Travel – how we must
continue to evolve to win

Consumer Travel Funnel
Research
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Planning
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Shopping
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Purchase
& Travel

Trips Application on Facebook

Key Takeaways and some
Travel Search Predictions

Remember….
• Travel Search is here to stay.
• A growing population of consumers will embrace
what Travel Search offers.
– 100 M unique visitors in 3 – 5 years
• Travel Search represents your best opportunity
to reach a qualified, engaged travel audience.
– Supplier, agency, and advertisers relationships will continue to
get stronger
• Social applications and networks must become a
part of your future strategy
– Those who don’t figure this out will become extinct

It’s All About the Consumer.