U.S. Online Travel Overview Sixteenth Edition

U.S. Online Travel Overview Sixteenth Edition Published January 2017 Analysts: Maggie Rauch, Alice Jong, Brandie Wright, Lorraine Sileo


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The U.S. travel sector's return to health slowed somewhat in 2015, and due to geopolitical events the market barely managed to grow at all in 2016. While leisure demand was resilient, weakness in the corporate sector was a significant headwind, especially for airlines. U.S. travelers' desire to explore and to get away is unabated, but how much they will be able to increase their travel spend is unclear. Growth in the 4-5% range is projected through 2020, bringing the total travel market to US$403.3 billion.

Phocuswright's U.S. Online Travel Overview Sixteenth Edition is a comprehensive analysis of the U.S. travel industry, providing market sizing and growth forecasts through 2020. 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. 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 and composition of the U.S. total and online travel markets
  • Market sizing and forecasts through 2020, including breakouts for air, car rental, hotel, tour operators, cruise, rail and online travel agencies (OTAs)
  • Mobile travel sizing for airlines, hotels, car rental and OTAs
  • Distribution patterns and projections by segment and channe
  • In-depth analysis of air, hotel, car rental, vacation packaging and cruise segments
  • Consumer and technology trends influencing travel marketing and distribution

Phocuswright has followed the evolution of online travel purchasing from its inception. U.S. Online Travel Overview Sixteenth Edition is the industry standard for sizing and forecasting, providing actionable insights into the U.S. travel market.

  • Size and Structure of the U.S. Online Travel Market
    • Key Findings
    • Size of the Market
  • Composition of the U.S. Travel Market
    • State of the Segments
      • Airlines
      • Hotels
      • Car Rental
      • Cruise: Uncertain Waters
      • Packaged Travel
  • U.S. Travel Market – Channel Shift
    • Online Travel Outlook
    • Online Segment Share
  • Segment Growth and Online Penetration
    • Airlines Online
    • Hotel Online
    • Cruise Online
    • Online Rail and Packaged Travel
  • Supplier Websites vs. OTAs
    • Suppliers Lead, but OTAs Gain in Air and Car
    • Hotels and HLPA
  • Mobile
  • Purpose of the Report
  • Methodology
    • Market Size and Forecasts
    • Consumer Travel and Behavioral Information
  • Online Travel Agencies: Mobile and Hotel Fuel Insatiable Appetites
    • Key Findings
    • Overview
    • A Note on Methodology
    • Size of the Market
    • OTAs Battle for Hotel Share, Lose to Suppliers on Air
    • OTAs Win on Incidences, Suppliers Win on Gross Bookings
    • More Mobile, More Customers, More of the Time
    • The Non-Traditional Encroach on OTA Territory
    • Interweaving Alternative Accommodations
    • Into the Future with Technology
  • Airlines: A Little Lift for Leisure, but the Corporate Slump Continues
    • Overview and Size of the Market
    • Mobile: Digital Delay
    • OTAs vs Suppliers: A Comeback for Intermediaries
    • Bundles to the Basement
  • Hotel & Lodging: Keeping OTAs at Bay
    • Key Findings
    • Overview
    • Size of the Market
    • Online Sales Triple Pace
    • A Balancing Act
    • Distribution Channel Mix: Offline Still Reigns
    • Trends
      • Book Direct and Save: Skirting Rate Parity
      • The Hotel Debate
      • Hotels Own the Customer – Now What?
      • The Anti-OTAs Emerging
      • Mobile Bookings: Slow and Steady
    • Private Accommodation Rivals Hotels
      • No Denying the Airbnb Effect
      • Private Accommodation Disrupts Distribution Mix
  • Car Rental: Cruising on Solid Ground
    • Key Findings
    • Overview and Size of the Market
    • OTAs Gaining on Branded Sites
    • Mobile’s Slowing Momentum
    • The Race Against New Models

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 business travel. Unmanaged business travel refers to all air, car, hotel and rail 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.

Online gross bookings refer to all sales made via websites or apps regardless of device. Mobile sales specifically cover gross bookings via smartphones and tablets.

Phocuswright builds its estimates and forecasts from discussions with more than 80 travel executives regarding their companies' online sales, marketing and technology investments, challenges, strategies and expectations. Their responses have been vetted and aggregated to determine market size for supplier websites/apps and online travel agencies. Phocuswright also reviewed data from Securities and Exchange Commission documents, company reports and select third-party data sources.

Figures for 2015 and earlier are based on actual company results. Projections for 2016-2020 are based on financial results, 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 through online channels - 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. 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 cited third-party sources or are Phocuswright estimates.

Note that figures listed in tables do not always add precisely to column totals due to rounding.

Consumer Travel and Behavioral Information

Most consumer travel and behavioral information is derived from Phocuswright's Consumer Travel Report Eighth Edition. Phocuswright fielded an online consumer survey from March 17-24, 2016, 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 1,862 qualified responses. The weighted respondent pool can be projected with confidence to the U.S. adult population with Internet access. A total of 3,718 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.

US $2,495 
CA $3,285 • £1,948 • €2,259
FREE for Open Access Subscribers
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