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U.S. Online Travel Overview Report Thirteenth Edition
Report | Published: November 2013
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  • Summary
  • Contents
  • Methodology

Publication Summary

PhoCusWright's U.S. Online Travel Overview Thirteenth Edition is a comprehensive analysis of the U.S. travel industry, providing market sizing and growth forecasts through 2015. 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. The report also features mobile market sizing and forecasts, providing rich insight into the growing influence of smartphones and tablets. This comprehensive research provides a detailed overview of travel distribution in the U.S., with analysis of 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 2015, including breakouts for air, car, hotel, tour operators, rail and OTAs
  • Mobile travel sizing for all segments
  • Distribution patterns and projections by segment and channel
  • In-depth analysis of air, hotel, car rental, vacation packaging 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. U.S. Online Travel Overview Thirteenth 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

Section 1
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
Online Segment Share
Online Penetration by Segment
Supplier Websites vs. OTAs
Mobile
Key Findings
Purpose of the Report
Methodology

Section 2
Online Travel Agencies: No One Is Safe

Key Findings
Overview
A Note on Methodology
Size of the Market
Amid Air's Slide, Hotels Rise
Supplier Sites Inch Ahead
A War Rages, on Multiple Fronts
Overseas Rules
The Mobile Mandate
Meta Ascension
The Conversion Imperative

Section 3
Airlines: The Art of the Upsell

Key Findings
Overview
Size of the Market
OTAs vs. Supplier Websites
Bundles of Joy
Metaverse: Contracting Before it Expands?
The Rest Are Restless
Mobile
NDC: Wait and See

Section 4
Hotel and Lodging: Staying the Course Amid Growing Complexity

Key Findings
Overview
Size of the Market
OTAs vs. Supplier Websites
The Lure of OTAs
Demographic Shifts
Websites are the Hubs
Distribution Channel Mix: More Clicks, Fewer Calls
Trends: Mobile Bookings Take Hold
Social Media=User Reviews

Section 5
Car Rental: Bumps in the Road

Key Findings
Overview
Size of the Market
OTAs vs. Branded Sites
Prepaid Rates
Mobile
Driving Disruption

Section 6
Packaged Travel: Straining to Succeed

Key Findings
Package Definitions
Overview
Size of the Market
Online Packagers vs. Tour Operator Websites
Travel Agent Distribution

Section 7
Cruise: Recovery on the Horizon

Key Findings
Overview
Size of the Market
OTAs vs. Supplier Websites
Travel Agents: Who Needs Whom?
The Airfare Conundrum
Mobile
Reviews and Social Media


LIST OF CHARTS

Annual Household Travel Spend, Trip Incidence and Frequency, 2011 vs. 2012

Websites Used for Shopping

Total U.S. Travel Market, 2008-2015

Total U.S. Travel Market, 2008-2015, Year-Over-Year Change

Total U.S. Travel Market by Segment, 2012

General Travel Booking Channel

Total U.S. Travel Market by Channel, 2012 and 2015

U.S. Travel Market, Year-Over-Year Channel Change, 2011-2015

U.S. Online Leisure/Unmanaged Business Travel Market, Year-Over-Year Change, 2011-2015

Online vs. Total Travel Market Year-Over-Year Growth Rates, 2011-2015

U.S. Travel Market, Year-Over-Year Channel Change, 2011-2015

Online Travel Penetration of the Total Travel Market, Global Markets, 2011-2015

U.S. Online Leisure/Unmanaged Business Travel Market by Segment, 2012 and 2015

U.S. Online Leisure/Unmanaged Business Travel Market by Segment, 2011-2015

Online Leisure Unmanaged Business Growth Rates by Segment, 2012 and 2013

U.S. Online Leisure/Unmanaged Business Travel as Percentage of Total Travel Market: Online Penetration by Segment, 2011-2015

U.S. Online and Total Leisure/Unmanaged Business Travel Gross Bookings, Growth Rates and Online Penetration, 2011-2015

Online Travel Market Share: Supplier Websites vs. OTAs, 2011-2015

Online Travel Market Share: Supplier Websites vs. OTAs, 2012 and 2015

Channel Market Share of Online Revenue by Segment, 2011-2015oo

U.S. Online Leisure/Unmanaged Business Travel Market by Channel, 2011-2015

Mobile Travel Gross Bookings, Share of Total and Online Travel Market and Annual Change, 2011-2015

Mobile as a Share of Online Supplier-Direct Bookings by Segment, 2012

U.S. OTA Domestic Gross Bookings by Segment, 2011-2015

Typical Purchase Methods, Airline Ticket

Expedia's New Search Results Display for Flights

Segment Share of U.S. Domestic OTA Gross Bookings, 2011-2015

Online Packaging Gross Bookings and Share of Total OTA Market, 2011-2015

U.S. Supplier and OTA Share of Online Leisure/Unmanaged Business Travel Gross Bookings, 2011-2015

U.S. Supplier and OTA Share of Total Market, 2011-2015

U.S. Public OTA Domestic Gross Bookings Annual Change, 1Q12-2Q13

U.S. OTAs Market Share, 2012

U.S. Public OTA Gross Bookings and Annual Change, U.S. and International, 1H13

OTA Mobile Gross Bookings, Share of OTA Website Bookings and Annual Change, 2011-2015

Websites Used for Shopping

U.S. Airline Internet Leisure/ Unmanaged Business Gross Bookings, 2011-2015

Revenue and Traffic Growth, 2009-2013

Reported Airline Ancillary Revenue and Share of Total Scheduled Passenger Revenue, 2007-2012

Typical Purchase Methods, Airline Tickets

Airline Website and OTA Share of Internet Air Gross Bookings, 2012 and 2015

Annual Growth in Ancillary Purchases Among U.S. Air Travelers

Fare Display on American Airlines

Fare Display on Expedia

Websites Used for Shopping by U.S. Travelers, 2010 vs. 2012

Search Display on Metasearch Engines Routehappy and Hipmunk

Airline Mobile Gross Bookings, Share of Airline Website Bookings and Annual Change, 2011-2015

Hotel ADR vs. U.S. GDP, Annual Growth, 2010-2014

U.S. Hotel vs. Economic Annual Growth Metrics, 2013

U.S. Hotel and Lodging Online Leisure/Unmanaged Business Gross Bookings, 2011-2015

U.S. Hotel and Lodging Online Gross Bookings Share by Channel 2011-2015

Typical Purchase Methods for Lodging, by Age

Best Western Promotes Its Phone Number - and a Deal - on TripAdvisor

Cross-Brand Shopping on IHG.com

Starwood Brands Solicit and Share Guest Reviews

Estimated Distribution of U.S. Hotel Room Revenue, 2012 and 2015

Hotel Mobile Gross Bookings, Share of Hotel Website Bookings and Annual Change, 2011-2015

U.S. Car Rental Industry Mergers, 2006-2012

U.S. Car Rental Internet Leisure/Unmanaged Business Travel Gross Bookings, 2011-2015

U.S. Car Rental Mobile Leisure/Unmanaged Business Travel Gross Bookings, 2011-2015

U.S. Packaged Travel Online Leisure/Unmanaged Business Gross Bookings, 2011-2015

Travel Component Purchase Incidence

Online Packaging Gross Bookings by Channel, 2013

TVP Gross Bookings by Channel, 2012 and 2015

Total Packaged Travel Gross Bookings by Channel, 2013

U.S. Cruise Line Online Leisure/Unmanaged Business Gross Bookings, 2011-2015

Cruise Booking Channel Share, 2012 and 2015

Supplier vs. OTA Share of Online Cruise Revenue, 2009-2015

Travel Agent Share of Cruise Bookings

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 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 2011-2012 are based on actual company results. Projections for 2013-2015 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.

PhoCusWright has changed its methodology for calculating OTA gross bookings beginning with this thirteenth edition of the U.S. Online Travel Overview. In 2012 and beyond, hotel OTA sales include estimates and projections for U.S. sales of Priceline's Booking.com unit, rather than following Priceline's financial filing reporting lines, which place Booking.com gross bookings in its international gross bookings. Another methodology change involves Expedia. To better reflect leisure/unmanaged business travel bookings, corporate bookings from its Egencia unit are now excluded from Expedia's U.S. OTA figures. For more on these changes, see the Online Travel Agencies section of this report.

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 25-29, 2013, 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 2,520 qualified responses, and the weighted respondent pool can be projected with confidence to the U.S. adult population with Internet access. A total of 4,839 respondents were surveyed to obtain baseline metrics about travelers and non-travel\302\254ers within the general online population. The error interval for analysis of the U.S. traveler population is +/-2.0% at a 95% confidence level. Significant differences noted in this report were identified at a 95% confidence level.