US $2,495.00
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The PhoCusWright Consumer Travel Trends Survey Ninth Edition
May 2007
US $2,495 CA $2,671 £1599 €1824
This new edition of PhoCusWright's ongoing consumer research, The PhoCusWright Consumer Travel Trends Survey Ninth Edition, reveals a travel market that is driven by habitual and seasoned users skilled in switching between channels (online/offline, direct/intermediary) in order to serve their changing needs. Not only price, but trip convenience, selection and brand loyalty are influencing travel decisions, creating complex behavior patterns. To better understand your customer, read The PhoCusWright Consumer Travel Trends Survey Ninth Edition.
Report Overview
Table of Contents
Methodology
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Overview
For the past nine years, PhoCusWright Inc. has conducted a nationally representative Consumer Travel Trends Survey among U.S. online travelers to ascertain data on travel shopping and purchase behavior. Commencing in 2002, this research was constructed as an Omnibus study to afford client companies the opportunity to investigate and quantify pertinent issues relevant to their own businesses without commissioning a nationwide study of their own.
In addition to understanding the dynamics of the online traveler, PhoCusWright also probed the travel buying behavior of frequent business travelers and the air-only online traveler. This report is one in a series of publications that highlight the findings from this research initiative.
Definitions
The following terms are referenced within this document and are defined as follows:
ONLINE TRAVELER is defined as a U.S. adult who has taken a commercial air trip in the past year, stayed at a hotel in the past year and used the Internet in the past 30 days.
ONLINE TRAVEL SHOPPER is an online traveler who has shopped for travel online in the past year.
USUAL ONLINE SHOPPER is an online traveler who typically (though not exclusively) shopped for travel online in the past. This segment is also referred to as “usual online travel shopper” within the report.
ONLINE TRAVEL BUYER is an online traveler who purchased at least one travel component (e.g., air, hotel, package) online in the past year.
FREQUENT BUSINESS TRAVELER refers to an online traveler who takes three or more business trips by commercial air in a year.
VACATION TRAVELER refers to an online traveler who has taken one or more vacations of approximately one or more weeks in length in the past year.
Online Traveler Population
Increased Internet Usage and Hotel Stays Drive U.S. Online Traveler Population
Almost one out of four U.S. adults (23%) were “online travelers” in 2006. This penetration is down slightly from 2005 levels (24%) due to a slip in the volume of air travel among consumers in 2006. This drop was offset by increases in hotel usage for leisure travel and Internet usage overall. While the pace of Internet usage growth is slowing as the market matures, penetration continues to increase as the Web becomes more integral to consumers for travel information, purchasing, socialization and entertainment. In fact, 92% of American travelers have used the Internet in the last month. In addition, hotel usage among air travelers rose from 81% to 84% from 2005 to 2006. This growth, combined with lower air travel and the higher cost of fuel, underscores Americans’ increased use of shorter trips, hybrid (leisure + business) vacationing and use of their own or rental cars for leisure travel.
To calculate the number and percentage of “online travelers,” PhoCusWright multiplied the number of adult Americans (225 million) by the percentage of respondents who indicated they had flown by commercial air in the past year (32%), and then by the percentage of respondents who had stayed in a hotel for leisure travel in the past year (84%). This translates to 60 million adult Americans. Of these, 92% have also used the Internet in the past month. This figure (55 million adults, or 23% of the U.S. adult population) equates to the number of “online travelers” in the U.S. in 2006.
Seasoned Online Travel Buyers and Customization Drive Leisure Market Growth
Despite the mainstreaming of the Internet for all types of products, services and information, the market for online leisure travel continues to be stimulated by habitual or seasoned online purchasers rather than novice online travel buyers. This is indicated by the fact that the proportion of online travelers “usually” buying travel is nearing the percentage of those who purchase leisure travel online (62% vs. 63%). This is not surprising given the significantly higher cost of new customer acquisition, the market’s focus on driving repeat patronage among existing online travel buyers and the push to drive brand loyalty among shoppers, regardless of the channel used for purchase.
Overview
Methodology Definitions
Strategic Implications
Trends Toward Frequent, Shorter Trips A Boon to Online Travel
Emphasis Shifts from Price to Trip Convenience for Time-Starved Travelers
Complex Customer Needs Still Require Offline Support
Price is the Thing, but Not The Only Thing
Cross-Selling Drives Retention Up & Acquisition Costs Down
Gap in Channels Continues to Widen
Executive Summary of Findings
Increased Internet Usage and Hotel Stays Drive U.S. Online Traveler Population
Seasoned Online Travel Buyers and Customization Drive Leisure Market Growth
Trip Behavior
Available Resources and Fuel Costs Restrict Trip Frequency in 2006
Most Frequent Leisure Travel Segments
Available Time (versus Vacation Time) Redefining Personal Trips
Long Weekend Trips Have Highest Online Purchase Spend
Travel Shopping
Channel Loyalty Dips as Online Traveler Needs Change
Usual Purchase Methods
Search and Dual Purchase Channels Level Playing Field for Suppliers
Suppliers Usurp OTAs as "Usual Method" for Simple omponents
Online Purchasing
Online Growth Driven by Repeat Purchasing of Steady Traveler Base
Economic Conditions Slow Travel Purchasing and Alter Online Frequency
Market & Purchasing Dynamics Causing Shift in Travel Components
Both Online and Offline Channels are Preferred, Regardless of Component Purchased
Switching Behavior
Suppliers Capitalize on “Switch” Behavior
Selection Outpaces Price as Primary Online “Buy” Motivator
Information and Purchase Influencers
Barrage of Online Influences Can Sway Travel Purchase Decisions
Hotel Dynamics
Offline Preferred Method for Hotel Reservations
Online Travel Agencies Most Popular Web Sites for Hotel Buying
Beyond the Basics: Cross Selling Untapped Opportunities
Add-Ons Add Margin
International Travel Opportunities are in Our Own Backyard
Business Travelers Extend Margins Too
Business Travel
Individual Components Dominate Online Business Travel Purchases
Study Demographics
Consumer Travel Trends Survey Questionnaire
LIST OF TABLES
U.S. Online Traveler Incidence
Online Travel Buyer
Incidence of Trips Taken, Past Year
Number of Trips Taken, Past Year
Segments with Highest Frequency of Leisure Trips, Past Year
Type of Leisure Trips Taken, Past Year
Total Amount Spent on Last Trip
Online Share of Last Trip Spend
Total Annual Travel Spend
Characteristics of Long Weekend vs. Vacation Trip Travelers
Characteristics of Long Weekend Travelers, by Incidence of Online Spend
Usual Online Travel Shopping and Purchasing
Mean Frequency of Purchasing Simple vs. Complex Travel Online
Usual Online Travel Shopping and Purchasing Method
Online Travel Purchasing
Usual Shopping and Buying Behavior, by Method
Usual Shopping and Buying Behavior, by Channel
Usual Online Purchase Method, by Travel Component Purchased (2005, 2006)
Online Leisure Travel Purchase Incidence, by Segment
Travel Purchase Incidence, Overall vs. Online
Mean Purchase Frequency, Overall vs. Online
Online Component Incidence & Frequency, by Method Usually Purchased (2006)
Online Travel Purchase Incidence vs. Purchase Frequency (2005)
Channel Loyalty, by Component Purchased
Online Travel Agency (OTA) Shopping vs. Buying Behavior
Supplier Shopping vs. Buying Behavior
Primary Reason for “Switching,” by Purchase Channel
Reason for Purchasing by Other Method than Shopping (2005)
Influence of Web Site Features Where Leisure Travel is Purchased Online
Influence of Market Competitors on What Travel is Purchased Online
Value Perceptions of Different Web Site Types
Hotel Purchasing Method Used, Past Year
“Top 3” Hotel Web Sites (Multiple Mentions)
“Top 3” Hotel Web Sites, by Brand (Multiple Mentions)
“Most Often Used” Hotel Web Site
“Most Often Used” Hotel Web Sites, by Brand
Willingness to Recommend
Add-On Incidence & Frequency, by Online Travel Purchase
International Travel Incidence & Frequency, Overall and by Top Purchase Segments
Past Year Business Trip Frequency, Overall and With Leisure Extension
Typical Accommodations When Business Travel is Extended to a Leisure Trip
Segments Most Likely to be Business Trip Extenders
Incidence of Business Travel, Past Year
Incidence and Frequency of Business Travel, Past Year
“Usual” Method of Business Travel Purchase
Number of Business Travel Purchases Online (2006)
Number of Business Travel Purchases Online (2005)
Demographic Profile of Study Participants
The purpose of
The PhoCusWright Consumer Travel Trends Survey Ninth Edition is to gather information about U.S. “online travelers’” travel shopping and buying behaviors. Online travelers were identified through successive waves of ICR’s EXCEL Omnibus beginning Sept. 27, 2006 and ending Oct. 22, 2006. To qualify for participation in the study, respondents had to indicate if they:
- Had personally taken a trip by commercial airline in the last 12 months;
- Had personally stayed at a hotel for a vacation or any leisure travel in the last 12 months; and
- Had used a computer, either at home or at work, to connect to the Internet in the last month.
Interviewing was conducted from ICR’s centralized telephone center between Oct. 4 and Oct. 22 2006. A total of 500 interviews were conducted via telephone and averaged 22 minutes in length.
Quotas were set based on the percent distribution of males and females in the Northeast, North Central, South and West regions of the country. These percentages are based on the distribution of the population from the Omnibus database development phase. Upon completion of the study, additional demographic characteristics were used to weight the data to more accurately represent the population of "online travelers."
The results were tested for significant differences, which are noted at the 95% level of confidence or higher. The error interval for the sample of 500 is +/- 4.4% at the 95% confidence level.
Within this report, significant differences between key sub-segments are noted by a capitalized letter beside the percentage and footnoted beneath the corresponding table. Each capitalized letter signifies a column where significant differences exist between that column and the other noted columns.
Because of the accelerating growth of the online corporate travel market, PhoCusWright expanded the scope of the Consumer Travel Trends Survey Ninth Edition to report on the travel buying practices of frequent business travelers who are also Web users. To accomplish this and ensure a nationally representative sampling, PhoCusWright supplemented the responses of the frequent business traveler from the telephone study with a Web-based survey among business travelers who met the same criteria. A total of 333 business travelers were surveyed, 230 of which were derived from the email survey and 103 from the telephone survey. These findings will be reported in a forthcoming report titled The PhoCusWright Business Travel Trends Survey Second Edition.
