Trends in the Online Travel Industry Hillá Meller, Digital Insights and Content Manager Pavel Tuchinsky, Marketing Analyst
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1 Trends in the Online Travel Industry By: Hillá Meller, Digital Insights and Content Manager Pavel Tuchinsky, Marketing Analyst
2 Table of Contents Introduction 3 Hotels & Accommodations 4 Airlines 7 Online Travel Agencies (OTAs) 9 Cruises 11 Travel Recommendation Sites 13 Get Actionable Insights for Travel Sites 16 About SimilarWeb 17 2
3 Introduction This report analyzes five distinct categories within the travel industry: Accommodation and Hotels, Airlines and Airports, Online Travel Agencies (OTAs), Cruises, and Review Sites. In each category, leading sites behavior is examined between March 2015 and March 2016 in the US, and compared how they fared. The overwhelming trend in the industry is a shift towards mobile usage, as travelers become more comfortable using their mobile devices to research and book their travel plans on the go. Another striking trend is the decrease in spend on paid search and display ads across the board. Finally, OTAs and review sites, traditionally big providers of traffic to other sites, have been sending a lot less traffic in March 2016 than they did a year earlier. Travel Seasonality 10.50% 9.50% 8.50% 7.50% 6.50% 5.50% 4.50% Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Accommodation and Hotels Airlines and Airports OTAs Cruises Review Sites US Desktop and Mobile Data, March March 2016 In general, all travel sub-categories follow a similar seasonality pattern, with peaks of traffic occurring during the summer months, and then declining in the fall. Cruises experience a particular spike in January, and hotels in July, but it seems that as a whole users gravitate to online travel in similar patterns. 3
4 Hotels & Accommodations The top 25 Hotel and Accommodations sites account for over 54% of all traffic. The leading site, AirBNB, is not a traditional hotel site, a sign of the changing face of the industry. Overall traffic to these 25 sites in the US decreased 17.54% between March 2015 and Traffic Sources Direct Organic Search Paid Search Referrals Mail Social Display Ads 35.45% 40.82% 15.15% 21.29% 25.43% 19.49% 5.38% 5.43% 0.88% 30.84% 22.47% % 3.27% 3.89% 18.87% 1.60% 1.54% -3.54% 2.15% 0.63% % US Desktop Data Referral traffic went down significantly, presumably because more OTAs push for onsite bookings, and are referring less traffic out including to Hotel sites. Additionally, the growth of the sharing economy models of AirBNB, VRBO, and their likes increased direct and search traffic. 4
5 Below is a comparison between the top 5 Sharing Economy Travel Sites and 5 leading Traditional Hotel Sites; the former is less dependent on referrals, and receives more direct and organic search traffic, which explains the trends seen above. Sharing Economy airbnb.com vrbo.com homeaway.com couchsurfing.com flipkey.com Traditional Hotel Sites hotels.com booking.com marriott.com ihg.com starwoodhotels.com Traditional vs. Sharing Economy: Traffic Sources Sharing Economy Traditional Hotel Sites 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Direct Mail Referrals Organic Search Social Paid Search Display Ads US Desktop Data, May April
6 Share of Mobile Web Traffic 47.9% 53.99% 12.75% US Mobile Data The growth in mobile web traffic can be seen across the categories, as users become more comfortable with browsing and booking straight from their mobile devices. Engagement Metrics Metric Desktop Pages/Visit % Duration 0:07:25 0:08: % Bounce Rate 32.19% 26.63% % Mobile Web Pages/Visit % Duration 0:04:31 0:04: % Bounce Rate 46.38% 46.04% -0.73% Although mobile visits increased to the accommodation category, the engagement metrics for mobile have gone down slightly, and bounce rate improved only slightly. Meanwhile, on desktop users seem to spend more time on these sites, which could be related to the proliferation of booking options on sites like AirBNB. 6
7 Airlines The top 25 Airlines sites account for over 80% of all traffic to the category in the US. Combined Desktop and Mobile Web Traffic 187,221, ,350, % Traffic Sources Direct Organic Search Paid Search Referrals Mail Social Display Ads 44.05% 47.50% 7.83% 23.50% 26.85% 14.23% 2.33% 1.49% % 22.56% 17.83% % 5.82% 4.99% % 1.03% 0.94% -9.03% 0.48% 0.05% % US Desktop Data Paid traffic sources (Paid Search and Display Ads) have gone down significantly, while direct and organic search traffic are on the rise, similar to the accommodations category. Direct and Organic Search traffic are superior in quality to paid search, because users who arrive through those channels have higher intent to purchase, arriving at the site more of their own volition. 7
8 Share of Mobile Web Traffic 45.1% 46.93% 4.17% US Mobile Data The growth in mobile web traffic share is smaller in Airlines than it is in hotels. This indicates that while booking flights on mobile devices is becoming more common, travelers are less likely to book a flight online than they are a hotel room. Engagement Metrics Metric Desktop Pages/Visit % Duration 0:08:27 0:08: % Bounce Rate 17.22% 16.22% -5.79% Mobile Web Pages/Visit % Duration 0:04:52 0:04: % Bounce Rate 36.35% 34.31% -5.61% The trend here follows that of the accommodations category, with improved engagement on desktop and decreased engagement on mobile web with the exception of an improved lower bounce rate. Lower bounce rates in this category indicate higher intent among visitors. 8
9 Online Travel Agencies (OTAs) OTAs allow travelers to book hotels, flights, and cars. Some OTAs act as search engines, sending users to book elsewhere, while others keep customers on-site for booking. Increasingly, the latter is the model that most sites rely on, which explains the category s significant decrease in outgoing traffic. Traffic Sources Direct Organic Search Paid Search Referrals Mail Social Display Ads 34.57% 44.75% 29.45% 15.93% 19.36% 21.58% 5.62% 6.61% 17.58% 37.67% 22.93% % 2.81% 3.53% 25.62% 0.68% 0.78% 14.80% 2.84% 1.81% % US Desktop Data OTAs have become less dependent on Display Ads and Referrals, probably indication that those sources of traffic are less likely to convert visitors to buyers. It also appears that more OTAs have become household names over time, with direct traffic now accounting to almost half of all traffic. Share of Mobile Web Traffic 43.8% 49.26% 12.52% US Mobile Data This category, like the others, has seen an increase in mobile traffic, as users become more accustomed to browsing and making travel plans on the go. 9
10 Engagement Metrics Metric Desktop Pages/Visit % Duration 0:06:14 0:10: % Bounce Rate 28.70% 24.62% % Mobile Web Pages/Visit % Duration 0:04:53 0:04: % Bounce Rate 36.24% 34.81% -3.93% OTAs demonstrate more mixed trends: overall, these sites have improved in their engagement, but there has been a slight decrease in mobile pages per visit. OTAs have been historically important providers of traffic to other sites, but between March 2015 and March 2016, they have experienced a staggering decrease in their ratio of outgoing traffic (measured as total number outgoing visits divided by number of visits to the site). Outgoing visits Ratio 42.16% 20.01% % US Desktop Data This decrease is a clear indication that more OTAs are trying to transition towards an on-site booking model, and are losing their value as affiliates. 10
11 Cruises Traffic Sources Direct Organic Search Paid Search Referrals Mail Social Display Ads 34.73% 38.77% 11.62% 31.12% 32.43% 4.21% 6.10% 5.95% -2.39% 19.98% 16.20% % 4.80% 3.92% % 2.18% 1.74% % 1.32% 0.61% % US Desktop Data Cruise goers still arrive at cruise sites through organic search by directly typing the URL, showing particularly high intent. This makes sense, as those planning a cruise are less likely to use an OTA or shop around as they would for a flight or a hotel. Share of Mobile Web Traffic 49.7% 52.40% 5.36% US Mobile Data This category has also seen a rise in the mobile web share of visits, although a more moderate one. Despite the fact that engagement for mobile web is on the decline (see below), cruise sites now receive more than half of their traffic from mobile web. 11
12 Engagement Metrics Metric Desktop Pages/Visit % Duration 0:09:49 0:09: % Bounce Rate 25.28% 25.54% 1.00% Mobile Web Pages/Visit % Duration 0:04:59 0:04: % Bounce Rate 44.95% 45.51% 1.25% Cruises is the only category that has seen consistently worsening mobile web engagement stats, suggesting that cruise lines have an opportunity to improve their mobile websites. 12
13 Travel Recommendation Sites In addition to searching for flights and accommodations, travelers often research destinations before or while they travel. This may include looking for restaurants, cultural attractions, or services, and peer recommendation sites play a big role in helping travelers make decisions. This category is smaller, and much more concentrated, with Yelp and TripAdvisor dominating the landscape Leading Travel Recommendation Sites yelp.com lonleyplanet.com tripadvisor.com 10best.com foursquare.com citysearch.com US Desktop and Mobile Traffic, March
14 Traffic Sources Direct Organic Search Paid Search Referrals Mail Social Display Ads 21.37% 20.15% -5.72% 64.88% 70.34% 8.41% 0.95% 0.01% % 10.48% 7.74% % 1.04% 1.03% -0.95% 1.29% 1.12% % 0.32% 0.01% % US Desktop Data Travel recommendation sites rely most heavily on Organic Search, which is also the only traffic source that has grown this year. They also spend the least on display advertising and paid search, which decreased even more this year. Share of Mobile Traffic 54.4% 51.69% -4.97% US Mobile Data This is the only category that has seen a decrease in the share of traffic coming from mobile web. This probably has to do with the fact that users turn to their apps more often, as many of these sites rely on location services, which are better integrated into mobile apps than they are to mobile web. 14
15 Enagement Metrics Metric Desktop Pages/Visit % Duration 0:05:06 0:05: % Bounce Rate 41.75% 40.87% -2.10% Mobile Web Pages/Visit % Duration 0:02:38 0:02: % Bounce Rate 59.92% 60.33% 0.68% Users of travel recommendation sites appear to have become less decisive or simply doing more in depth homework this year, visiting a lot more pages per visit both on desktop and on mobile web. Outgoing visits Ratio 23.47% 8.39% % US Desktop Data Here too there is a significant decrease in the volume of traffic that these sites send elsewhere. This again can be attributed partially to TripAdvisor s shift towards on-site booking for certain services, therefore generating significantly less outgoing traffic. 15
16 Get Actionable Insights for Travel Sites SimilarWeb s insights enable businesses and digital marketers to: Discover strengths and weaknesses of their competitors sites Decide which affiliate marketing strategies can be improved, and Deploy digital marketing strategies to attract and engage users To learn more about how we can help you improve your affiliate marketing performance, call SimilarWeb at , or contact us online. 16
17 Discover Your Competitors Website Traffic Statistics SimilarWeb s proprietary big-data technology is the basis of our SaaS solutions. SimilarWeb s experienced research teams use machine learning algorithms and statistical modeling to combine multiple global and multi-device data sources. Every day SimilarWeb collects and processes billions of data points covering every website, every app, across every industry, worldwide. This is done by combining data from the following sources: 1. We own the largest and most diverse panel in the world. 2. We partner with Internet Service Providers around the world and integrate their data into our system. Working with ISPs enables us to sit on the pipes that shift internet data around the world and analyze this data, providing us with a deeper understanding of online trends ,000+ websites and apps directly share their analytics data to help explain the digital world. 4. We crawl, collect and map billions of data points per month from around the web and digital ecosystem. Click to schedule a live demo of SimilarWeb s global multi-device marketing intelligence platform 17
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