Hospitality Market Research

Online Traveler Population on Upswing

Over the past year, according to the hospitality industry report, consumer confidence in the economy has fallen dramatically (March 2007: 92.3; March 2008: 33.1) with the toll of the ailing housing market, record-high energy prices and credit crunch (source: RBC Cash Index). While this has made it more challenging for Americans to secure financing for big-ticket purchases such as homes and cars, travel has been, to date, marginally impacted. In fact, the U.S. market is experiencing travel growth as a result of an increase in inbound travel due to the devaluation of the U.S. dollar.

However, like all Americans, the U.S. online traveler remains cautiously optimistic about the economy because of radical stock market swings over the past six to nine months, increasing fuel costs, the volatility of the banking/investment/ mortgage community, the continuing war in Iraq and the uncertainty associated with an election year. But these economic factors have not, as of yet, deflated online traveler penetration. Nearly one in four U.S. adults (24%) was an “online traveler” in 2007 (see Table 1). This penetration is up over 2006 and due primarily to the increase in the adult population. So, even though the economy is slowing, U.S. online travelers have not stopped traveling – according to the hospitality industry report: but they’ve altered how they travel and are making trade-offs in terms of the type of trips taken, the amount of time spent vacationing and/or the type of components (i.e., hotel) purchased.

Hospitality Industry Report

To calculate the number and percentage of “online travelers,” PhoCusWright multiplied the number of adult Americans (227.5 million, Source: U.S. Census Bureau) by the percentage of respondents who indicated they had flown by commercial air in the past year (32%), and by the percentage of respondents who had stayed in a hotel for leisure travel in the past year (82%). This translates to 59 million adult Americans. Of these, 92% have also used the Internet in the past month. This figure in the hospitality industry report (55 million adults, or 24% of the U.S. adult population) equates to the number of “online travelers” in the U.S. in 2007.