Hotel Online Distribution Focus North America 2009

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Hotel Online Distribution Focus North America 2009

  1. 1. North American Online Travel Report 2009 - Hotel Focus -
  2. 2. EyeforTravel Research 7-9 Fashion Street London E1 6PX UK For queries contact: amy@eyefortravel.com www.eyefortravelresearch.com EyeforTravel Ltd, April 2009 2 © EyeforTravel Research. All rights reserved.
  3. 3. North America Online Travel Report 2009 Table of Contents Table of Contents List of Figures 4 Methodology 7 Executive Summary 11 Chapter 1: North American Travel Market Analysis 17 North American Travel Market Overview 17 US vs. Canada Travel Market Analysis 37 US Travel Market Analysis 45 Canadian Travel Market Analysis 54 Chapter 2: North American Hotel Sector Analysis 63 North American Hotel Sector Overview 63 US Hotel Market Analysis 71 Canadian Hotel Market Analysis 82 3 © EyeforTravel Research. All rights reserved.
  4. 4. List of Figures List of Figures Figure 1.1: North America Total Volume of Travel, 2002-2012F 17 Figure 1.2: North America Volume of Travel - Domestic vs. Outbound (%), 2002-2012F 17 Figure 1.3: North America Volume of Domestic Travel, 2002-2012F 18 Figure 1.4: North America Volume of Outbound Travel, 2002-2012F 18 Figure 1.5: North America Travel Market Gross Value, 2002-2012F 19 Figure 1.6: Spend per Trip in US$ (North America), 2002-2012F 19 Figure 1.7: North American Travel Market - Sector Breakdown (US$), 2002-2012F 20 Figure 1.8: North American Travel Market - Sector Breakdown (%), 2008 20 Figure 1.9: North American Travel Market - Sector Breakdown (%), 2002-2012F 21 Figure 1.10: North American Travel Market - Y-o-Y Growth by Sector, 2002-2012F 22 Figure 1.11: North American Travel Market - CAGR by Sector, 2002-2007 and 2008-2012F 22 Figure 1.12: Online Penetration of the North American Travel Market, 2002-2012F 23 Figure 1.13: Value of North American Travel Market - Online vs. Offline, 2002-2012F 24 Figure 1.14: Sector Breakdown of North American Online Travel Market (%), 2008 25 Figure 1.15: Sector Breakdown of North American Online Travel Market (%), 2002-2012F 25 Figure 1.16: North American Online Travel Market - CAGR by Sector, 2002-2007 and 2008-2012F 26 Figure 1.17: Online/Offline Distribution Values - North American Airline Market, 2002-2012F 27 Figure 1.18: Online/Offline Distribution Values - North American Hotel Market, 2002-2012F 27 Figure 1.19: Online/Offline Distribution Values - North American Car Rental Market, 2002-2012 27 Figure 1.20: Online/Offline Distribution Values - North American Bus Market, 2002-2012F 28 Figure 1.21: Online/Offline Distribution Values - North American Cruise Market, 2002-2012F 28 Figure 1.22: Online/Offline Distribution Values - North American Railway Market, 2002-2012F 28 Figure 1.23: Online/Offline Distribution Values - North American Package Market, 2002-2012F 29 Figure 1.24: Value of the North American Travel Market - Domestic vs. Outbound, 2002-2012F 29 Figure 1.25: North American Travel Market - Domestic vs. Outbound (%), 2008 30 Figure 1.26: North American Travel Market - Domestic vs. Outbound (%), 2002-2012F 30 Figure 1.27: North American Travel Market - Y-o-Y Growth Domestic vs. Outbound (%), 2002-2012F 31 Figure 1.28: Spend per Trip (North America Averages) - Domestic vs. Outbound, 2002-2012F 31 Figure 1.29: North American Online Travel Market - Domestic vs. Outbound (%), 2002-2012F 32 Figure 1.30: North American Online Travel Market - Domestic vs. Outbound (%), 2008 33 Figure 1.31: Value of the North American Online Travel Market - Domestic vs. Outbound, 2002-2012F 33 Figure 1.32: North American Online Travel Market - Y-o-Y Growth Domestic vs. Outbound (%), 2002-2012F 33 Figure 1.33: North American Domestic Online Travel Market - Sector Breakdown (%), 2002-2012F 34 Figure 1.34: North American Domestic Online Travel Market - Sector Breakdown (%), 2008 35 Figure 1.35: North American Domestic Online Travel Market - Sector Breakdown Values (US$), 2002-2012F 35 Figure 1.36: North American Outbound Online Travel Market - Sector Breakdown (%), 2002-2012F 36 Figure 1.37: North American Outbound Online Travel Market - Sector Breakdown (%), 2008 36 Figure 1.38: North American Outbound Online Travel Market Value - Sector Breakdown (US$), 2002-2012F 36 Figure 1.39: US vs. Canada Total Volume of Travel, 2002-2012F 37 Figure 1.40: US vs. Canada Total Volume of Travel (%), 2002-2012F 37 Figure 1.41: US Volume of Domestic Trips, 2002-2012F 38 Figure 1.42: US Volume of Outbound Trips, 2002-2012F 39 Figure 1.43: Canada Volume of Domestic Trips, 2002-2012F 39 Figure 1.44: Canada Volume of Outbound Trips, 2002-2012F 39 Figure 1.45: Value of the North American Travel Market - US vs. Canada, 2002-2012F 40 Figure 1.46: North American Travel Market - US vs. Canada (%), 2002-2012F 41 Figure 1.47: Average Spend per Person per Trip - US and Canada, 2002-2012F 41 Figure 1.48: North American Online Travel Market - US vs.Canada (%), 2002-2012F 42 Figure 1.49: Value of the North American Online Travel Market, US vs. Canada, 2002-2012F 42 Figure 1.50: Online Penetration Comparison of the US and Canadian Gross Travel Markets, 2002-2012F 43 Figure 1.51: Online Penetration of the US Gross Travel Market, 2002-2012F 44 4 © EyeforTravel Research. All rights reserved.
  5. 5. North America Online Travel Report 2009 List of Figures Figure 1.52: Online Penetration of the Canadian Gross Travel Market, 2002-2012F 44 Figure 1.53: Value of the US Gross Travel Market, 2002-2012F 45 Figure 1.54: Value of the US Online Travel Market, 2002-2012F 45 Figure 1.55: US Travel Market - Domestic vs. Outbound (%), 2002-2012F 46 Figure 1.56: Value of US Gross Travel Market - Domestic vs. Outbound, 2002-2012F 47 Figure 1.57: Outbound Travel Destination Trends, 2002-2012F 48 Figure 1.58: Value of US Online Travel Market - Domestic vs. Outbound, 2002-2012F 48 Figure 1.59: US Online Travel Market - Domestic vs. Outbound (%), 2002-2012F 49 Figure 1.60: Online Penetration Comparison of US Domestic and Outbound Travel Markets, 2002-2012F 49 Figure 1.61: US Travel Market - Sector Breakdown (%), 2002-2012F 50 Figure 1.62: US Travel Market - Sector Breakdown (%), 2008 51 Figure 1.63: US Travel Market - Sector Breakdown (US$), 2002-2012F 51 Figure 1.64: US Travel Market - Y-o-Y Growth by Sector, 2002-2012F 51 Figure 1.65: US Online Travel Market - Sector Breakdown (%), 2002-2012F 52 Figure 1.66: US Online Travel Market - Sector Breakdown (%), 2008 52 Figure 1.67: US Online Travel Market - Sector Breakdown (US$), 2002-2012F 53 Figure 1.68: US Online Travel Market - Y-o-Y Growth by Sector, 2002-2012F 53 Figure 1.69: Sector Online Penetration, 2002-2012F 53 Figure 1.70: Value of the Canadian Gross Travel Market, 2002-2012F 54 Figure 1.71: Canadian Travel Market - Domestic vs. Outbound (%), 2002-2012F 55 Figure 1.72: Value of the Canadian Travel Market - Domestic vs. Outbound, 2002-2012F 55 Figure 1.73: Value of the Canadian Online Travel Market, 2002-2012F 56 Figure 1.74: Canadian Online Travel Market - Domestic vs. Outbound (%), 2002-2012F 57 Figure 1.75: Online Penetration Comparison of Domestic and Outbound Canadian Travel Market, 2002-2012F 57 Figure 1.76: Value of the Canadian Online Travel Market – Domestic vs. Outbound, 2002-2012F 58 Figure 1.77: Canadian Travel Market - Sector Breakdown (%), 2002-2012F 59 Figure 1.78: Canadian Travel Market - Sector Breakdown (%), 2008 59 Figure 1.79: Canadian Travel Market - Sector Breakdown (CAD $), 2002-2012F 60 Figure 1.80: Canadian Travel Market - Y-o-Y Growth by Sector, 2002-2012F 60 Figure 1.81: Canadian Online Travel Market - Sector Breakdown (%), 2002-2012F 61 Figure 1.82: Canadian Online Travel Market - Sector Breakdown (%), 2008 61 Figure 1.83: Sector Online Penetration, 2002-2012F 62 Figure 1.84: Canadian Online Travel Market - Y-o-Y Growth by Sector, 2002-2012F 62 Figure 1.85: Canadian Online Travel Market - Sector Breakdown (CAD $), 2002-2012F 62 Figure 2.1: Value of North American Gross Hotel Market, 2002-2012F 63 Figure 2.2: Online Penetration of the North American Hotel Market, 2002-2012F 64 Figure 2.3: Value of the North American Hotel Market, Offline vs. Online, 2002-2012F 64 Figure 2.4: North American Online Hotel Market as % of Total North American Online Travel Market 64 Figure 2.5: Value of North American Online Hotel Market, 2002-2012F 65 Figure 2.6: North American Hotel Market - Domestic vs. Outbound (%), 2002-2012F 66 Figure 2.7: Value of North American Hotel Market - Domestic vs. Outbound, 2002-2012F 66 Figure 2.8: North American Online Hotel Market - Domestic vs. Outbound (%), 2002-2012F 67 Figure 2.9: Value of North American Online Hotel Market - Domestic vs. Outbound, 2002-2012F 67 Figure 2.10: North American Hotel Market - US vs. Canada (%), 2002-2012F 68 Figure 2.11: Value of North American Hotel Market - US vs. Canada, 2002-2012F 68 Figure 2.12: North American Online Hotel Market - US vs. Canada (%), 2002-2012F 69 Figure 2.13: Online Penetration Comparison of North American, US and Canadian Hotel Markets, 2002-2012F 69 Figure 2.14: Value of the North American Online Hotel Market - US vs. Canada, 2002-2012F 70 Figure 2.15: US Hotel Market - Domestic vs. Outbound (%), 2002-2012F 71 Figure 2.16: Value of the US Hotel Market - Domestic vs. Outbound, 2002-2012F 72 Figure 2.17: Online Penetration of the US Hotel Market, 2002-2012F 72 Figure 2.18: Value of the US Hotel Market - Online vs. Offline, 2002-2012F 73 Figure 2.19: US Gross, Domestic and Outbound Online Hotel Markets as % of Respective Online Travel Market, 2002-2012F 74 Figure 2.20: Value of the US Online Hotel Market - Domestic vs. Outbound, 2002-2012F 74 5 © EyeforTravel Research. All rights reserved.
  6. 6. List of Figures Figure 2.21: Online Penetration Comparison of Total, Domestic and Outbound US Hotel Markets, 2002-2012F 75 Figure 2.22: Value of the US Online Domestic Hotel Market - Online vs. Offline, 2002-2012F 76 Figure 2.23: Online Penetration of the US Domestic Hotel Market, 2002-2012F 76 Figure 2.24: Value of the US Online Outbound Hotel Market - Online vs. Offline, 2002-2012F 76 Figure 2.25: Online Penetration of the US Outbound Hotel Market, 2002-2012F 77 Figure 2.26: US Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F 78 Figure 2.27: Value of the US Online Hotel Market, Direct vs. Indirect, 2002-2012F 78 Figure 2.28: US Domestic Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F 79 Figure 2.29: US Outbound Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F 79 Figure 2.30: Value of the US Domestic Online Hotel Market Value, Direct vs. Indirect Distribution, 2002-2012F 80 Figure 2.31: Value of the US Outbound Online Hotel Market Value, Direct vs. Indirect Distribution, 2002-2012F 80 Figure 2.32: Canadian Hotel Market - Domestic vs. Outbound (%), 2002-2012F 82 Figure 2.33: Value of the Canadian Hotel Market - Domestic vs. Outbound, 2002-2012F 83 Figure 2.34: Online Penetration of the Canadian Hotel Market, 2002-2012F 83 Figure 2.35: Value of the Canadian Hotel Market, Offline vs. Online, 2002-2012F 84 Figure 2.36: Online Penetration of the Canadian Domestic Hotel Market, 2002-2012F 85 Figure 2.37: Online Penetration of the Canadian Outbound Hotel Market, 2002-2012F 85 Figure 2.38: Canadian Gross, Domestic and Outbound Online Hotel Markets as % of Respective Online Travel Market, 2002-2012F 86 Figure 2.39: Value of the Canadian Online Hotel Market - Domestic vs. Outbound, 2002-2012F 87 Figure 2.40: Value of the Canadian Domestic Hotel Market - Offline vs. Online, 2002-2012F 87 Figure 2.41: Value of the Canadian Outbound Hotel Market - Offline vs. Online, 2002-2012F 88 Figure 2.42: Canadian Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F 88 Figure 2.43: Value of the Canadian Online Hotel Market, Direct vs. Indirect, 2002-2012F 89 Figure 2.44: Canadian Domestic Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F 90 Figure 2.45: Canadian Outbound Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F 90 Figure 2.46: Value of the Canadian Domestic Online Hotel Market, Direct vs. Indirect Distribution, 2002-2012F 91 Figure 2.47: Value of the Canadian Outbound Online Hotel Market, Direct vs. Indirect Distribution, 2002-2012F 91 6 © EyeforTravel Research. All rights reserved.
  7. 7. Executive Summary North America Online Travel Report 2009 Executive Summary > North American Travel Market Overview 2009 to be the first year this decade that a decline in travel expenditure is expected in the region The value of the North American travel market reached an estimated US$389,376 million in 2008 and a further 16% increase in volume is expect by 2012, but growth has slowed. 2009 is expected to be the first year this decade for a decline in the total value of travel expenditure and we forecast a recovery in 2010. Fastest growth in Hotel and Cruise sectors Airlines continue to account for the largest proportion of travel spend, followed by Hotels. In 2008 these sectors accounted for 35% and 25% of the total market respectively. Fastest growth has been in the Hotel and Cruise sectors. Online penetration of North American travel market reaches 35% Distribution trends within the North American market reveal some particularly interesting patterns. Whilst offline channels continue to account for the majority of travel spend online channel have been rapidly gaining share. In 2008 the online penetration of the North American travel market reached about 35% of the value. By 2012 we are expecting almost half of travel expenditure to be online. Growth rates of the online channel are expected to be lower than previous years but between 2008 and 2012 a total growth in value of almost 50% is forecast. The online travel market by 2012 is predicted to reach a value of US$201,382 million. That is an additional US$57,498 million annually to be circulated online by the end of 2012. All growth is online While the gross travel market experiences a relatively stagnant period, amongst this, the online travel market is showing very healthy growth and continuing to erode offline share. This illustrates the growing importance of online channels and the resilience to the economic downturn. The Airline sector dominates the online travel market (56%) and online expenditure on Airline products reached US$75,964 million in 2008. The value of the online travel market is forecast to grow in value by 44% between 2008 and 2012. The Hotel sector accounts for 32% of the total online travel market and US$42,831 million in 2008. Growth by 2012 is forecast to be up by a value of over 50%. The Car Rental sector is the next largest sector accounting for 7.7% and a value of US$10,389 million (2008). 11 © EyeforTravel Research. All rights reserved.
  8. 8. Executive Summary Growth in the value of the outbound travel market has been higher than the domestic travel market, but in 2009 a decline of 4.8% is expected in the outbound market for the first time. Good recovery is forecast for 2010. Domestic travel accounts for around 64% of the total online travel market and outbound 36%. Outbound travel products for North American consumers have performed well online and increased in share from 28% in 2002. From 2010 we expect grow in both domestic and outbound online markets to hit double digit figures again. Canada increases it significance in the North American travel market but US spend more per trip Canadian travellers accounted for 9.4% of total North American travel trips in 2002 and by 2012 we expect this to increase to 11.3%. Canada has out performed the US from a volume growth perspective. Canada is expected to grow by 1.8% in 2009, while the US experiences a decline of around 1%. In value terms, the US contributes 90% to the North American market and this is expected to remain relatively consistent during the review period in this report. US travellers have a higher spend per trip than Canadian travellers. US online travel market valued at US$123,346 million in 2008 The US accounts for 91% of the total North American online travel market. The US online travel market reached an estimated value of US$123,346 million in 2008 and Canada US$12,252 million (CAD $12,869 million). The US online market is slightly more advanced than Canada but penetration is relatively similar. 35.2% of US travel expenditure was online in 2008 against a 31.5% penetration for Canada. By 2012 we forecast 44.8% of all US travel expenditure to be online and 42% of Canadian. A continuously changing travel distribution landscape The contrast between the performances of online and offline channels is enormous. Online channels have been remarkably productive and growth rates have remained in double digit figures for every year reviewed in the report – with the exception of 2009 when annual growth is expected to fall to a level of 6.3% (still well above growth levels for the offline market for the entire period). Put alongside offline productivity, the 5.2% decline in the offline market for 2009 makes a very strong statement. The online channels certainly now seem strong despite times of instability. US outbound travel market is growing Just under 70% of US travel expenditure is currently on domestic travel. Outbound travel is growing well and at higher rates than the more mature domestic market. 2009 is however expected to result in an estimated 4.8% decline. Mexico and Canada are receiving the most outbound travellers, followed by the UK. Growth has been strongest in Germany 12 © EyeforTravel Research. All rights reserved.
  9. 9. Executive Summary North America Online Travel Report 2009 and Japan. A slightly higher proportion of domestic travel is bought online in comparison to outbound travel, but only marginally. Canadian travel market reaches US$38,869 million (CAD $40,825 million) in 2008 By 2012 the Canadian travel market is expected to be 73% larger in size than it was in 2002. The Canadian market is very different from the US in that outbound travel accounts for the majority of the Canadian travel market. In 2008 outbound travel contributed around 67% to the total Canadian travel market. Annual growth has generally been higher for outbound travel and a 5.5% CAGR is expected for the 2007-2012 review period. Canadian online travel market valued at US$1,986 million (2008) Online channels are also becoming increasingly significant for the Canadian travel market. Online penetration has jumped from 11% in 2002 to around 32% in 2008. Growth is expected to slow but continue to expand and penetrate around 42% of the market by 2012. The online travel market is divided fairly evenly between domestic and outbound markets, despite the domination of the outbound segment in the gross market. The domestic market has a higher online penetration and when in 2012 we forecast that 60% of domestic travel will be purchased online, 33% of the outbound segment will be online. Growth online for both has been remarkable though. Airline products make up a significant 61% of the Canadian online travel market and the data reveals that there is a lot of room for growth for some of the travel sectors. > Hotel Sector Dip in the North American Hotel market forecast for 2009 The North American Hotel market reached an estimated US$97,751 million in 2008, up 4.2% from 2007. Despite dip in 2009 (-3.6%), the Hotel market is reported to have performed well and by 2012 we expect the size to almost double from 2002 levels. Positive growth is expected to return again in 2010 and annual growth of around 7% is expected for the next three years. US and Canadian Hotel markets expected to experience a decline – but in different years The US Hotel market has reported slightly higher rates of growth than the Canadian market during the full review period of this report. Both markets are expected to take a hit from economic pressures but the Canadian market registered a 2.5% decline in 2008 when the US increased by 5.8%. Then when the Canadian market returns to positive growth with a 1.8% increase forecast in 2009, the US is expected to decline by 3.4%. By 2010 both markets are forecast to pick up and growth between 6% and 8% is expected. 13 © EyeforTravel Research. All rights reserved.
  10. 10. Executive Summary US outbound Hotel market feeling the impact US consumers have increased their expenditure on Hotel products consistently during the review period and the sector share of the total US travel market has also increased. The value of the US Hotel market reached an estimated US$87,958 million in 2008, up 5.6% from 2007, but a 3.4% decline is expected for 2009. Growth is higher in the outbound market in comparison to the domestic market for all years under review except 2008 and 2009. Canadian domestic Hotel market took a bigger hit in 2008 The Canadian Hotel market accounts for about quarter of Canadian travel market. The market valued reached an estimated US$9,793 million in 2008 (CAD$10,285 million). This represents a 2.5% decline from 2007 but growth is expected to return in 2009 at 1.8%. The Hotel market is divided fairly evenly between the domestic and outbound Hotel segments (outbound was around 52% in 2008). The decline of the Hotel market in 2008 included a larger decline for the domestic segment. North American consumers buy more and more Hotel products online Online penetration rates of the Hotel market are slightly below the Airline sector, but relative to all other Travel sectors, the online Hotel market has performed very well. The growing confidence of North American consumers is clearly reflected in the figures. Growth of the online Hotel market has been at a 25.3% CAGR (2002-2007) and although it is expected to slow we forecast double digit rates. Whilst the online Hotel market is predicted to be impacted by economic pressures and forecast to record the lowest actual growth rate in the review period in 2009 (annual growth of 3.7%) we do continue to see growth. By 2010 growth is expected to return to a healthy level of 14.8% and maintained above 13% for the following 2 years. Largest plunge yet for the offline US Hotel market (-9%) expected in 2009 The expansion of online hotel market been impressive in the US market. The offline Hotel market is expected to take a large plunge in 2009. Growth is accounted for by online channels and although growth online is expected to slow from previous years, a 3.5% annual increase is predicted nonetheless. Online channels increasingly vital in any Hotel distribution strategy targeting the region but maintaining the efficiency and integration of both channels remains important Growth in online expenditure has been double the growth of offline channels. The Hotel market is a significant sector online, accounting for around one third of the total North American online travel market. Outbound Hotels have performed particularly well in recent years and in 2008 made up around 27% of the total online Hotel market. 14 © EyeforTravel Research. All rights reserved.
  11. 11. Executive Summary North America Online Travel Report 2009 Online/Offline gap for US Hotel market forecast to close by 2010 In 2008, 44.6% of the total expenditure by US travellers on Hotel products was online. This equated to a value of US$39,268 million, an increase of 13.7% from 2007. In 2010 we forecast the online penetration to exceed the 50% mark. It is very clear from the data that growth online has well exceeded growth offline. During 2002-2007 the offline market edged up at a 2.7% CAGR when the online market grew at a 24% CAGR. In the 2007-2012 review period, all growth is expected to be online as offline is predicted to experience a -2% CAGR. Canadian online Hotel market growing faster than the US – but sizes very different The Online Canadian Hotel market has grown relatively faster than the US but understandably values are very different due to the sheer size of the US market. The US online Hotel market was valued at an estimated US$39,268 million in 2008 and Canada US$3,563 million (CAD $3,742 million). Actual growth rates are expected to be higher for Canada. Online penetration soars in the Canadian Hotel market The online penetration in the Canadian Hotel market has continuously increased. In 2008 penetration reached 36.3%, a significant shift from 10% in 2002. During 2002-2007 the offline market displayed basically stagnant growth rates with a 0% CAGR and against this the online market grew at a 32.5% CAGR. In 2008 the only decline was accounted for by the offline channels with an 8.4% fall in value when the online market increased in value by almost 10%. Further decreases in the value of the offline market are expected. Online penetration rates are similar in the domestic and outbound segments, just slightly higher for the domestic market but values are almost equal. Positive growth is expected throughout 2009 and forecast annual growth of 13% for both segments. US outbound online Hotel market has grown five times the size during the 5 years to 2008 The US outbound online Hotel market has grown faster than the domestic market. The cross over point between online/offline distribution will arrive sooner for the outbound segment (in 2009) and this is particularly interesting having started at lower levels than the domestic market. Rapid growth has led to an expected 50.2% online penetration in 2009. The domestic market is forecast to catch up in 2010. Higher overall average growth is also expected for the outbound segment going forward, except 2009 when a decline of 4.3% expected. The domestic market has, however, not been static and has expanded to three times the size. OTAs lose share of the US Hotel market but gain good value US travel consumers make relatively good use of OTAs when purchasing Hotel products. In 2008 43% of expenditure was Indirect. The OTA share of the Hotel market has declined 15 © EyeforTravel Research. All rights reserved.
  12. 12. Executive Summary with Direct to consumer distribution strengthening, but OTAs are expected to hold a pretty good share. The value of Direct distribution grew at a 29.8% CAGR (2002-2007) and Indirect distribution grew at an 18.3% CAGR. Although OTAs have lost market share, their value has increased enormously, particularly for the outbound segment. Clear move towards Direct Hotel channels by Canadian consumers OTAs had good hold in the Canadian market in 2002 at around 54%. In 2008 there has been a shift in online distribution and 65% of expenditure went via Direct channels. The value of expenditure via Direct channels grew at a significant 41.7% CAGR (2002-2007) and although OTAs are losing market share the value of the Indirect market grew at a notable 22.8% CAGR as well. OTAs have held their share better in the outbound product segment. 16 © EyeforTravel Research. All rights reserved.

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