TRENDS SHAPING ONLINE TRAVEL · Multi-screen consumer behaviour goes mainstream CONSUMER TRENDS IN ONLINE TRAVEL According to Google, consumers’ use of multiple screens is sequential

TRENDS SHAPING ONLINE TRAVEL

Euromonitor International

18 MARCH 201418 MARCH 2014

@Euromonitor@CarolineBremner@CarolineBremner

GLOBAL OVERVIEWGLOBAL OVERVIEW

CONSUMER TRENDS IN ONLINE TRAVEL

A NEW COMPETITIVE ENVIRONMENTA NEW COMPETITIVE ENVIRONMENT

3

Global online travel sales record healthy growthGLOBAL OVERVIEW

Global travel and tourism sales up from US$2,260 billion (2013) to US$2,840 billion (2017)

Healthy growth driven by rising number of trips in advanced and emerging markets

Global online travel sales record healthy growth

Healthy growth driven by rising number of trips in advanced and emerging markets

Global online travel sales accounted for US$590 billion (2013), 25% of total sales

Global Travel and Tourism and Online Travel Sales 2013-2017

3,000

Global Travel and Tourism and Online Travel Sales 2013-2017

1,500

2,000

2,500

US

$b

illi

on

Travel Sales

500

1,000

1,500

US

$b

illi

on

Online TravelSales

02013 2014 2015 2016 2017

Note: Includes both direct sales and sales through intermediaries in transportation, travel accommodation, car rental and tourist attractionsSource: Euromonitor International

© Euromonitor International

Source: Euromonitor International

4

Air transport leads online travel sales, followed by hotelsGLOBAL OVERVIEW

Air online sales accounted for US$360 billion - 46% of total air travel sales

Travel accommodation amounted to US$164 billion, with a 23% penetration rate

Air transport leads online travel sales, followed by hotels

Travel accommodation amounted to US$164 billion, with a 23% penetration rate

Global Travel and Tourism and Online Travel Sales

1,200

1,400

Global Travel and Tourism and Online Travel Salesby Category 2013

600

800

1,000

1,200

US

$b

illi

on

Travel Sales

Online Travel Sales

200

400

600

US

$b

illi

on

Online Travel Sales

Transportation TravelAccommodation

TouristAttractions

Car Rental-

Note: Includes both direct sales and sales through intermediariesSource: Euromonitor International


Source: Euromonitor International

5

North America stays ahead in online travel salesGLOBAL OVERVIEW

North America was the leading world region in terms of online travel sales (2013)

Europe was the second largest at US$200 billion, with 34% penetration

North America stays ahead in online travel sales

Europe was the second largest at US$200 billion, with 34% penetration

Asia Pacific is largest for total travel sales of US$691 billion, but is only third for online

600

700

Global Travel and Tourism and Online Travel Sales by Region2013

300

400

500

600

US

$b

illi

on Travel Sales

Online Travel

100

200

300

US

$b

illi

on

Online TravelSales

NorthAmerica

WesternEurope

Asia Pacific Australasia LatinAmerica

EasternEurope

Middle Eastand Africa

-

Note: Includes both direct sales and sales through intermediaries in transportation, travel accommodation, car rental and tourist attractions


Source: Euromonitor International.

6

Asia Pacific to double its online travel sales by 2017GLOBAL OVERVIEW

North America to record the lowest growth over 2012-2017 at 7% CAGR

Western Europe to catch up with North America by 2017, with US$270 billion

Asia Pacific to double its online travel sales by 2017

Western Europe to catch up with North America by 2017, with US$270 billion

Asia Pacific online travel sales to double from US$78 billion to US$155 billion

Online Travel Sales by Region 2012-2017

250

300

Online Travel Sales by Region 2012-2017

North America

Western Europe

150

200

US

$b

illi

on Asia Pacific

Australasia

Latin America

50

100US

$b

illi

on

Latin America

Eastern Europe

Middle East andAfrica

02012 2013 2014 2015 2016 2017

Africa

Note: Includes both direct sales and sales through intermediaries in transportation, travel accommodation, car rental and tourist attractionsSource: Euromonitor International

.


.

7

Spain is main destination market for online hotel bookingsFOCUS ON ONLINE HOTEL SALES IN EUROPE

Spain was the largest European destination for online hotel sales, US$6 billion

Italy achieved the sharpest growth in 2013 (+26%), followed by Spain (+24%)

Spain is main destination market for online hotel bookings

Italy achieved the sharpest growth in 2013 (+26%), followed by Spain (+24%)

7

Top European Destinations for Online Hotel Sales 2012/2013

5

6

7

2

3

4

US

$b

illi

on

2012

2013

-

1





9

Multi-screen consumer behaviour goes mainstreamCONSUMER TRENDS IN ONLINE TRAVEL

According to Google, consumers’ use of multiple screens is sequential or simultaneous

Smartphones are generally the starting point to then move to PC, tablet or TV

Companies need to build flexible technological architecture to reach consumers on all screens

Multi-screen consumer behaviour goes mainstream

Companies need to build flexible technological architecture to reach consumers on all screens

Sequentialusageusage

Simultaneoususage


10

Impact of wearable technologies and connected carsCONSUMER TRENDS IN ONLINE TRAVEL

Wearable technologies reach connected consumers for alerts and customised service

Expedia working on the development of software for Google Glass, ahead of its release

Connected cars allow on-the-go consumers find information, book hotels and other services

Impact of wearable technologies and connected cars

Connected cars allow on-the-go consumers find information, book hotels and other services

2007Mobile Internet

2014- Wearabletechnology

- Connected1996PC Internet

- Connectedcars


11

Peer-to-peer and the sharing economyCONSUMER TRENDS IN ONLINE TRAVEL

Thanks to social media, travellers have been sharing their reviews and other content for years

Travel services is the second stage in the peer-to-peer and sharing trend

Consumers are now active in providing holiday apartments, cars, meals and tours

Peer-to-peer and the sharing economy

Consumers are now active in providing holiday apartments, cars, meals and tours

Sharingreviews,reviews,

photos andvideos

Sharingtraveltravel

services


12

Personalisation through Big DataCONSUMER TRENDS IN ONLINE TRAVEL

Travellers expect a more unique and tailored consumer experience

Big data helps companies to present customers with targeted options

Kayak makes use of big data to build search results and to predict future flight prices

Personalisation through Big Data

Kayak makes use of big data to build search results and to predict future flight prices


13

Rising demand for real-time servicesCONSUMER TRENDS IN ONLINE TRAVEL

Always connected consumers expect to receive real-time services from travel companies

Companies need to provide personalised alerts and information

Customer service needs to be available 24/7 and easy to access via mobile devices

Rising demand for real-time services

Customer service needs to be available 24/7 and easy to access via mobile devices

Travellers

Space: Anywhere Time: Anytime

Travelcompaniescompanies





15

Technology players: GoogleA NEW COMPETITIVE ENVIRONMENT

OTAs have made significant investments in Google ads, which fuels their growth

From search engine to knowledge engine: providing not only links but also answers

Slow but steady growth for Google Hotel Finder and Google Flights metasearch engines

Technology players: Google

Slow but steady growth for Google Hotel Finder and Google Flights metasearch engines


16

Engaging customers through social mediaA NEW COMPETITIVE ENVIRONMENT

Engaging customers through social media

Photos and comments shared on social media are effective sources of inspiration for travel

Social media is a great tool to engage customers and gain loyalty over the long term…

…but less effective in generating bookings in the short term

Tourism Travel

…but less effective in generating bookings in the short term

Tourismboards

AirlinesTravel

retailersHotels

SocialMedia

Crisismanage-CustomerLoyalty Promotion

Brandawareness

manage-ment

Customerservice

Loyalty Promotionawareness


17

OTAs - increased consolidationA NEW COMPETITIVE ENVIRONMENT

Priceline and Expedia are the dominant players in the OTA space

Odigeo hotel search and Travelocity are powered by the Big Two

Chinese and Indian players are growing rapidly

OTAs - increased consolidation

Chinese and Indian players are growing rapidly

World’s Leading Global Online Travel Agencies 2011/2012

Priceline.com Inc

Expedia Inc

World’s Leading Global Online Travel Agencies 2011/2012

Ctrip.com International Ltd

OdigeO Group

Orbitz Worldwide Inc

Sabre Corp

MakeMyTrip India Pvt Ltd

Hotel Reservation Service GmbH

Wotif.com Holdings Ltd

Ctrip.com International Ltd

0 5 10 15 20 25 30 35

MakeMyTrip India Pvt Ltd

Gross sales US$ billion

2012 2011


2012 2011

18

Tough competition between intermediaries and direct suppliersA NEW COMPETITIVE ENVIRONMENT

Airlines have successfully competed with online intermediaries

Hotel companies suffer from the rise of OTAs

Competition between OTAs and hotel chains expected to intensify further in future

Tough competition between intermediaries and direct suppliers

Competition between OTAs and hotel chains expected to intensify further in future

Hotel Online Sales by Channelin Europe 2012-2017

Air Online Sales by Channel inEurope 2012-2017

60

70

in Europe 2012-2017

120,000

140,000

Europe 2012-2017

40

50

60

US

$b

illi

on

60,000

80,000

100,000

US

$b

illi

on

10

20

30US

$b

illi

on

20,000

40,000

60,000US

$b

illi

on

0

10

2012 2013 2014 2015 2016 2017

Hotels Intermediaries

-

20,000

2012 2013 2014 2015 2016 2017

Airlines Intermediaries


19

Traditional retailers embrace online travelA NEW COMPETITIVE ENVIRONMENT

Leading tour operators are investing heavily in the online channel

Over a third of TUI Travel and Thomas Cook’s sales were made online (2013)

TUI Travel is also active in the OTA sector with LateRooms, AsiaRooms and Malapronta

Traditional retailers embrace online travel

TUI Travel is also active in the OTA sector with LateRooms, AsiaRooms and Malapronta

TUI Travel: Online Sales as Thomas Cook: Online Sales as

25

30

35

40

%o

fm

ain

stre

am

sale

s

TUI Travel: Online Sales as% of Mainstream Sales

30

35

40

%o

fg

rou

psa

les

Thomas Cook: Online Sales as% of Group Sales

5

10

15

20

25

%o

fm

ain

stre

am

sale

s

10

15

20

25

%o

fg

rou

psa

les

0

5

2010 2011 2012 2013

%o

fm

ain

stre

am

sale

s

0

5

2010 2011 2012 2013%

of

gro

up

sale

s

Source: TUI TravelNote: Data refer to fiscal year ending September

Source: Thomas CookNote: Data refer to fiscal year ending September


Note: Data refer to fiscal year ending September Note: Data refer to fiscal year ending September

20

The next big players in online travelA NEW COMPETITIVE ENVIRONMENT

New companies are emerging that could become the next big players in online travel

Specialised mobile travel agencies include Hotel Tonight and Blink by Groupon

OTAs from emerging markets could soon expand in advanced markets

The next big players in online travel

OTAs from emerging markets could soon expand in advanced markets


THANK YOU FOR LISTENING

Caroline Bremner

Head of Travel and Tourism

[email protected]

Documents

TRENDS SHAPING ONLINE TRAVEL · Multi-screen consumer behaviour goes mainstream CONSUMER TRENDS IN ONLINE TRAVEL According to Google, consumers’ use of multiple screens is sequential