Background
In the past several years, we have all watched the remarkable growth of
the online travel marketplace. With an increasing number of travel
consumers doing travel research online (75% of adults in the US - TIA),
gaining broadband Internet access at home and becoming more and more
accustomed to doing business and transacting on the web, we will
continue to see this growth across market segments at an ever
increasing rate.
Here is the online travel adoption rate in 2005 and 2008:
2005 2008
North America 42% 60%
Europe 15% 41%
APAC 9% 20%
(PhoCusWright 2007)
Hospitality: (USA, % of all bookings):
2004 2005 2006 2007 2010
U.S. Hospitality: 20% 25% 29% 33% 45%
(Merrill Lynch, PhoCusWright, HeBS)
This year, 40% of all leisure and 35% of business travel bookings will be done online. By 2010 over 50% of leisure bookings are expected to be online. The percentage of meeting planners researching and booking online is also growing at a rapid pace. An estimated 89% of planners are researching event locations on the web, and by 2008, 41% of all groups and meetings travel revenues will come from the Internet.
Direct vs. Indirect Online Distribution
The direct online channel will continue to be the main focus for
hoteliers. The industry as a whole has realized that not only has the
Internet become the preferred channel for travel consumers to plan and
book lodging, but the direct online channel is the cheapest form of
distribution. The shift from indirect to direct online distribution
will continue to be a major trend in the next several years:
Overall for the industry (USA): 2003 2005 2007 2008 2010
Hotel Branded Websites: 53% 54% 60% 62% 65%
Intermediary Websites: 47% 46% 40% 38% 35%
In 2006 the major hotel brands enjoyed an above the average direct vs. indirect online ratio of 81.4% vs. 18.6%.
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