Travel Booking - US

Published by: Mintel International Group Ltd.

Published: Apr. 1, 2007 - 91 Pages

Table of Contents

Scope and Themes

What you need to know

Definition

Abbreviations and terms

Abbreviations

Terms

Executive Summary

Bookings rise on increasing demand as well as rising prices

Driving forces—high income groups; self-booking

What the travelers think—very willing to do their own research, but friends and family carry more sway than industry sources

Growth will continue, so niches like personalized service, value-added service, and online group booking will do well

Market Drivers

Key points

Growth in high income brackets creates industry growth

Figure 1: Number of households per income group, 1999 and 2005

Age impacts what travel is booked and how it is booked

Figure 2: Population, by age, 2002-12

Rising gas prices

Figure 3: Change in gas prices, all types and regular, 2000-06

Leisure Travel Market Overview

Figure 4: Total U.S. travel expenditures, at current and constant prices, 2001-06

Figure 5: U.S. domestic leisure person-trips, 2001-06

Figure 6: Number of U.S. residents international leisure air travelers, 2000-05

Market Size and Trends

Key points

Figure 7: U.S. leisure/unmanaged business travel booking, at current and constant prices, 2003-06

Figure 8: Travel Price Index for lodging and airfare, 2001-06

Market Segmentation

Key points

Figure 9: Total U.S. leisure/unmanaged business travel booking, by online vs. offline, 2004 and 2006

But online vs. offline doesn’t tell the whole story

Hotel booking exemplifies trends

Figure 10: U.S. sales of hotels, by booking channel, 2003 and 2006

Being online is not enough

Supply Structure

Key points

Airlines

Airlines drive consumer traffic to websites and away from travel agents

Trends in flight booking

Figure 11: How personal airline flights are booked, 2002-06

Companies re-evaluate strategies for growth

Delta

JetBlue

Southwest/ATA

Frontier/AirTran

U.S. carrier operating revenue

Figure 12: Operating revenue of U.S. airlines, 2003 and 2006

Hotels and accommodations

Hotels use “carrots and sticks” to lure consumers back

Household income levels determine who stays

Hotel company revenues

Figure 13: International system-wide* revenue for top ten global hoteliers, 2003 and 2005

Hotel company activity

InterContinental Hotels Group PLC (IHG)

Accor North America

Best Western International

Hilton Hotels Corporation

Choice Hotels International Inc.

Car rentals

Figure 14: Total U.S. retail sales of car rentals for leisure/replacement purposes, at current and constant prices, 2001-06

Trends in rental car booking methods

Figure 15: Booking of most recent car rental, 2003 and 2005

Brand name is not enough

Car rental company revenues

Figure 16: Car rental sales, by company, 2005 and 2006

Cruises

Cruise lines and travel agents have a symbiotic relationship…

Figure 17: Incidence of using travel agent for booking cruise, by cruise type, 2002-06

…but cruise lines determined not to be undersold

Internet may be last frontier for cruise lines

Operating data

Figure 18: Cruise passenger nights, by company and brand, 2003-06

Advertising and Promotion

Key points

Overview

Figure 19: Leading company sales and media expenditures, 2005

Hotels and accommodations

Internet travel agencies

Priceline

Expedia

Figure 20: Expedia travel toiletries TV ad, 2006

Figure 21: Expedia winter getaway TV ad, 2006

Orbitz

Figure 22: Orbitz competing neighbors TV ad, 2006

Figure 23: OrbitzTLC TV ad, 2006

Travelocity

Figure 24: Travelocity Roaming Gnome guarantee enforcer TV ad, 2006

Figure 25: Travelocity Roaming Gnome myth denouncer TV ad, 2006

Hotels.com

Figure 26: Hotels.com traveling neighbors TV ad, 2006

Figure 27: Hotels.com peaceful hotel TV ad, 2006

Retail Distribution

Introduction

Most common travel booking methods

Figure 28: Method for booking last vacation, by type of vacation, February 2007

Internet booking

Traditional travel agents face tough competition

Figure 29: Agree with statement, “I prefer travel agents and the reassurance of the personal touch”, by selected demographics, February 2007

Travelers favor agents for international travel

Figure 30: Means of booking leisure and VFR air travel, U.S. outbound international travel, 2000-05

Figure 31: Use of travel agent services among domestic and foreign travelers, January-October 2006

The role of metasearchers

Companies and brands

Operating revenue

Figure 32: Major U.S. travel agencies, by worldwide sales, 2005 and 2006

Internet-based independent travel sites

Expedia

Orbitz

Travelocity

Priceline.com

Hotwire.com

Hotels.com

Travel agencies

American Express Travel

Carlson Wagonlit Travel Associates

Liberty Travel

AAA Travel

Future of global distribution systems impacts consumers’ choices when booking

Figure 33: Global distribution systems, by sales, air transactions booked,

The Consumer

Key points

Type of vacation taken or booked in last year

Figure 34: Type of vacation taken or booked in the last 12 months, February 2007

Figure 35: Type of vacation taken or booked in the last 12 months, by household income, February 2007

Figure 36: Type of vacation taken or booked in the last 12 months, by race/ethnicity, February 2007

Number of vacations taken in the last 12 months

Figure 37: Number of vacations taken in the last 12 months, February 2007

Cross-tabulation: type of vacation taken/booked vs. number of vacations taken in last year

Figure 38: Type of vacation taken or booked in the last 12 months, by number of vacations taken in the last 12 months, February 2007

Vacation components booked in last year

Figure 39: Vacation components booked, domestic and abroad, February 2007

Figure 40: Domestic vacation components booked, by household income, February 2007

Role of the Internet in vacation booking

Figure 41: How vacation is booked online, February 2007

Vacation booking attitudes and behaviors

Figure 42: Booking attitudes and behaviors—agree summary, February 2007*

Figure 43: Booking attitudes and behaviors—agree summary, by age, February 2007

Cross-tabulation: booking attitudes and behaviors vs. type of vacation taken/booked

Figure 44: Booking attitudes and behaviors, by type of vacation taken or booked in the last 12 months, February 2007

What influenced your choice of vacation?

Figure 45: Factors influencing vacation choice, February 2007

Figure 46: Factors influencing vacation choice, by age, February 2007

Figure 47: Factors influencing vacation choice, by race/ethnicity, February 2007

Cross-tabulation: factors influencing vacation vs. type of vacation taken/booked

Figure 48: Factors influencing vacation choice, by type of vacation taken or booked in the last 12 months, February 2007

Researching a vacation

Figure 49: Favored vacation research tools, February 2007

Figure 50: Favored vacation research tools, by age, February 2007

Cross-tabulation: favored research tools vs. type of vacation taken/booked

Figure 51: Favored research tools, by type of vacation taken/booked in the last 12 months, February 2007

Type of websites used to research vacations

Figure 52: Types of websites used for travel research, February 2007

Cross-tabulation: type of website favored vs. component of vacation booked

Figure 53: Vacation components booked, by type of websites used for travel research, February 2007

The Future

Key points

Gap in the market for tailored, trusted advice

Online suppliers step up customer service efforts

Group travel is considered the next frontier for online travel bookers

Dynamic packaging capabilities may be in danger

Market forecast

Leisure and unmanaged business travel booking

Figure 54: Forecast of total U.S. sales of leisure and unmanaged business travel booking, at current and constant prices, 2006-09

Forecast factors

Appendix: Trade Associations

Abstract

This report looks at a battle happening in the travel booking market. This is frequently characterized as being the struggle between online and offline booking. However, as more and more booking sources take their services online, it is more accurate to say that the battle is between Internet-based travel agencies, traditional travel agencies, and suppliers (airlines, hotels, rental car companies, etc.).

Specific insights include:

• Why Baby Boomers are important to the travel booking market
• How suppliers have sought to eliminate the middleman in the booking process, keeping more money in-house
• Which travel components travelers choose to book for themselves and which they are more likely to leave to a professional
• Who is more likely to travel, thus having the most significant impact on the travel booking market
• What components travelers are booking (airfare, cruises, package vacations, etc.) and how they are booking them
• How the Internet is used during the booking process

This report includes airline, hotel, and car rental bookings made for personal or vacation purposes. The report focuses on leisure travel, not corporate travel. However, some business travel coordinated by consumers is undoubtedly incorporated into the data, since customers often combine business and leisure travel.

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