The Impact of a Weakening Economy on Online Travel
Written by Jack Drew (contact - e-mail) -- December 3rd, 2008 |
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Given the severity of the problems in other markets, less mainstream attention has been placed on the state of the travel industry. Compete analyzed online activity within the air and hotel categories to identify if shifts are taking place in consumer interest in these products. The findings show a clear decline in online travel research activity, with actual booking and purchase activity also trending downward.
Air and hotel shopper volumes (consumers researching but not necessarily purchasing) have both gone into negative territory compared to a year ago, a first for 2008. In each month of 2008 to this point, online air and hotel shoppers had been up versus the prior year periods. Cautious consumers then began thinking less about travel in September, and started to abandon travel websites in October. While only a fraction of shoppers end up completing a purchase in any given month, these declines represent an important shrinking of the pool of vacationers, last minute shoppers, and undecided consumers to which travel marketers can generate transactions from.
On the positive side, online travel bookers for air and hotel are still up compared to a year ago, however significant wind has been taken out of the sails. Shopping and researching activity is a leading indicator of future travel purchasing, and unless a positive catalyst introduces itself, it appears that bookings growth will be pressured further in the coming months.
Travel marketers have reason to be concerned and must pay close attention to the signals that their customers and online prospects are sending. Given the decline in shoppers to work with, a well-planned online marketing strategy is more important now than ever. With the right mix of online advertising to bring in new shoppers, helpful website functionality to cleanly present a variety of choices, and compelling offers to seal the deal, savvy competitors will weather the storm.
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December 4th, 2008 at 2:35 am
Its not just the recession. I read a report about a survey of users of independent travel sites which says that most of them preferred to book directly with the air/hotel concerned, rather than thru the third party. And out of the ones who did use travel websites, a majority ended up not satisfied. Point is that the whole system of online travel websites isn’t working, and needs some heavy overhauling before customers return.
December 5th, 2008 at 10:23 am
The sad thing is that I think these numbers are going to get much more depressing going into 2009. Job report out today should help fuel the fire.
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December 10th, 2008 at 11:26 am
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February 6th, 2009 at 2:21 am
I have no idea how the recession will go. Many people lost money during the financial crisis, even their jobs. Therefore, surely they will hold tight their pockets to save money, especially those vacationists. For the independant travelers, they don’t know how to spend less to book their trips, maybe this market will not drop down that much.
February 12th, 2009 at 10:18 pm
Ling I was wondering if by any chance you had a link to the report you read?
February 22nd, 2009 at 11:36 am
If we are looking in the States - people have very little vacation and will still use it. Instead of flying to Disney, they may drive to Cedar Point. May pick Days Inn instead of Starwood.
So, Air should be down a lot. Hotel revenue should be down and travel planning sites that deal with a broad range of attractions and activities should be flat.
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