The Travel Market
To understand broader context of the state of online travel market, I am presenting some data and statistics for travel market in general.
- Travel market is worth US$1.3 trillion in 2011 - via WTCC
- Travel industry is employing 260 million people worldwide, 100 million directly - via WTCC
- After 2009 travel industry is recovering and is growing by cca 5%-7% per year - via UNWTO
Over the past six decades, tourism has experienced continued expansion and diversification becoming one of the largest and fastest growing economic sectors in the world.
Many new destinations have emerged alongside the traditional ones of Europe and North America. via UNWTO
Top Incoming Countries
|Rank||Country||International tourist arrivals (in millions)|
Online Travel Market
Online travel market is not growing at a pace as it did before. Still, the growth is stable. The best resource for online travel market in Europe is from Centre for Regional and Tourism research from Denmark (read it here). Here are some of the new numbers:
- 50% of leisure trips and 40% of business trips are booked online - via WTCC
- Online travel market will reach US$313 billion in 2012 - via WTCC
- More than 114 million of US travellers are researching online, 94 million actually book reservations online - via ehotelier.com
- Travel planning via Internet in US is: 85% among personal travellers; 78% among business travellers - via New Media Trend Watch
- Great Mashable Infographic
Breakdown of channels used by active travellers to book travel in February 2011 via NewMedia TrendWatch:
- Online travel agency: 62%
- Branded supplier site: 46%
- Meta search site: 14%
- Collective buying site: 5%
- Private sale site: 5%
- Offline travel agent: 9%
Social and Mobile
Social and Mobile are getting traction. Not just that, but they are converging into a marketing powerhouse. Recent reports say that travel companies are investing heavily into social, but with uncertain ROI (guess they are testing the waters). There are some that already have positive outcome. Lets check some numbers on social and mobile:
TripAdvisor has shared that the TripAdvisor app was downloaded an average of 25 times per minute in January 2012 and has now surpassed 15 million total downloads of the TripAdvisor app across all platforms and devices in 20 languages. via EyeForTravel
- 5.403.000 use mobile for travel services (US) - via ComScore
- by 2015 IDC predicts that smartphone sales will nearly double to 982 million globally
- trials for ebookers.com site showed that 70% of hotel bookings made throughout the new mobile website were for same day check-in
- 34% of travellers used mobile pre-purchase - via EyeForTravel
- Hilton saw $40 ROI for ever $1 spent on mobile
- Intercontinental Hotel Group now say monthly mobile revenue is at US$10 million (60% are for same-day bookings)
- Travelzoo's local daily deals are valued at $400 million
- Africa is leading the world in m-commerce with 489 million mobile phone users (60% of mobile web users use phones to purchase goods) - via Hotel Industry
Location Based Services: Advertiser expenditure on Location Based Services set to approach $10 billion by 2016 (WMS Report)
What does it all mean?
So, a hotel, a travel agency or private accommodation owner may ask himself: What's all that data got to do with me? Well, they are probably right. But let's see what they can do in the age of internet, mobile and social marketing strategies and how to serve their guests.
Prepare for Growth
However, know where we are in the game. We are in the 2nd inning of the industry when compared to a baseball game with the peak or 9th inning coming in 2016...use caution from 2017 and beyond! These next 5 years will see hotel values with annualized double digit growth. Demand will stabilize in 2012 but rates will grow beyond the rate of inflation. That means profits and values improve markedly. via ehotelier
Hotels and Hotel Chains
Hotels and hotel chains face every incresing competition and rise in costs of advertising (aggregators like Booking.com or Google are entering the arena - see how Google competes with Hotel Finder). What can they do:
- Create mobile-friendly websites (Webiny supports mobile friendly sites)
- Consolidate all channels
- Improve data usage
- Create Landing Pages for each and every hotel - don't depend on one single website (remember, Webiny is a multidomain and multilingual system)
- Design smart social media strategy
- Capture every piece of data you can
Image: Google Hotel Finder - Google is getting into hotel space
Travel agencies like hotels are facing new challenges - from bidding wars in Google AdWords to the need to create diversified channels to attract new bookings. Unlike hotel chains that have better margins on bookings, travel agencies need to tighten their organizational efforts to produce even better value to end clients. They can:
- Provide value to end clients through social and mobile
- Tighten their processes to meet their clients needs (better response time, tailor made offers, support before, during and after the trip)
- Manage their data and up-sell, cross-sell their inventory
- Personalize travelers' experience both online and offline
- Offer incentives to clients to book via agency
Private Accommodation Owners
How can a private accommodation owner compete in this extremely competitive industry? Well, only by personalizing the offer. So what can they do:
- Create websites that explain the hospitality and experience
- Explain the advantage of local know-how
- Get their data, ask them to share their experience. Word of mouth is very powerful tool!
- Give them "goodbye" gifts.
- Use social media to connect to old and new guests
I hope you liked the blog post. Feel free to drop links to any new insights and resources (also, Tweet, Like, +1, sharing is caring). Thanks!
P.S. I would also like to invite you to check out our booking solution.