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What’s on the Horizon

In this session at the inaugural Search Engine Strategies Travel Conference, moderated by conference organizer, Elizabeth Osmeloksi of Zonder, speakers LeeAnn Prescott of Hitwise, and Range Online Media’s Vic Drabicky, talked about the future of Travel Search and the directions in which it may grow.

Trends

• Nearly 50% of all travel bookings are currently completed online - as this continues to grow, it will attract larger portions of travel suppliers’ marketing budgets. In 2007-08, overall travel expenditures will increase 4.4%. Online travel will increase 10%.
• In 1996, 66% of all Internet users were in the United States. In 2007, 20% are U.S. based.
• In May 2007, 46% of Internet users visited at least one travel website.

Distributors vs. Suppliers

The influence of online travel agencies or distributors (outfits like Expedia and Orbitz) is shrinking and they mainly dominate in package sales. In 2005, 67% of Google’s travel clicks went to distributors and 33% went to suppliers (the actual hotel, airline, or car rental agency who provides the service). In 2006, this shifted to 57% to distributors and 43% to suppliers. This change in consumer preference is expected to continue as more and more suppliers do a better job of marketing themselves online. Hotels should play to their strengths to gain an even bigger share of the market.

Consumers prefer booking directly with a hotel because:

• rewards programs
• ease of changing and/or cancelling reservations
• display of true availability
• higher quality rooms to those who reserve directly
• better customer service
• no additional fees are tacked on to reservations
• consumers find them more trustworthy

Consumers prefer distributors for:

• very wide selection
• low prices
• add ons, such as flights, car rentals, activities

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Categories: SEM.
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