U.S. Online Travel Overview Thirteenth Edition

U.S. Online Travel Overview  Thirteenth Edition Published November 2013 Analysts: Douglas Quinby, Mary Pat Sullivan, Lorraine Sileo, Maggie Rauch


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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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  • Size and Structure of the U.S. Online Travel Market
    • Size of the Market
    • Composition of the U.S. Travel Market
      • Segment Share
    • 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
      • Market Size and Forecasts
      • Consumer Travel and Behavioral Information
  • 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’s Ascension
    • The Conversion Imperative
  • 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
  • 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
      • Pay Now or Pay Later
      • Search Eats up Marketing Spend
      • Social = User Reviews
  • Car Rental: Bumps in the Road
    • Key Findings
    • Overview
    • Size of the Market
    • OTAs vs. Branded Sites
    • Prepaid Rates
    • Mobile
    • Driving Disruption
  • Packaged Travel: Straining to Succeed
    • Key Findings
    • Package Definitions
    • Overview
    • Size of the Market
    • Online Packagers vs. Tour Operator Websites
    • Travel Agent Distribution
  • 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

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¬ers 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.

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