Air Travel: Trends, Insights and Opportunities. Gabe Ingalls May 2011
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1 Air Travel: Trends, Insights and Opportunities Gabe Ingalls May 2011
2 Summary Budget and Long-Haul In the last two years 23% have been on a budget holiday overseas. Of this, independently booked trips were twice as likely to have been taken as packages. Across all adults, the most popular attitude towards budget holidays is negative almost one in three people say they prefer to save up and take more expensive holidays. Amongst people who ve been on budget holidays, more than four in ten people say they ve had great holidays for a budget amount. Again amongst this latter group, almost one in four say budget holidays are all they can afford, while one in five go on budget holidays because they prioritise other spending. Consumers who say they can only afford budget holidays are most likely young, particularly year-olds. Mintel s research shows that nearly a fifth of those who have taken a long-haul package over the past year say they are now less likely to take long-haul holidays as a result of the recent APD rises. Nonetheless, both long and short haul flights are up year on year on Bing. Long-haul holidaymakers are most likely to be ABC1 pre-/no family couples/singles or ABC1 third age couples, particularly in the age group. The strongest attraction of long-haul holidays is seen as the opportunity for enjoying fresh cultural experiences, 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
3 Summary: Flight Priorities and Consumer Trends Prompt departure/arrival times are a key issue for consumers one in three rank this as the most important not in flight factor of a good air experience. Second-ranked here is the desire for a decent hand luggage size/weight allowance, with this option far more likely (at a ratio of two to one) to be chosen by women. Approximately one in six look first for some form of onboard entertainment this is particularly important to fliers with children and those on long-haul journeys. The cost of food/drink onboard (ie when it is not included in the ticket price) is a concern for many almost eight in ten fliers believe that when food/drink can be purchased onboard it is too expensive. Two in five think that airlines could do more to make check-in faster. And the older fliers are, the more likely they are to agree three in four of those aged 55-plus do so, for example. At the other end of the age range, younger fliers are the most likely to agree that price is the most important thing in choosing an airline. In fact, the younger the traveller, the more likely they are to agree Mintel International Group. All rights reserved. Confidential to Mintel.
4 Market Environment Budget and Long Haul
5 Research Issues in the Market: Budget With an average expenditure of 212 in 2010, domestic holidays are the key competition for budget overseas holidays. While all overseas trips and budget breaks dropped in 2009, UK holidays taken by UK residents rose almost 17% that year with much media attention devoted to this so-called staycation trend. Fuel supplements are back for many flights. Both of the market-leading tour operators TUI and Thomas Cook have re-introduced surcharges, adding 15 per person on short-haul trips. The instability in major oil-producing regions across the globe suggests that prices are unlikely to fall in the near future. In addition, petrol prices have reached a record high in the UK, and have also surged in popular European destinations for budget holidays increasing the overall expense of self-drive holidays, a major budget trip segment. This does, however, also have implications for domestic holidays (the competition) with three in four UK holidays taken by car. Budget holidays abroad are more likely to be independent trips (where components are bought separately) than packages, as Mintel s exclusive consumer research reveals. The leading low-cost airlines easyjet and Ryanair have continued to grow throughout the recession, and in the period increased passenger numbers by 50% and 80% respectively Mintel International Group. All rights reserved. Confidential to Mintel.
6 Research Issues in the Market: Long Haul Long-haul holidays have fallen 15% in volume and value terms over the past two years, to reach 7.24 million trips and a value of 6.9 billion (excl. transport) in Some 46% of UK adults have now been on holiday outside Europe at some point in their lives. Almost a fifth of consumers have travelled beyond Europe on holiday during the past 12 months. However, Mintel s research shows that nearly a fifth of those who have taken a long-haul package over the past year say they are now less likely to take long-haul holidays as a result of the recent APD rises. Long-haul holidaymakers are most likely to be ABC1 pre-/no family couples/singles or ABC1 third age couples, particularly in the age group. The strongest attraction of long-haul holidays is seen as the opportunity for enjoying fresh cultural experiences, selected by a third of consumers overall, and over half of recent long-haul travellers. Just one in eight consumers say they would want expert advice from a travel agent before booking a long-haul holiday, a fall of seven percentage points since November Mintel International Group. All rights reserved. Confidential to Mintel.
7 Consumer Trends
8 Search Air Travel Hitwise Demographics The South-East, London and some of the North-West have the highest % of Searchers There is an even gender split in the consumers in the is category The 55+population make up a large percentage of the searchers in the category Source: Hitwise Source: Hitwise Source: Hitwise
9 Search Air Travel Hitwise Demographic Mosaic and Social Grades Air travel has the highest number of visitors in the A/B/C1 categories however indexes the best in the A/B category Suburban Mindsets, Liberal Opinions and Professional Rewards make up the top 3 mosaic groups while the Alpha Territory s and Active Retirements over index Source: Hitwise Source: Hitwise
10 Advertising Climate
11 Media Spend Travel advertisers tend to spend the most on Press advertising and Television followed by the Direct Mail On average the industry spent around 8% on Internet advertising (not including search) Source: NNR addynanix :
12 Impressions and Audience by Publisher - AdMetrix While the top number of impressions goes to Yahoo! only beating out Microsoft sites slightly, MS Sites have a larger number of Advertising Exposed Unique Visitors than any other publisher MS sites have the 3 rd highest frequency behind that of Yahoo! Sites and AOL MS Sites have the highest GRP of the Total Population MS offers a unique opportunity to Air Travel Advertisers to make the most of their campaign by offering the largest reach of all publishers Source: ComScore AdMetrix: March 2011
13 Top Advertisers by Impression - AdMetrix The top 5 Advertisers make up 74% of the vertical s impressions Source: ComScore AdMetrix: March 2011
14 Search Bing Search Traffic KPIs Overall, flights/air travel KWs have grown 38% year on year for 2011 While this took a dip in April, mostly in the 2 nd half of the month as a result of Easter, the Royal Wedding and Bank Holidays, the market has grown 13% for April year on year Long-haul flights have been popular in the 1 st quarter due to the increase in public holidays in April 1. Microsoft Advertising Intelligence Tool
15 Search Product and Location KW Traffic - Bing Year on year for 2011, Bing has seen strong growth in traffic to East Asia as well as Australia/New Zealand However, overall, short-haul flights have grown more in 2011 (45%) than long-haul (36%) 1. Microsoft Advertising Intelligence Tool ( Year on year and month on month for April)
16 Search KW Traffic vs Exchange Rates Expenditure once you reach a destination can also be a deciding factor when choosing a destination. Consequently, keyword traffic to destinations can be influenced by the exchange rates to those destinations as shown below. Current Exchange Rates Australia 1.5 United States 1.6 Europe 1.1
17 Search Air Travel - Hitwise Category Capital One KWs are typically a combination 1 to 3 search terms While organic clicks provide most of the traffic, paid search has grown in the past couple of months to account for almost the same % of clicks Source: Hitwise Source: Hitwise
18 Search Air Travel KW Demographics and Daily Trends: Bing 54% more during the week than weekend There is a slight bias towards female searchers; traffic peak in the age brackets 1. Microsoft Advertising Intelligence Tool
19 Search Air Travel Hitwise Demographics The South-East, London and some of the North-West have the highest % of Searchers There is an even gender split in the consumers in the is category The 55+population make up a large percentage of the searchers in the category Source: Hitwise Source: Hitwise Source: Hitwise
20 Search Air Travel Hitwise Demographic Mosaic and Social Grades Air travel has the highest number of visitors in the A/B/C1 categories however indexes the best in the A/B category Suburban Mindsets, Liberal Opinions and Professional Rewards make up the top 3 mosaic groups while the Alpha Territory s and Active Retirements over index Source: Hitwise Source: Hitwise
21 Microsoft Media Network Trends
22 Microsoft Media Network Network Demographics 54% of the impressions occur between 18 and 34, while a larger proportion of clicks occur in the higher age brackets, 25-54, than in impressions Impressions and conversions peak in the for females while the higher age groups are more evenly split 55% of conversion occur between the age bracket Conversions for Travel usually entail a booking Conversions are predominantly females, particularly in the lower age groups even though clicks are more evenly distributed throughout the demographic range Source: Microsoft Media Network : July 2010 April 2011
23 Microsoft Media Network Network: Day of the Week There is a slight decline in impressions through out the week however consumers are more likely to click during first half of the work week and on Sunday Conversions have two peaks on Tuesday as well as at the end of the week on Friday Source: Microsoft Media Network : July 2010 April 2011
24 Microsoft Media Network Network: Time of Day There is a build of Impressions and Actions during the early afternoon and a slight elevation in the early evening There are two main peaks that occurs post-lunch before the end of the work day and at the end of the evening Targeting options could include the during and post-lunch targeting to hit the break browsers Activity ramps up quickly during the start of the work day and maintains levels until evening Consumers are most active during the evening Source: Microsoft Media Network : July 2010 April2011
25 Air Travel Opportunities Emerging Destinations Because of many variables in the market place, there are many factors which influence destination choice. Exchange rates, fuel prices and cost of living are all factors. On Bing, East Asian countries have seen strong growth so far in Moreover, budget airlines to sunny European destinations should also continue to grow Demographic/Mosaic The users and searchers for this type of product index well in demographic sectors and can be targeting with our Mosaic offering Search and Display Better Together Use both offerings to help boost your ROI moreover, use our display offering to help boost your brand campaign. Particularly when we have seen good increases in traffic in the start of 2011 Emerging Destinations and Micro Trends Independent Budget Flights to Traditional European Destinations Search and Display Better Together
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