U.S. Online Travel Overview Fourteenth Edition: Airlines

U.S. Online Travel Overview  Fourteenth Edition: Airlines Published December 2014 Analyst: Maggie Rauch

 

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The U.S. airline industry saw modest, sustained growth of 5% a year from 2013 through 2015, thanks to capacity control, continued consolidation and corporate travel. Falling jet fuel costs and tightly managed available seat miles meant boosted bottom lines for airlines – as they didn't let these factors affect ticket pricing. Business travel is the most important trend to the U.S. air segment; as the demand holds steady, airlines are mastering the art of capacity management and ancillary upsells, maximizing the dollars they extract from their corporate travelers. Airlines use mobile tools to increase customer service – easing the process with delay alerts and enabling upsells of preferred seating and checked baggage.

Phocuswright's U.S. Online Travel Overview Fourteenth Edition: Airlines provides an in-depth look at the current state of the airline market and projects future performance, with market sizing and forecasting through 2015.

U.S. Travel Market Overview
To put the airline-specific trends in perspective, this report includes a comprehensive overview of the total U.S. travel market. The robust overview chapter includes market sizing and projections for the U.S. travel market through 2016, including breakouts for key online and offline distribution channels and all major travel segments – airlines, hotels, car rental, cruises, tour operators and rail. provides a detailed overview of travel distribution in the U.S., with analysis of trends in market share, technological innovation and consumer behavior.

Purchase Phocuswright’s U.S. Online Travel Overview Fourteenth Edition: Airlines for a comprehensive view of this growing, constantly evolving segment.

37 Pages

Section One
Size and Structure of the U.S. Online Travel Market

Overview
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 Two
Airlines: Carriers in Control

Key Findings
Overview
Size of the Market
A Little Lift for LCCs
Modest Gains for OTAs, but Airlines Are in Charge
Mobile: Waiting at the Gate
Social Media

LIST OF TABLES

Overview
Annual Household Travel Spend, Trip Incidence and Frequency, 2012 vs. 2013

Sources of Information Used in Shopping Phase, 2012 vs. 2013

Total U.S. Travel Market, 2009-2016

Total U.S. Travel Market, 2009-2016, Year-Over-Year Change

Total U.S. Travel Market by Segment, 2013

General Travel Booking Channel, 2012 vs. 2013

Total U.S. Travel Market by Channel, 2013 and 2016

U.S. Travel Market, Year-Over-Year Channel Change, 2012-2016

U.S. Online Leisure/Unmanaged Business Travel Market, Year-Over-Year Change, 2012-2016

Online vs. Total Travel Market Year-Over-Year Growth Rates, 2012-2016

U.S. Travel Market, Year-Over-Year Channel Change, 2012-2016

Online Travel Penetration of the Total Travel Market, Global Markets, 2011-2016

U.S. Online Leisure/Unmanaged Business Travel Market by Segment, 2013 and 2016

U.S. Online Leisure/Unmanaged Business Travel Market by Segment, 2012-2016

Online Leisure/Unmanaged Business Growth Rates by Segment, 2013 and 2014

U.S. Online Leisure/Unmanaged Business Travel as Percentage of Total Travel Market: Online Penetration by Segment, 2012-2016

U.S. Online and Total Leisure/Unmanaged Business Travel Gross Bookings and Growth Rates and Total Online Penetration, 2012-2016

Online Travel Market Share: Supplier Websites vs. OTAs, 2012-2016

Online Travel Market Share: Supplier Websites vs. OTAs, 2013 and 2016

Channel Market Share of Online Revenue by Segment, 2012-2016

U.S. Online Leisure/Unmanaged Business Travel Market by Channel, 2012-2016

Mobile Travel Gross Bookings, Share of Total and Online Travel Market and Annual Change, 2012-2016

Online Travel Market Share: Supplier Websites vs. OTAs, 2012-2016

Airlines
Revenue Passenger Enplanements vs. Passenger Revenue Growth, 2009-2013

U.S. Airline Online Leisure/Unmanaged Business Gross Bookings, 2012-2016

Airline Website and OTA Share of Internet Air Gross Bookings, 2013 and 2016

U.S. Airline Ancillary Sales and Share of Passenger Revenue, 2009-2013

Airline Mobile Gross Bookings, Share of Airline Website Bookings and Annual Change, 2012-2016

Sources of Information Used in Shopping Phase

Hotels & Lodging
Hotel ADR vs. U.S. GDP, Annual Growth, 2010-2015

U.S. Hotel vs. Economic Annual Growth Metrics

U.S. Hotel & Lodging Internet Leisure/Unmanaged Business Gross Bookings, 2012-2016

U.S. Hotel & Lodging Online Gross Bookings Share by Channel, 2013 and 2016

Typical Purchase Methods, Lodging

Ad Spend by U.S. Hotels, Share by Channel, 2011-2015

Marriott's Mobile Check-in


TripAdvisor's Instant Booking Takes a Hotel Reservation

Estimated Distribution of U.S. Hotel Room Revenue, 2013 and 2016


Hotel Mobile Gross Bookings, Share of Hotel Website Bookings and Annual Change, 2012-2016

Hilton HHonors App

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 travel policies dictating the channels, types of travel, suppliers or fares/rates used. Corporate online booking systems such as Concur Technologies and Sabre Holdings' 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 2012-2013 are based on actual company results. Projections for 2014-2016 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 on passenger ticket revenue.

Where possible, travel that is researched online but booked offline using toll-free telephone numbers provided on websites is 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 changed its methodology for calculating OTA gross bookings beginning with the thirteenth edition of the U.S. Online Travel Overview. In 2012 and beyond, hotel OTA sales will 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 between February 28 and March 6, 2014, through Global Market Insite, Inc., targeting members of the general U.S. adult population who have Internet access and travel 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 active roles 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, other nightly priced lodging products, timeshares and vacation rentals.

Phocuswright received 1,850 qualified responses. The weighted respondent pool can be projected with confidence to the U.S. adult population with Internet access. A total of 4,138 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 ±2.3% at a 95% confidence level.

Based on data from the U.S. Census Bureau and Pew Research Center, Phocuswright projects the number of U.S. adults with Internet access who took at least one leisure trip (as previously defined) in 2013 to be 127 million people (see Figure 1.1). These travelers represent 54% of the total U.S. adult population. The additional requirement for respondents to have played active roles in travel planning further tightens the study's focus, as 19% of travelers were consequently disqualified. Phocuswright's U.S. Consumer Travel Report Sixth Edition examines travelers who played active roles in planning their trips.

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CA $1,580 • £880 • €1,009
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