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U.S. Online Travel Overview Twelfth Edition
Report | Published: November 2012
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  • Summary
  • Contents
  • Methodology

Publication Summary

The U.S. travel market remained resilient in 2012, despite ongoing economic malaise and a weak recovery. The year was marked by slow growth of gross domestic product (GDP), high unemployment, a feeble housing market and declines in household income. Yet travelers persevered, taking vacations and business trips despite the economy. Aided by rising prices and corporate travel demand, the total U.S. travel market reached new highs, with the online leisure/unmanaged business travel market sustaining double-digit growth. The outlook for 2013 remains guarded, as the U.S. fiscal cliff, European debt crisis and a slowing China economy fuel continued economic uncertainty.

PhoCusWright's U.S. Online Travel Overview Twelfth Edition is a comprehensive analysis of the U.S. travel industry, providing market sizing and growth forecasts through 2014. The report focuses on the U.S. online leisure/unmanaged business travel marketplace, highlighting marketing and distribution trends for all travel segments including air, hotel, car rental, vacation packaging, rail and cruise. It tracks distribution shifts among supplier websites and online travel agencies, as well as major offline channels. For the first time, the report also includes mobile market sizing and forecasts. This comprehensive research provides a detailed overview of travel distribution in the U.S., with rich insight into trends in market share, technological innovation and consumer behavior.

Topics include:

  • Size of the U.S. total and online travel markets
  • Market sizing and forecasts through 2014, including breakouts for air, car, hotel, tour, rail and OTAs
  • Mobile travel sizing and forecasts
  • Distribution patterns by segment and channel
  • In-depth analysis of air, hotel, car rental, vacation packaging, rail and cruise segments
  • Consumer and technology trends influencing travel marketing and distribution
  • Impact of macroeconomic changes
PhoCusWright has followed the evolution of online travel purchasing from its inception. PhoCusWright's U.S. Online Travel Overview Twelfth Edition is the industry standard for sizing and forecasting, providing actionable insights into the U.S. travel market.

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Table of Contents

78 Pages

Section One – Size and Structure of the U.S. Online Travel Market
Size of the Market
Composition of the U.S. Travel Market
U.S. Travel Market – Channel Shift
Online Travel Outlook
Segment Share
Online Penetration by Segment
Supplier Websites vs. OTAs
The Plight of OTAs
Taking Aim at Mobile
Key Findings
Purpose of the Report
Methodology

Section Two – Online Travel Agencies: Settling Into Maturity
Key Findings
Overview
Size of the Market
Packaging Declines
OTAs vs. Supplier Websites
The Only Way to Grow Is to Steal Share
Conversion, Conversion, Conversion
International Markets Cool Off
Mobile: Now We're Booking with Gas
Other OTA Trends

Section Three – Airlines: Mercy Is for the Weak
Key Findings
Overview
Size of the Market
OTAs vs. Supplier Websites
Ancillaries and Direct Connects: Time to Make Nice?
Mobile's Amazing Ascent
Google-ITA Flight Search: Still Not Much … Yet
Matrix Unloaded

Section Four – Hotel and Lodging: Solid Performance Defies Economy
Key Findings
Overview
Size of the Market
OTAs vs. Supplier Websites
Distribution Channel Mix: Websites Gain
Mobile: Small but Significant
Social Networks: An Ongoing Experiment
Marketing: Google and TripAdvisor Take More Out of Budgets
Room Key Shakes Things Up

Section Five – Car Rental: Speeding Up, but Still in Low Gear
Key Findings
Overview
Size of the Market
OTAs vs. Branded Sites
Mobile
Fleet Management
Other Car Rental Trends

Section Six – Packaged Travel: The Slow Slide Continues
Key Findings
Package Definitions
Overview
Size of the Market
Online Packagers vs. Tour Operator Websites
Travel Agent Distribution

Section Seven – Cruises: Online, Direct Channels Pulling Away
Key Findings
Overview
Size of the Market
OTAs vs. Branded Websites: Suppliers to the Fore
Come On In, the Water's Fine: Reaching First-Timers With Social Media
Mobile: All Onboard

LIST OF TABLES

Travel Spend as a Percent of Income (Market Share)

Websites Used for Shopping

Total U.S. Travel Market 2007-2014

Total U.S. Travel Market, Year-Over-Year Change, 2007-2014

Total U.S. Travel Market by Segment, 2011

General Travel Booking Channel

Total U.S. Travel Market by Channel, 2011 and 2014

U.S. Travel Market, Year-Over-Year Channel Change, 2010-2014

U.S. Online Leisure/Unmanaged Business Travel Market (US$B), Year-Over-Year Change(%), 2010-2014

Online vs. Total Travel Market, Year-Over-Year Growth Rates(%), 2010-2014

U.S. Travel Market, Year-Over-Year Channel, 200-2014

Online Travel Penetration* of the Total Travel Market. Global Markets, 2010-2014

U.S. Online Leisure/Unmanaged Business Travel Market by Segment, 2011 and 2014

U.S. Online Leisure/Unmanaged Business Travel Market by Segment, (US$M), 2011 and 2014

U.S. Online Leisure/Unmanaged Business Travel Growth Rates(%) by Segment, 2011 and 2012

U.S. Online Leisure/Unmanaged Business Travel as Percentage of Total Travel Market: Online Penetration by Segment, 2010-2014

U.S. Online Leisure/Unmanaged Business Travel Gross Bookings, (US$M), Growth Rates and Online Penetration, 2010-2014

Online Travel Market Share: Supplier Websites vs. OTAs, 2010-2014

Online Travel Market Share: Supplier Websites vs. OTAs, 2010 and 2014

Channel Market Share(%) of Online Revenue by Segment, 2010-2014

Purchase Methods by Age

U.S. Online Leisure/Unmanaged Business Travel Market by Channel (US$M), 2010-2014

Mobile Travel Gross Bookings (US$M), Share of Total and Online Travel Market and Annual Change, 2010-2014

U.S. OTA Domestic Gross Bookings by Segment (US$M, 2010-2014

Segment Share of U.S. Domestic OTA Gross Bookings, 2010-2014

Online Packaging Gross Bookings and Share of Total OTA Market (US$M), 2010-2014

Segment Share of U.S Domestic OTA Gross Bookings, 2010-2014

U.S Supplier and OTA Share of Total Market (US$M), 2010-2014

Top OTA Domestic Bookings, Year-Over-Year Growth, 1Q11-2Q12

Top Four OTAs U.S Market Share, 2011 and 1H12

Top Four OTAs U.S Market Share, 2011 and 1H12

OTA Mobile Gross Bookings, Share of Online Travel Agency Website Bookings and Annual Change (US$M), 2010-2014

U.S Airline Internet Leisure/Unmanaged Business Gross Bookings, 2010-2014 (US$M)

Annual Change in Revenue Passenger Enplanements and Passenger Revenue for U.S. Airlines, 2008-2011 and 1H12

Reported Airline Ancillary Revenue and Share of Total Scheduled Passenger Revenue (US$M), 2006-2011

Airline Website and OTA Share of Internet Air Gross Bookings, 2011 and 2014

American Airlines Preferred Seat Offer on Priceline

Delta.com's Search Result and Trip Summary Pages, With Upsells

Airline Mobile Gross Bookings, Share of Airline Website Bookings and Annual Change (US$M), 2010-2014

Hotel ADR vs. U.S. GDP, Annual Growth, 2009-2013

U.S. Economic and Hotel Growth Metrics, 2012 (Forecast) vs. 2011

U.S. Hotel & Lodging Internet Leisure/Unmanaged Business Gross Bookings (US$M), 2010-2014

Wyndham Provides Cross-Brand Shopping with an OTA Look and Feel

U.S. Hotel & Lodging Online Gross Bookings Share by Channel, 2011 and 2014

U.S. Hotel & Lodging Online Gross Bookings Share by Channel, 2011 and 2014

Hotel Mobile Gross Bookings, Share of Hotel Website Bookings and Annual Change (US$M)

U.S. Car Rental Internet Leisure/Unmanaged Business Gross Bookings, 2010-2014

U.S. Car Rental Online Gross Bookings Share by Channel, 2011 and 2014

U.S. Car Rental Mobile Leisure/Unmanaged Business Gross Bookings (US$M), 2010-2014

Travel Component Purchase Incidence, 2009-2011

U.S. Packaged Travel Internet Leisure/Unmanaged Business Gross Bookings (US$M), 2010-2014

Total Packaged Travel Market by Channel, 2010 & 2014

Travel Agent Booking Breakout, 2010 & 2014

U.S. Cruise Line Online Leisure/Unmanaged Business Gross Bookings (US$M), 2010-2014

Cruise Booking Channel Share, 2011 and 2014

Monthly Unique Visitors to Top 10 Cruise Line Websites, November 2010-August 2012

Monthly Unique Visitors to Cruise Line Websites, November 2010-August 2012

Cruise Suppliers Experiment with Social Media and User Reviews

Methodology

Market Size and Forecasts

PhoCusWright has been tracking the financial results of the online travel industry since 1998. This report's estimates and forecasts cover U.S.- based travel businesses, including travel suppliers (airlines, hotels, car rental companies, packagers, railways and cruise lines) and online travel agencies. The total market size includes sales of non-U.S. travel suppliers transacted via U.S.-based online travel agencies. All figures are in U.S. dollars unless otherwise stated.

Both leisure and unmanaged business travel services are included in the online travel market size and forecast figures. Unless otherwise indicated, all online gross bookings and share figures refer to leisure/unmanaged business travel. Unmanaged business travel refers to all air, car and hotel expenses associated with business travel in firms that do not have a travel policy dictating the channel, type of travel, supplier or fare/rate uses. Corporate online booking systems such as Concur and Sabre/GetThere are excluded from this analysis.

PhoCusWright builds its estimates and forecasts from discussions with more than 80 travel executives regarding their companies' Internet sales, marketing and technology investments, challenges, strategies and expectations. Their responses have been vetted and aggregated to determine market size for supplier websites and online travel agencies. PhoCusWright also reviewed data from Securities and Exchange Commission documents, company reports, and select third-party data sources.

Figures for 2010-2011 are based on actual company results. Projections for 2012-2014 are based on company interviews, consumer research and market developments. PhoCusWright also considers historical growth and economic trends when developing its forecasts. Estimates and projections are for gross bookings – the retail value of travel sold over the Internet – after cancellations. Figures for airlines are based on flown (passenger) revenue. Hotel figures are based on room revenue. Figures for car rental are based on domestic U.S. revenues, excluding insurance replacement revenue. Figures for cruise lines and tour operators are based on U.S. outbound passenger revenue. Figures for rail are based upon passenger ticket revenue.

Where possible, travel that is researched online but booked offline using a toll-free telephone number provided on the website are excluded from online gross bookings figures. Total travel figures (online and offline) are used to determine Internet penetration for each market segment. Total travel figures are either derived from third-party sources or are PhoCusWright estimates.

Note that figures listed in tables do not always add precisely to column totals due to rounding.

Consumer Travel and Behavioral Information

PhoCusWright fielded an online consumer survey January 13-23, 2012, through Global Market Insite, Inc., targeting the general U.S. adult population that has Internet access and travels for leisure.

To qualify for participation in the study, respondents had to indicate they had taken at least one leisure trip at least 75 miles from home in the past 12 months that included paid lodging and/or air travel. An additional screener required consumers to have played an active role in planning their leisure trips. Respondents who qualified are referred to as "U.S. travelers." The term "lodging" is used in this report to refer to the broad range of paid accommodations, including hotels and other nightly priced lodging products, as well as timeshares and vacation rentals.

PhoCusWright received 2,036 qualified responses, and the weighted respondent pool can be projected with confidence to the U.S. adult population with Internet access. A total of 4,915 respondents were surveyed to obtain baseline metrics about travelers and non-travelers within the general online population. The error interval for analysis of the U.S. traveler population is +/-2.19% at a 95% confidence level. Significant differences noted in this report were identified at a 95% confidence level.