Travel	  Distribu.on	  &	  Marke.ng	  Barometer                     Edi.on	  1                     May	  2011	  
About	  the	  Travel	  Distribu.on	  &	  Marke.ng	  Barometer	  EyeforTravel	  conducted	  a	  global	  survey	  amongst	 ...
The	  first	  chart	  below	  explains	  the	  involvement	  of	  our	  respondents	  globally	  in	  terms	  of	  geograph...
Contents	  SecOon	  1:	  	   Distribu(on	  Channels	  SecOon	  2:	  	   Online	  Penetra(on	  (for	  suppliers)SecOon	  3:...
SecOon	  1:	  	  Distribu.on	  Channels	  
Distribu.on	  ChannelsBooking	  Channels	  	  Figure	  x	  analyses	  channels	  for	  bookings	  (volumes)	  over	  the	 ...
Booking	  Channels	  By	  Region	                  Increased                         About	  the	  same	  volume          ...
Increased                        About the same volume                              Decreaed                    No booking...
La.n	  America                      Direct	  from	  your	  website                                             79%        ...
Increased                   About the same volume                        Decreased                No bookings via this cha...
Increased                  About the same volume                         Decreased                           No bookings v...
SecOon	  2:	  	  Online	  Penetra.on	  (for	  suppliers)
Online	  Distribu.on	  Propor.ons	  for	  Suppliers	       Over	  the	  last	  quarter	  and	  across	  all	  companies	  ...
Whilst	  it	  is	  important	  to	  consider	  the	  loca7on	  where	  the	  company	  is	  based,	  more	  importantly	  ...
SecOon	  3:	  	  Direct	  vs	  Indirect	  Distribu.on	  	   	   	   (for	  suppliers)
Direct	  vs.	  Indirect	  Distribu.on	  (Suppliers)	  Travel	  suppliers	  distribu7ng	  their	  product	  online	  either...
Aetudes	  Towards	  Direct	  vs.	  Indirect	  Distribu.on	  The	  barometer	  is	  looking	  to	  understand	  the	  sen7m...
Has	  the	  number	  of	  online	  3rd	  party	  distribu.on	  channels	  you’ve	  worked	  with	  increased	  or	        ...
Has	  the	  number	  of	  online	  3rd	  party	  distribu.on	  channels	  you’ve	  worked	  with	  increased	  or	  declin...
Ideal	  propor.on	  of	  direct	  sales	                           15%                                                    ...
SecOon	  4:	  	  Current	  Sen.ment	  Towards	  the	  	   	   	   OTA-­‐Supplier	  Partnership
Sen.ment	  towards	  the	  OTA-­‐Supplier	  Partnership	  Below	  we	  highlight	  some	  of	  the	  key	  themes	  emergi...
Looking	  at	  more	  posi7ve	  sen7ment,	  the	  OTAs	  feel	  that	  suppliers	  are	  really	  good	  at	  being	  flexi...
Travel distribution & marketing barometer may 2011
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Travel distribution & marketing barometer may 2011

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EyeforTravel conducted a global survey amongst key travel executives in January to February 2011 with the aim of investigating distribution and marketing performance and perspectives for the quarter.

Published in: Travel, Business

Travel distribution & marketing barometer may 2011

  1. 1. Travel  Distribu.on  &  Marke.ng  Barometer Edi.on  1 May  2011  
  2. 2. About  the  Travel  Distribu.on  &  Marke.ng  Barometer  EyeforTravel  conducted  a  global  survey  amongst  key  travel  execu7ves  in  January  to  February  2011  with  the  aim  of  inves7ga7ng  distribu7on  and  marke7ng  performance  and  perspec7ves  for  the  quarter.  This  is  the  first  edi7on  of  the  Travel  Distribu7on  &  Marke7ng  Barometer.  It’s  intended  to  be  an  ongoing  research  study  designed  to  act  as  a  barometer  for  the  global  travel  industry  and  provide  richer  intelligence  to  enable  a  greater  understanding  of  current  and  future  distribu7on  and  marke7ng  trends.  An  online  survey  will  con7nue  to  be  conducted  to  gather  up  to  the  minute  opinions  and  track  ac7vi7es  of  travel  companies.  The  results  will  produce  invaluable  data  and  allow  a  consistent  and  compara7ve  analysis  of  trends  across  sectors  and  regions.This  edi7on  was  completed  by  550  different  travel  suppliers  and  intermediaries  varying  in  size  and  sector  across  the  world.  Below  we  can  view  the  number  of  companies  that  responded  from  each  country  involved  in  order  to  help  understand  the  weigh7ng  of  our  results.  It  is  evident  that  some  regions  (such  as  Africa)  are  weaker  in  terms  of  volumes  and  we  want  to  point  out  that  the  findings  for  this  region  par7cularly  should  be  referred  to  as  interes7ng  but  insight  rather  than  a  sound  sta7s7cal  representa7on.        “What  country  are  YOU  based  in?” United  States 117 United  Kingdom 67 India 59 Australia 33 China 23 Singapore 23 Spain 22 Netherlands 20 Greece 18 France 11 Germany 11 Thailand 11 Italy 9 Brazil 7 Indonesia 7 Russian  Federation 7 Switzerland 7 Ireland  {Republic} 6 Norway 6 Portugal 6 Belgium 5 Japan 5 Malaysia 5 Philippines 5 Argentina 4 Bulgaria 4 Colombia 3 Cyprus 3 Denmark 3 Malta 3 New  Zealand 3 Turkey 3 Afghanistan 2 Austria 2 Bangladesh 2 Canada 2 Chile 2 Lithuania 2 Mauritius 2 Nepal 2 Pakistan 2 Sri  Lanka 2 Barbados 1 Costa  Rica 1 Croatia 1 Fiji 1 Finland 1 Hungary 1 Korea  South 1 Mexico 1 Slovenia 1 Sweden 1 Taiwan 1 Tanzania 1 United  Arab  Emirates 1 Uzbekistan 1 0 38 75 113 150
  3. 3. The  first  chart  below  explains  the  involvement  of  our  respondents  globally  in  terms  of  geographical  regions.  For   example,  56%  of  companies  involved  in  our  survey  have  offices  in  Western  Europe.       Does  the  company  you  represent  have  offices  in  any  of  the  following  regions  (including  your  own)? West  Europe 56% East  Europe 25% North  America 45% Latin  America 20%Australia/New  Zealand 26% Asia  &  Pacific 43% Middle  East 21% Africa 15% 0% 15% 30% 45% 60% This  second  chart  indicates  the  actual  market  responsibility  of  our  respondents  and  while  we  refer  to  the  specific   loca7on  (country)  in  which  a  respondent  is  permanently  based  (above),  we  are  also  interested  in  the  regions  they  are   responsible  for  targe7ng  on  the  basis  that  this  is  likely  to  influence  their  ac7vi7es  and  perspec7ves.  We  can  see  below   for  example  that  40%  are  targe7ng  Western  European  markets  whereas  56%  have  offices  in  that  region  (above),  but   also  35%  selected  ‘global’  which  would  include  all  markets.  Overall,  our  survey  results  present  a  good  representa7on   for  all  regions  throughout  the  world  which  has  allowed  us  to  offer  our  readers  a  very  interes7ng  picture  globally.     Which  regions  /  markets  is  THE  OFFICE  YOU  ARE  REPRESENTING  responsible  for  targeting? Global 35% West  Europe 40% East  Europe 22% North  America 31% Latin  America 13% Asia  /  Pacific 28%Australia/New  Zealand 16% Middle  East 14% Africa 9% 0% 10% 20% 30% 40%
  4. 4. Contents  SecOon  1:     Distribu(on  Channels  SecOon  2:     Online  Penetra(on  (for  suppliers)SecOon  3:     Direct  vs  Indirect  Distribu(on  (for  suppliers)  SecOon  4:     Current  Sen(ment  Towards  the  OTA-­‐Supplier  Partnership  SecOon  5:     Sources  of  Online  Traffic  In  Travel  SecOon  6:     Marke(ng  Channels  SecOon  7:     Marke(ng  Budgets  SecOon  8:     Online  Marke(ng  Ac(vi(es  -­‐  What’s  Working  SecOon  9:     Social  Media  Par(cipa(on  SecOon  10:     Mobile  SecOon  11:     Next  Quarter  Budgets  SecOon  12:     Biggest  Challenges  SecOon  13:     What  Has  The  Industry  Learnt  Recently?SecOon  14:     Biggest  Opportuni(es  Iden(fiedSecOon  15:     Next  Big  Thing  in  Travel  Distribu(on  &  Marke(ngIf  you’d  like  to  join  our  research  panel  please  contact  Tim  Gunstone:  Om@eyefortravel.com
  5. 5. SecOon  1:    Distribu.on  Channels  
  6. 6. Distribu.on  ChannelsBooking  Channels    Figure  x  analyses  channels  for  bookings  (volumes)  over  the  last  quarter  represen7ng  the  respondents  of  our  supplier  focussed  survey.  72%  have  experienced  an  increase  in  bookings  direct  from  their  websites  with  only  a  small  propor7on  registering  a  decline  (5%).  Bookings  direct  via  voice/call  centre  have  declined  for  20%  of  respondents  and  increased  for  29%.  42%  have  not  experienced  any  change  from  this  channel.  30%  have  experienced  an  increase  in  bookings  via  mobile  device,  52%  have  not  had  bookings  at  all  via  this  channel.  47%  have  had  an  increase  in  bookings  from  3rd  par7es,  31%  from  GDS/agency  and  24%  from  tour  operators.Figure  1:  Have  your  bookings  (volumes)  generated  via  the  following  channels  increased  or  decreased  over  the  last  3  months  (from  the  previous  quarter)? Increased About  the  same  volume Decreased No  bookings  via  this  channel Direct  from  your  website 72% 22% 5% 2% Direct  via  voice/call  centre 29% 42% 20% 10% Direct  from  a  mobile  device 30% 16% 2% 52% Third  party  Internet  channel  (e.g.  OTA) 47% 35% 9% 10% GDS/agency 31% 36% 19% 15% Tour  operator 24% 39% 22% 15% 0% 25% 50% 75% 100%    In  the  charts  below  we  have  then  explored  our  data  based  on  the  regions  that  respondents  are  responsible  for  in  order  to  inves7gate  any  interes7ng  trends  geographically.  Direct  distribu7on  from  their  websites  shows  no  major  varia7ons.  The  majority  have  experienced  an  increase  across  all  regions.  Those  represen7ng  La7n  America  register  the  highest  number  of  respondents  with  an  increase  at  79%.  It  clear  that  in  all  markets,  companies  have  either  had  an  increase  in  bookings  direct  from  their  websites  or  the  volumes  have  stayed  the  same.  The  largest  decline  across  all  regions  is  bookings  from  tour  operators.  The  GDS/agency  channel  closely  follows  but  s7ll  around  a  quarter  of  respondents  in  most  regions  have  experienced  an  increase  from  this  channel.  3rd  party  internet  channels  have  been  genera7ng  more  bookings  for  most  regions  as  well.  Most  are  hovering  around  the  50%  mark  except  La7n  America  where  36%  of  respondents  have  seen  an  increase.  Fewer  companies  from  those  represen7ng  Australia/NZ  have  experienced  a  decline  from  these  indirect  channels  in  comparisons  tother  markets.  Those  represen7ng  North  America,  Africa  and  the  Middle  East  seem  to  have  been  having  the  most  ac7vity  in  terms  of  mobile  bookings.  For  North  America  for  example,  37%  of  respondents  have  seen  an  increase  in  bookings  direct  from  a  mobile  device.  North  America  have  also  registered  a  larger  propor7on  with  an  increase  in  bookings  via  voice/call  centre  (31%).  The  biggest  decline  is  from  those  represen7ng  Eastern  Europe  (24%).
  7. 7. Booking  Channels  By  Region   Increased About  the  same  volume Decreased No  bookings  via  this  channelWestern  Europe   Direct  from  your  website 71% 22% 7% 1%  Tour  operator   25% 34% 25% 16% GDS/agency 24% 38% 22% 16% Third  party  Internet  channel  (e.g.  OTA) 45% 35% 11% 9%  Direct  from  a  mobile  device 27% 16% 2% 55%  Direct  via  voice/call  centre 22% 44% 20% 14% 0% 25% 50% 75% 100% %  of  respondents  representing  Western  EuropeEastern  Europe   Direct  from  your  website 0% 72% 20% 8%  Tour  operator   30% 29% 25% 16% GDS/agency 26% 40% 16% 18% Third  party  Internet  channel  (e.g.  OTA) 51% 28% 8% 13%  Direct  from  a  mobile  device 29% 20% 1% 50%  Direct  via  voice/call  centre 18% 46% 24% 12% 0% 25% 50% 75% 100% Eastern  EuropeNorth  America Direct  from  your  website 0% 76% 20% 4%  Tour  operator   21% 34% 29% 16% GDS/agency 22% 38% 21% 18% Third  party  Internet  channel  (e.g.  OTA) 38% 39% 11% 12%  Direct  from  a  mobile  device 37% 16% 1% 46%  Direct  via  voice/call  centre 31% 44% 14% 11% 0% 25% 50% 75% 100% North  America
  8. 8. Increased About the same volume Decreaed No bookings via this channelAustralia  /  New  Zealand Direct  from  your  website 0% 78% 22%  Tour  operator   31% 29% 29% 10% GDS/agency 26% 38% 19% 17% Third  party  Internet  channel  (e.g.  OTA) 47% 36% 3% 14%  Direct  from  a  mobile  device 29% 16% 2% 53%  Direct  via  voice/call  centre 26% 47% 14% 14% 0% 25% 50% 75% 100% Australia/NZAsia  Pacific Direct  from  your  website 69% 27% 3% 1%  Tour  operator   32% 38% 21% 9% GDS/agency 29% 36% 20% 15% Third  party  Internet  channel  (e.g.  OTA) 49% 34% 11% 5%  Direct  from  a  mobile  device 30% 19% 3% 48%  Direct  via  voice/call  centre 26% 46% 19% 9% 0% 25% 50% 75% 100% APACAfrica Direct  from  your  website 0% 77% 17% 7%  Tour  operator   27% 33% 27% 13% GDS/agency 17% 50% 23% 10% Third  party  Internet  channel  (e.g.  OTA) 53% 33% 10% 3%  Direct  from  a  mobile  device 0% 37% 17% 47%  Direct  via  voice/call  centre 20% 57% 17% 7% 0% 25% 50% 75% 100% Africa
  9. 9. La.n  America Direct  from  your  website 79% 15% 3%3%  Tour  operator   23% 26% 33% 18% GDS/agency 18% 41% 23% 18% Third  party  Internet  channel  (e.g.  OTA) 36% 38% 10% 15%  Direct  from  a  mobile  device 0% 28% 18% 54%  Direct  via  voice/call  centre 23% 46% 15% 15% 0% 25% 50% 75% 100% Latin  AmericaMiddle  East Direct  from  your  website 70% 22% 6% 2%  Tour  operator   30% 28% 28% 14% GDS/agency 24% 38% 18% 20% Third  party  Internet  channel  (e.g.  OTA) 44% 36% 10% 10%  Direct  from  a  mobile  device 34% 14% 4% 48%  Direct  via  voice/call  centre 20% 52% 16% 12% 0% 25% 50% 75% 100% %  Middle  Esst Booking  Channels  By  Company  Sector  Considering  movements  in  bookings  channels  based  on  company  sector  we  can  see  that  there  are  again  no  major  trends  in  this  category  between  sectors,  except  that  a  larger  propor7on  of  DMCs/tourism  boards  have  experienced  a  decline  (27%)  in  bookings  direct  from  their  website.  Cruise,  Car  Rental  and  Airline  have  registered  the  largest  propor7ons  with  an  increase  at  75%,  75%  and  73%  respec7vely.  There  are  more  varia7ons  between  sectors  when  looking  at  bookings  via  voice/call  centre.  50%  of  Cruise  have  registered  an  increase  from  this  channel,  but  on  the  other  hand  50%  have  registered  a  decline  so  there  is  certainly  some  movement  in  this  sector  and  varying  trends  between  companies.  It  is  clear  that  although  this  channel  is  declining  for  a  number  of  companies  across  all  sectors,  such  as  21%  of  Hotel  and  Other  Accommoda7on,  and  a  quarter  of  Car  rental  companies,  it  is  s7ll  an  ac7ve  channel  for  bookings.  Bookings  via  mobile  devices  are  not  common  in  any  sector,  apart  from  perhaps  Car  Rental  where  only  13%  of  respondents  have  received  no  bookings  from  mobile  at  all.  Car  Rental  are  evidently  the  most  ac7ve  in  the  mobile  space  at  the  moment  and  a  huge  75%  of  respondents  have  experienced  an  increase  from  this  channel.  Hotel  and  Airline  are  also  faring  well  with  32%  and  35%  respec7vely  registering  an  increase  in  mobile  bookings  which  is  significant.  The  largest  decline  is  in  the  DMC/tourism  board  category.      
  10. 10. Increased About the same volume Decreased No bookings via this channel Direct  from  Website   Tour  operator 67% 25% 6% 2%Other  accommodation 71% 13% 13% 4% Hotel 74% 22% 2%1% DMC  /  tourism  board 0% 64% 9% 27% Cruise 0% 75% 25% Car  Rental 0% 75% 25% Airline 0% 73% 19% 8% 0% 25% 50% 75% 100% %  of  respondents Direct  via  voice/call  centre Tour  operator 31% 46% 15% 8%Other  accommodation 21% 33% 21% 25% Hotel 32% 41% 21% 5% DMC  /  tourism  board 9% 55% 18% 18% Cruise 0% 50% 50% Car  Rental 0% 13% 63% 25% Airline 19% 62% 15% 4% 0% 25% 50% 75% 100% %  of  respondents Direct  from  mobile  device Tour  operator 23% 23% 2% 52%Other  accommodation 17% 17% 4% 62% Hotel 32% 14% 2% 52% DMC/tourism  board 9% 18% 18% 55% Cruise 0% 25% 25% 50% Car  Rental 0% 75% 13% 13% Airline 0% 35% 19% 46% 0% 25% 50% 75% 100% %  of  respondents
  11. 11. Increased About the same volume Decreased No bookings via this channel Third  party  internet  channel  (e.g.  OTA) Tour  operator 37% 27% 8% 29%Other  accommodation 50% 17% 13% 21% Hotel 54% 39% 6% 1% DMC  /  tourism  board 0% 45% 36% 18% Cruise 25% 25% 25% 25% Car  Rental 0% 38% 25% 38% Airline 58% 27% 12% 4% 0% 25% 50% 75% 100% %  of  respondents GDS/Agency Tour  operator 25% 40% 6% 29% Other  accommodation 21% 33% 21% 25% Hotel 34% 35% 24% 7% DMC  /  tourism  board 45% 27% 18% 9% Cruise 0% 50% 50% Car  Rental 13% 50% 25% 13% Airline 35% 39% 19% 8% 0% 25% 50% 75% 100% %  of  respondents Tour  OperatorOther  accommodation 25% 17% 13% 46% Hotel 19% 42% 32% 6% DMC/  tourism  board 36% 18% 18% 27% Cruise 0% 50% 50% Car  Rental 0% 50% 38% 13% Airline 35% 42% 12% 12% 0% 25% 50% 75% 100% %  of  respondents
  12. 12. SecOon  2:    Online  Penetra.on  (for  suppliers)
  13. 13. Online  Distribu.on  Propor.ons  for  Suppliers   Over  the  last  quarter  and  across  all  companies  globally,  the  average  propor7on  of  total  booking  volumes  that  travel   suppliers  distributed  via  online  channels  was  41%.  As  expected  the  extent  of  online  distribu7on  varies  amongst   respondents.  While  par7cipants  were  asked  approximate  propor7ons  to  the  nearest  percent,  we  have  grouped  the   propor7ons  into  ranges  to  make  it  easier  to  iden7fy  trends.   With  reference  to  the  chart  below  we  can  see  that  7%  of  respondents  distributed  between  91%  and  100%  via  online   channels  and  9%  in  the  range  of  76%  to  90%.  That  results  in  16%  of  travel  suppliers  distribu7ng  over  ¾  of  their   products  via  online  channels  in  the  last  quarter.  19%  of  companies  distributed  between  50%  and  75%  online,  and  21%   between  30%  to  49%  online.  The  largest  group  at  29%  sit  within  11%  to  29%  range.  It  is  revealed  that  14%  rely  heavily   on  offline  channels  with  less  than  10%  of  their  product  volume  sold  online,  but  we  can  see  clearly  in  the  graph  that  a   large  propor7on  have  now  shihed  over  50%  of  their  product  distribu7on  online.         Approximately  what  proporOon  (%)  of  your  total  bookings  (volume)  were  distributed  via  online  channels  over  the   last  3  months? 14% 7% 9% 91%  -­‐  100% 76%  -­‐  90% 50%  -­‐  75%   30%  -­‐  49% 29% 19% 11%  -­‐  29% Less  then  10%   21% Looking  further  into  the  data  we  have  considered  the  varia7ons  based  on  some  of  the  top  travel  markets  looking  at   Europe  specifically  against  some  other  key  global  markets.  The  top  travel  markets  refer  to  the  specific  country  in  which   the  respondent  is  based.  The  top  band  (91%  to  100%)  is  most  dominant  amongst  UK  respondents.  A  significant  21%   fall  within  this  range.  Germany  (17%),  China  (7%),  Spain  (6%)  and  the  US  (2%)  have  also  indicated  high  dominance  of   online  channels  for  their  businesses.  On  the  other  end  of  the  scale,  China  indicates  the  dominance  of  offline  channels   with  40%  distribu7ng  less  than  10%  of  their  product  volume  online.  35%  of  Australian  respondents  and  27%  of  Indian   respondents  also  fall  within  this  range.  The  UK  illustrates  a  rela7vely  even  spread  of  online  distribu7on  propor7ons  but   edging  on  the  higher  bands  of  over  50%.  Spain  is  not  too  dissimilar  to  the  UK  but  with  a  larger  group  within  the  30%  to   49%  range.  Germany  and  France  are  dominated  by  companies  in  the  11%  to  29%  range,  Germany  also  includes  17%  at   the  top  end  of  the  scale,  but  neither  are  represen7ng  companies  with  very  low  online  distribu7on  levels.  Italy  very   evenly  falls  within  the  middle  ranges  but  with  a  compara7vely  high  propor7on  amongst  the  76%  to  90%.   100% 6% 6% 7% 2% 6% 21% 17% 9% 18% 13% 25% 13% 33%91% - 100% 28% 75% 11% 19% 24%76% - 90% 33% 29%50% - 75% 25% 40% 24%30% - 49% 50% 31% 33% 100% 31%11% - 29% 33% 18%Less then 10% 18% 25% 50% 50% 20% 25% 40% 18% 33% 35% 27% 13% 8% 6% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% UK n y ce ly es a a il lia an az di in ai Ita at an ra Sp In Ch Br rm St st Fr Au d   Ge ite Un
  14. 14. Whilst  it  is  important  to  consider  the  loca7on  where  the  company  is  based,  more  importantly  it  is  relevant  to  consider   where  the  majority  of  their  customers  come  from  as  it  is  the  level  of  online  penetra7on  in  their  source  markets  and   specific  characteris7cs  that  may  have  a  real  influence  on  the  results.  It  must  however  be  realised  that  the  results  will   be  somewhat  skewed  as  this  is  not  data  in  rela7on  to  that  specific  market  only,  but  indica7ve.  For  example,  those  who   are  distribu7ng  predominantly  to  Africa  are  selling  between  11%  and  29%  via  online  channels.  Of  those  distribu7ng   predominantly  to  the  Middle  East,  21%  sell  90%  via  offline  channels.   Propor.on  Distributed  Online  Based  On  Where  Majority  Of  Customer  Come  From100% 8% 2% 4% 2% 4% 100% 9% 3% 10% 9% 11% 9% 12% 10% 91%  -­‐  100% 14% 18% 7% 28% 76%  -­‐  90%75% 14% 7% 21% 27% 13% 28% 23% 26% 29% 50%  -­‐  75%  50% 42% 46% 38% 30%  -­‐  49% 26% 30% 29% 29% 11%  -­‐  29%25% Less  then  10%   21% 21% 14% 15% 15% 14% 12% 0% 0% 0% 0% 0% e e c ica ica ca d st i op op an cif Ea ri er er Af al ur ur Pa e   m m  Ze dl t  E  E  /    A  A st id ew ia es rth tin Ea M As W /N La No lia ra st Au
  15. 15. SecOon  3:    Direct  vs  Indirect  Distribu.on         (for  suppliers)
  16. 16. Direct  vs.  Indirect  Distribu.on  (Suppliers)  Travel  suppliers  distribu7ng  their  product  online  either  sell  via  direct  channels  or  via  an  intermediary  (indirect).  In  this  survey  of  all  suppliers  combined  globally  the  average  propor7on  of  direct  distribu7on  is  49%.  The  chart  below  indicates  the  varia7on  in  online  distribu7on  pamerns  amongst  respondents  for  example  14%  of  respondents  are  distribu7ng  less  than  10%  of  their  online  sales  through  direct  channels,  which  means  90%  is  sold  via  an  intermediary.  26%  of  all  respondents  are  distribu7ng  over  ¾  of  their  online  sales  direct.  When  asked  what  their  ideal  propor7on  of  direct  sales  would  be,  this  averaged  at  62%Propor.on  of  respondents  in  the  direct  distribu.on  propor.on  categories 30% % of repondents 23% 24% 20% 19% 15% 17% 14% 8% 7% 0%   % %   % 0% % % 29 49 90 10 75 10  -­‐    -­‐    -­‐      -­‐   en  -­‐   % % % % % 11 30 76  th 50 91 ss LePropor.on  of  respondents  in  the  indirect  distribu.on  propor.on  categoriesWhilst  the  figures  below  should  match  neatly  with  the  figures  above  there  may  be  some  discrepancy  here  as  it  was  led  up  to  the  respondents  to  be  as  accurate  as  possible.  What  we  can  deduce  from  the  data  is  that  travel  suppliers  are  not  en7rely  reliant  on  online  intermediaries  for  their  sales  whilst  they  are  clearly  playing  a  significant  role  for  the  suppliers.   %  of  respondents 30% 26% 23% 23% 20% 15% 17% 8% 10% 3% 0%   % %   % 0% 0% % 29 49 90 75 10  1  -­‐    -­‐    -­‐    -­‐   en  -­‐   % % % % % 11 30 76  th 50 91 ss Le
  17. 17. Aetudes  Towards  Direct  vs.  Indirect  Distribu.on  The  barometer  is  looking  to  understand  the  sen7ment  of  the  travel  industry  during  the  last  quarter.  It  looks  to  have  been  a  generally  posi7ve  quarter  for  online  sales  with  28%  feeling  that  their  direct  online  sales  were  bemer  than  they  expected  and  26%  for  indirect  sales.  Both  direct  and  indirect  sales  were  as  expected  for  the  majority  of  respondents,  44%  and  47%  respec7vely.    9%  of  respondents  were  extremely  posi7ve  sta7ng  that  their  direct  sales  were  much  bemer  than  expected  and  8%  for  indirect  sales.  Those  on  the  nega7ve  end  of  the  scale  amounted  to  18%  in  rela7on  to  direct  and  17%  for  indirect  sales.  Only  a  small  propor7on  stated  either  online  channel  was  much  worse  than  expected.  How  do  you  feel  about  the  results  of  your  direct  and  indirect  sales  over  the  last  quarter   Direct Indirect   9% Much  better  than  I  expected 8% 28% Better  than  expected 26% 44% As  expected 47% 15% Worse  than  expected 15% 3% Much  worse  than  expected 2% 1%None  distributed  via  this  channel 2% 0% 13% 25% 38% 50%The  role  of  online  intermediaries  in  the  distribu7on  of  travel  supplier  products  is  clearly  significant.  Over  half  of  all  respondents  state  that  indirect  online  channels  have  been  extremely  or  very  important  to  their  company  in  the  last  3  months.  Also  adding  those  respondents  that  consider  indirect  channels  ‘important’  it  results  in  85%  of  respondents.  Whilst  suppliers  are  aiming  to  distribute  a  higher  propor7on  of  online  sales  via  direct  channels,  it  is  clear  that  intermediaries  are  rates  as  a  channel  by  most.  47%  have  increased  the  number  of  online  third  party  distribu7on  channels  that  they  have  worked  with  over  the  last  quarter  and  44%  are  maintaining  the  same  number.  Just  6%  have  reduced  the  number  of  partners  and  4%  did  not  work  with  any  at  all.Please  rate  below  how  important  INDIRECT  online  channels  have  been  to  your  company  in  the  last  3  months Extremely  important 19% Very  important 34% Important 32% Neither  important  nor  unimportant 11% % of respondents Not  important 4% 0% 10% 20% 30% 40%
  18. 18. Has  the  number  of  online  3rd  party  distribu.on  channels  you’ve  worked  with  increased  or   declined  in  the  last  3  months  compared  to  the  previous  quarter?     Increased 47% About  the  same  volume 44% Suppliers Declined 6% We  did  not  work  with  any 4% 0% 13% 25% 38% 50% %  of  respondents Considering  the  different  travel  sectors,  Cruise  are  the  most  reliant  upon  indirect  channels  for  online  distribu7on  with   50%  ra7ng  them  extremely  important.  In  comparison  only  8%  of  airlines  stated  them  extremely  important  but  a   further  38%  rate  them  very  important.  The  accommoda7on  sector  rate  them  highly  with  Hotel  resul7ng  in  61%  of   respondents  ra7ng  indirect  channels  either  extremely  or  very  important.  13%  of  the  Other  Accommoda7on  sector  rate   indirect  channels  as  ‘not  important’  which  could  perhaps  be  in  rela7on  to  the  type  or  size  of  inventory.  Indirect   channels  are  less  relevant  for  DMCs/tourism  boards  which  is  understandable  based  on  the  nature  of  their  product.   Please  rate  below  how  important  INDIRECT  online  channels  have  been  to  your  company  in  the  last   3  months       Extremely important Very important Important Neither important nor unimportant Not important Tour  operator 17% 19% 37% 17% 10%Other  accommodation 21% 25% 21% 21% 13% Hotel 0% 22% 39% 32% 7% DMC  /  tourism  board 0% 9% 36% 36% 18% Cruise 0% 0% 50% 25% 25% Car  Rental 0% 25% 38% 13% 25% Airline 8% 39% 42% 8% 4% 0% 25% 50% 75% 100% %  of  respondents
  19. 19. Has  the  number  of  online  3rd  party  distribu.on  channels  you’ve  worked  with  increased  or  declined  in  the  last  3  months  compared  to  the  previous  quarter?Echoing  the  results  above,  Cruise  have  been  increasing  the  number  of  3rd  party  distribu7on  channels  they  are  working  with  in  the  last  quarter.  Tour  Operator,  Other  Accommoda7on,  Hotel,  DMC/tourism  board  and  Airline  have  reduced  the  number,  10%,  8%,  4%,  9%  and  12%  respec7vely.  The  tour  operators,  which  can  blur  over  the  borders  of  supplier  and  intermediary,  Other  Accommoda7on  and  the  DMC/tourism  board  sectors  have  propor7ons  that  do  not  work  with  3rd  party  partners  at  all.  Cruise  and  Car  Rental  have  both  either  increased  or  remained  consistent  with  the  number  of  indirect  channels.   Increased About the same volume Declined We did not work with any Tour  operator 39% 40% 10% 12%Other  accommodation 58% 25% 8% 8% Hotel 49% 46% 4% 1% DMC  /  tourism  board 45% 36% 9% 9% Cruise 0% 75% 25% Car  Rental 0% 50% 50% Airline 0% 46% 42% 12% 0% 25% 50% 75% 100% %  of  responentsDo  you  mind  what  the  ra.o  of  direct  vs.  Indirect  distribu.on  is?It  has  been  established  that  indirect  distribu7on  channels  are  playing  an  important  role  for  online  distribu7on.  When  asked  if  they  mind  what  the  ra7o  of  direct  vs  indirect  distribu7on  is  84%  stated  yes.  Due  to  cost  of  sale  and  other  such  reasons  suppliers  are  unexpectedly  preferable  towards  direct  distribu7on.  The  chart  below  indicates  the  ideal  propor7on  of  direct  sales  as  a  total  of  online  sales.  12%  are  aiming  for  100%  direct  distribu7on  whereas  the  average  for  all  respondents  combined  as  men7oned  earlier  is  62%. Yes No 16% 84%
  20. 20. Ideal  propor.on  of  direct  sales   15% 12% 12%%  of  respondents 11% 11% 10% 9% 7% 8% 5% 5% 4% 4% 4% 2% 2% 3% 2% 2% 1% 1% 2% 2% 1% 1% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 1 5 8 10 11 12 14 15 17 20 25 28 30 33 35 40 45 50 55 60 65 70 75 76 80 85 90 92 95 98 99 100 Ideal  %  on  online  distribution  via  direct  channels How  fair  suppliers  feel  the  partnership  with  OTAs  are   There  is  currently  some  debate  amongst  the  travel  industry  as  to  the  value  of  the  partnerships  between  suppliers  and   OTAs.  We  ques7onned  the  fairness  of  the  current  partnership  with  both  suppliers  and  OTAs.  The  chart  below  illustrates   that  most  suppliers  are  siong  on  the  fence  but  it’s  weighed  towards  being  more  unfair.  33%  feel  that  it  is  neither  fair   nor  unfair.,  and  23%  ‘quite  unfair’.  Results  from  the  more  open  ques7ons  reveal  that  while  elements  of  the  partnership   are  not  enormously  praised  they  are  channel  of  distribu7on  that  are  valued  in  some  respects.  Only  3%  state  it  is   extremely  unfair. How  fair  intermediaries  feel  the  partnership  with  suppliers  is Extremely  FAIR 1% Very  fair 5% Quite  fair 29% Neither  fair  nor  unfair 33% Quite  unfair 23% Very  unfair 7% Extremely  UNFAIR 3% 0% 10.0% 20.0% 30.0% 40.0% %  of  respondents The  intermediary  perspec7ve  is  not  too  dissimilar  but  weighted  more  to  being  fair.  35%  state  neither  fair  not  unfair   and  32%  state  it’s  quite  fair.   Extremely  FAIR 2% Very  fair 11% Quite  fair 32% Neither  fair  nor  unfair 35% Quite  unfair 16% Very  unfair 2% Extremely  UNFAIR 3% 0% 10.0% 20.0% 30.0% 40.0%
  21. 21. SecOon  4:    Current  Sen.ment  Towards  the         OTA-­‐Supplier  Partnership
  22. 22. Sen.ment  towards  the  OTA-­‐Supplier  Partnership  Below  we  highlight  some  of  the  key  themes  emerging  in  this  edi7on  surrounding  the  partnership  between  the  Online  Travel  Agents  (OTAs)  and  suppliers.  In  the  first  image  we  can  iden7fy  that  the  key  concern  is  that  commission  rates  are  too  high  and  margins  are  being  squeezed.  Rate  parity  is  another  major  concern  in  the  current  situa7on.    What  suppliers  dislike  about  the  partnership  with  OTAs  From  the  OTA  perspec7ve,  the  image  below  illustrates  their  concerns.  The  main  theme  is  around  availability,  or  lack  of,  and  the  growth  in  direct  bookings  of  course.  Their  are  concerns  around  the  level  of  technology  that  suppliers  invest  in  to  maximise  the  partnership  and  are  looking  for  developments  in  this  area.  Readers  can  study  the  image  to  pick  up  some  of  them  other  issues.  The  larger  the  word  the  more  common  it  was  in  the  responses.  What  OTAs  dislike  about  the  current  partnership  with  suppliers  
  23. 23. Looking  at  more  posi7ve  sen7ment,  the  OTAs  feel  that  suppliers  are  really  good  at  being  flexible  and  value  this  characteris7c  in  a  partner  that  is  having  to  operate  in  such  a  dynamic  industry.  They  feel  the  range  of  products  on  offer  are  great  and  they’ve  really  improved  in  their  online  presence  to  help  the  partnership  reach  new  levels.  Suppliers  that  are  efficient  and  willing  to  work  with  the  OTAs  are  rated.  What  do  the  OTAs  like  about  the  partnership  with  suppliers?  While  suppliers  have  iden7fied  (as  we  show  above)  their  concerns  over  the  commission  rates,  the  OTAs  are  s7ll  hugely  valued  as  a  distribu7on  and  marke7ng  channel  in  today’s  market.  The  level  of  reach  that  they  have  the  ability  to  drive  for  distribu7on  and  overall  marke7ng  purposes  is  the  most  common  theme.  It  is  also  noted  that  the  strength  of  their  brands  in  some  of  the  more  marginal  markets  makes  the  partnership  a  very  valuable  one.  For  many  travel  companies  the  OTAs  are  brining  them  in  incremental  business  and  any  sale  is  considered  good.  What  suppliers  like  about  the  partnership  with  intermediaries…  

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