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Holidays on the Internet - UK - April 2012

“Online travel-based resources or booking facilities need to offer a dedicated mobile experience in order to ensure that they maintain market share over 2012 and 2013, as browsing from mobile devices becomes more frequent both at home and abroad. Creating an online presence that consumers can return to with reviews and comments post-holiday will ensure long-term patronage and help with a strong, persistent brand identity.”

– Samuel Gee, Technology Analyst

Some questions answered in this report include:

  • Will hoteliers come to love user-generated content?
  • How can UGC-focused sites increase their reach?
  • Can social buying services be utilised without dissolving brand value?

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Table of contents

  1. Introduction

      • Definitions
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Value forecast of holidays bought on the internet, 2006-16
            • Market factors
              • Mobile device usage grows
                • User-generated content takes centre stage
                  • Rise of daily deal websites presents possible brand devaluation
                    • Companies and products
                      • Figure 2: Top online travel websites, by unique monthly visitors, January 2010-January 2012
                    • The consumer
                      • Booking online
                        • Figure 3: Types of holiday booked in the last 12 months, by amount of holiday booked online, February 2012
                      • Online booking services
                        • Figure 4: Internet services used to book online holiday elements, February 2012
                      • Attitudes towards booking online
                        • Figure 5: Attitudes towards booking holidays online, February 2012
                      • Attitudes towards researching online
                        • Figure 6: Attitudes towards researching holidays online, February 2012
                      • Digital activity on holiday and at home
                        • Figure 7: Digital activity engaged in during holidays, February 2012
                        • Figure 8: Digital activity engaged in after holidays, February 2012
                      • Target groups
                        • Figure 9: Target groups, February 2012
                      • What we think
                      • Issues in the Market

                          • Will hoteliers come to love user-generated content?
                            • How can UGC-focused sites increase their reach?
                              • Mobile offerings required to fully monetise from increased device usage
                                • Can social buying services be utilised without dissolving brand value?
                                • Future Opportunities

                                  • Inspire Insights
                                    • Trend: Influentials
                                      • Trend: Switch Off
                                      • Internal Market Environment

                                        • Key points
                                          • Total holidays rose in 2011
                                            • Figure 10: Domestic and overseas holidays and expenditure, 2006-11
                                          • Travel guidebook purchases down year on year
                                            • Figure 11: Purchase of a travel guidebook in the last 12 months, 2008-11
                                            • Figure 12: Sources of information used to research holidays, 2009-11
                                          • Two or three trips most common
                                            • Figure 13: Total number of trips taken in the last 12 months, both domestic and abroad, 2010 and 2011
                                          • 27 tour operators close over 2011
                                            • Figure 14: ATOL tour operator failures/closures in the UK, October 2010-October 2011
                                          • ASA investigates TripAdvisor for misleading claims
                                            • Figure 15: Unique UK visitors to tripadvisor.co.uk, Q4 2009-Q4 2011
                                          • Google’s Panda update makes novel content more important
                                            • Social buying and discount schemes target travel
                                              • Review sites and hoteliers target mobile device growth
                                                • Figure 16: Electronic products owned by consumers, February 2012
                                              • Greater social network interactions now possible
                                                • Internet penetration increases
                                                  • Figure 17: Broadband penetration, by gender and age, 2006-11
                                              • Broader Market Environment

                                                • Key points
                                                  • GDP growth struggles
                                                    • Figure 18: GDP quarterly percentage change, Q1 2006-Q4 2011
                                                    • Figure 19: GfK NOP Consumer Confidence Index, January 2008-January 2012
                                                  • Increase in AB demographic
                                                    • Figure 20: Forecast adult population trends, by socio-economic group, 2006-16
                                                  • Number of families on the increase
                                                    • Figure 21: Forecast adult population trends, by lifestage, 2006-16
                                                  • Exchange rate continues to suffer
                                                    • Figure 22: Exchange rate for Sterling against the euro, US Dollar and Australian Dollar, 2009-11
                                                    • Figure 23: Post Office Holiday Costs Barometer, 2012 and 2011
                                                • Competitive Context

                                                  • Key points
                                                    • Regular purchase of flights and holidays online falls
                                                      • Figure 24: Holiday/travel purchases made online, 2007-11
                                                    • More consumers plan to book holidays
                                                      • Figure 25: Trends in what consumers have done and what they plan to do with disposable income, July 2011 and February 2012
                                                  • Who’s Innovating?

                                                    • Key points
                                                      • Travelocity Mobile Portal
                                                        • Lastminute.com creates ‘Inspiration’ platform
                                                          • Expedia launches Facebook-based ski app
                                                            • Skyscanner plots flight costs directly to Facebook friends
                                                              • MobilyTrip merges net functionality into a single sharing tool
                                                                • Myvillageinternational.com launches travelling community for executives
                                                                • Market Size and Forecast

                                                                  • Key points
                                                                    • Volume dips as value rises
                                                                      • Figure 26: Value forecasts for holidays bought online, 2007-16
                                                                      • Figure 27: Volume forecasts for holidays booked online, 2007-16
                                                                    • Forecasts
                                                                      • Figure 28: Value forecast of holidays bought online, 2006-16
                                                                      • Figure 29: Volume forecast of holidays bought online, 2006-16
                                                                      • Figure 30: Value forecast of overseas holidays bought online, 2006-16
                                                                      • Figure 31: Volume forecast of overseas holidays bought online, 2006-16
                                                                      • Figure 32: Value forecast of domestic holidays bought online, 2006-16
                                                                      • Figure 33: Volume forecast of domestic holidays bought online, 2006-16
                                                                    • Forecast Methodology
                                                                    • Segment Performance

                                                                      • Key points
                                                                        • UK popular with online bookers
                                                                          • Figure 34: Destinations visited on holiday, 2011
                                                                        • Online for others
                                                                          • Figure 35: Types of trips booked, 2011
                                                                      • Market Share

                                                                        • Key points
                                                                          • TUI group tops travel websites
                                                                            • Figure 36: Top UK travel websites, by unique monthly visitors, January 2010-January 2012
                                                                          • Price comparison sites and aggregators see strong growth
                                                                            • Figure 37: Top ten online travel agents, by unique monthly visitors, January 2010-January 2012
                                                                          • Top online travel information websites
                                                                            • Figure 38: Top ten online travel information services, by unique monthly users, January 2010-January 2012
                                                                        • Companies and Products

                                                                            • Larger companies
                                                                              • Skyscanner
                                                                                • Figure 39: Key financial data for Skyscanner limited, 2010 and 2011
                                                                              • Gogobot
                                                                                • Viator
                                                                                  • TripIt
                                                                                      • Figure 40: Key financial data for Concur Technologies Inc, 2009 and 2010
                                                                                    • Expedia
                                                                                        • Figure 41: Key financial data for Expedia.com Limited, 2009 and 2010
                                                                                      • Kayak.com
                                                                                        • TripAdvisor
                                                                                            • Figure 42: Key financial data for TripAdvisor Limited, 2009 and 2010
                                                                                          • WAYN
                                                                                            • Bing Travel
                                                                                                • Figure 43: Key financial data of Microsoft’s Online Services Division (OSD), 2010 and 2011
                                                                                              • Travelblog.org
                                                                                                • Smaller companies
                                                                                                  • HomeAway
                                                                                                    • Travelzoo
                                                                                                      • VirtualTourist
                                                                                                      • Booking Online

                                                                                                        • Key points
                                                                                                          • Seven in ten holidaymakers book entirely online
                                                                                                            • Figure 44: Holiday booking online by consumers who had taken a holiday in the last 12 months, February 2012
                                                                                                            • Figure 45: Types and duration of breaks taken, by holiday booked on the internet, February 2012
                                                                                                          • Younger and older online bookers
                                                                                                            • Traditional online divides
                                                                                                            • Online Booking Services

                                                                                                              • Key points
                                                                                                                • Internet-only travel sites more popular than high street agents’ websites
                                                                                                                  • Figure 46: Internet services used to book online holiday elements, February 2012
                                                                                                                • Comparison and deal-based sites hold equal appeal
                                                                                                                  • Youngest consumers visit familiar online presences
                                                                                                                    • Comparison sites and company websites form a potent team
                                                                                                                      • Four in ten bookers who review websites also use comparison sites
                                                                                                                      • Attitudes towards Bookings Holidays Online

                                                                                                                        • Key points
                                                                                                                          • Figure 47: Attitudes towards booking holidays online, February 2012
                                                                                                                        • Few believe travel agents are well informed
                                                                                                                          • Younger consumers more reckless, but desire a safety net
                                                                                                                            • Parents more likely to rely on travel agents
                                                                                                                              • Package and outside-Europe breaks cheaper online?
                                                                                                                                • Trust in travel agents translates to group buying websites
                                                                                                                                • Attitudes towards Researching Holidays Online

                                                                                                                                  • Key points
                                                                                                                                    • Tourism boards remain well respected
                                                                                                                                      • Figure 48: Attitudes towards researching holidays online, February 2012
                                                                                                                                    • Under half of consumers agree that review sites are trustworthy
                                                                                                                                      • Professional travel blogs lack personal touch
                                                                                                                                        • Younger, richer consumers favour printed guides
                                                                                                                                          • Younger men more likely to pay website for information
                                                                                                                                            • Potential purchasers favour independent holidays…
                                                                                                                                              • …as well as internet-only travel agencies
                                                                                                                                                • Information buyers likely to trust agents
                                                                                                                                                • Digital Activities on Holiday

                                                                                                                                                  • Key points
                                                                                                                                                    • A quarter of consumers use social network sites on holiday
                                                                                                                                                      • Figure 49: Digital activity during and after holidays, February 2012
                                                                                                                                                    • Consumers significantly more likely to leave reviews at home
                                                                                                                                                      • Smartphone-centric activities mostly performed by younger consumers
                                                                                                                                                        • Figure 50: Use of media sharing sites, mobile apps related to holiday destinations and instant messaging services whilst on holiday, by age, February 2012
                                                                                                                                                      • Posting a review online after holiday engages older consumers
                                                                                                                                                        • Figure 51: Online activities performed on return from holidays, by age, February 2012
                                                                                                                                                      • Overseas trips more likely to involve simple digital activities
                                                                                                                                                      • Target Groups – Holidays on the Internet

                                                                                                                                                        • Key points
                                                                                                                                                          • Figure 52: Target groups, February 2012
                                                                                                                                                        • Prefer Professionals
                                                                                                                                                          • Key characteristics
                                                                                                                                                            • Who are they?
                                                                                                                                                              • Marketing message
                                                                                                                                                                • Website Wanderers
                                                                                                                                                                  • Key characteristics
                                                                                                                                                                    • Who are they?
                                                                                                                                                                      • Marketing message
                                                                                                                                                                        • Traditional Tourists
                                                                                                                                                                          • Key characteristics
                                                                                                                                                                            • Who are they?
                                                                                                                                                                              • Marketing message
                                                                                                                                                                              • Appendix – Booking Online

                                                                                                                                                                                  • Figure 53: Proportion of holiday booked online, February 2012
                                                                                                                                                                                  • Figure 54: Most popular type of holiday booked online, by demographics, February 2012
                                                                                                                                                                                  • Figure 55: Next most popular type of holiday booked online, by demographics, February 2012
                                                                                                                                                                                  • Figure 56: Other holidays booked online, by demographics, February 2012
                                                                                                                                                                              • Appendix – Online Booking Services

                                                                                                                                                                                  • Figure 57: Online booking services used, February 2012
                                                                                                                                                                                  • Figure 58: Proportion of holiday booked online, by most popular online booking services used, February 2012
                                                                                                                                                                                  • Figure 59: Proportion of holiday booked online, by next most popular online booking services used, February 2012
                                                                                                                                                                                  • Figure 60: Online booking services used, by most popular online booking services used, February 2012
                                                                                                                                                                                  • Figure 61: Online booking services used, by next most popular online booking services used, February 2012
                                                                                                                                                                                  • Figure 62: Most popular online booking services used, by demographics, February 2012
                                                                                                                                                                                  • Figure 63: Next most popular online booking services used, by demographics, February 2012
                                                                                                                                                                              • Appendix – Attitudes towards Booking Holiday Online

                                                                                                                                                                                  • Figure 64: Attitudes towards booking holidays online, February 2012
                                                                                                                                                                                  • Figure 65: Type of holiday booked online, by attitudes towards booking holidays online, February 2012
                                                                                                                                                                                  • Figure 66: Type of holiday booked online, by proportion of holiday booked online, February 2012
                                                                                                                                                                                  • Figure 67: Online booking services used, by most popular attitudes towards booking holidays online, February 2012
                                                                                                                                                                                  • Figure 68: Online booking services used, by next most popular attitudes towards booking holidays online, February 2012
                                                                                                                                                                                  • Figure 69: Attitudes towards booking holidays online, by most popular attitudes towards booking holidays online, February 2012
                                                                                                                                                                                  • Figure 70: Attitudes towards booking holidays online, by next most popular attitudes towards booking holidays online, February 2012
                                                                                                                                                                                  • Figure 71: Most popular attitudes towards booking holidays online, by demographics, February 2012
                                                                                                                                                                                  • Figure 72: Next most popular attitudes towards booking holidays online, by demographics, February 2012
                                                                                                                                                                                  • Figure 73: Agreement with the statements ‘I trust travel blogs or online guides written by professional journalists/writers’ and ‘I trust printed travel guides’, by demographics, February 2012
                                                                                                                                                                                  • Figure 74: Agreement with the statements ‘In general, I trust reviews written by other holidaymakers on review sites’ and ‘Tourism board websites are good sources of travel information’, by demographics, February 2012
                                                                                                                                                                                  • Figure 75: Agreement with the statements ‘Travel blogs contain accurate and up to date information about holiday destinations’ and ‘I would pay a website to download an extensive travel report on a particular location I was interested in’, by demographics, February 2012
                                                                                                                                                                              • Appendix – Attitudes towards Researching Holidays Online

                                                                                                                                                                                  • Figure 76: Attitudes towards researching holidays online, February 2010
                                                                                                                                                                                  • Figure 77: Proportion of holiday booked online, by attitudes towards researching holidays online, February 2012
                                                                                                                                                                                  • Figure 78: Online booking services used, by attitudes towards researching holidays online, February 2012
                                                                                                                                                                                  • Figure 79: Attitudes towards booking holidays online, by attitudes towards researching holidays online, February 2012
                                                                                                                                                                                  • Figure 80: Attitudes towards researching holidays online, by attitudes towards researching holidays online, February 2012
                                                                                                                                                                                  • Figure 81: Agreement with the statements ‘I trust travel blogs or online guides written by professional journalists/writers’ and ‘I trust printed travel guides’, by demographics, February 2012
                                                                                                                                                                                  • Figure 82: Agreement with the statements ‘In general, I trust reviews written by other holidaymakers on review sites’ and ‘Tourism board websites are good sources of travel information’, by demographics, February 2012
                                                                                                                                                                                  • Figure 83: Agreement with the statements ‘Travel blogs contain accurate and up to date information about holiday destinations’ and ‘I would pay a website to download an extensive travel report on a particular location I was interested in’, by demographics, February 2012
                                                                                                                                                                              • Appendix – Digital Activities on Holiday

                                                                                                                                                                                  • Figure 84: Digital activity during and after holidays, January 2012
                                                                                                                                                                                  • Figure 85: Proportion of holiday booked online, by most popular digital activity whilst on holidays, January 2012
                                                                                                                                                                                  • Figure 86: Proportion of holiday booked online, by next most popular digital activity whilst on holidays, January 2012
                                                                                                                                                                                  • Figure 87: Proportion of holiday booked online, by digital activity performed after holidays, January 2012
                                                                                                                                                                                  • Figure 88: Online services used, by most popular digital activity whilst on holiday, January 2012
                                                                                                                                                                                  • Figure 89: Online services used, by next most popular digital activity whilst on holiday, January 2012
                                                                                                                                                                                  • Figure 90: Online services used, by digital activity after holidays, January 2012
                                                                                                                                                                                  • Figure 91: Digital activity during and after holidays, by target groups, January 2012
                                                                                                                                                                                  • Figure 92: Most popular digital activity whilst on holidays, by demographics, January 2012
                                                                                                                                                                                  • Figure 93: Next most popular digital activity whilst on holidays, by demographics, January 2012
                                                                                                                                                                                  • Figure 94: Most popular digital activity after holidays, by demographics, January 2012
                                                                                                                                                                                  • Figure 95: Next most popular digital activity after holidays, by demographics, January 2012
                                                                                                                                                                              • Appendix – Further Analysis

                                                                                                                                                                                  • Figure 96: Attitudes towards researching holidays online, by target groups, February 2012
                                                                                                                                                                                  • Figure 97: Digital activity during and after holidays, by target groups, February 2012
                                                                                                                                                                                  • Figure 98: Online booking services used, by target groups, February 2012
                                                                                                                                                                                  • Figure 99: Attitudes towards booking holidays online, by target groups, February 2012
                                                                                                                                                                                  • Figure 100: Proportion of holiday booked online, by target groups, February 2012
                                                                                                                                                                                  • Figure 101: Target groups, by demographics, February 2012

                                                                                                                                                                              Companies Covered

                                                                                                                                                                              • Advertising Standards Authority
                                                                                                                                                                              • Avis Budget Group, Inc.
                                                                                                                                                                              • Expedia.co.uk
                                                                                                                                                                              • Facebook, Inc.
                                                                                                                                                                              • Google UK
                                                                                                                                                                              • Google, Inc.
                                                                                                                                                                              • HomeAway Inc
                                                                                                                                                                              • Hotwire
                                                                                                                                                                              • Kayak Software Corporation
                                                                                                                                                                              • LinkedIn
                                                                                                                                                                              • Microsoft Corporation
                                                                                                                                                                              • Orbitz Inc.
                                                                                                                                                                              • Research in Motion Uk Ltd.
                                                                                                                                                                              • Travelocity.com L.P.
                                                                                                                                                                              • Travelzoo (Europe) Ltd
                                                                                                                                                                              • Travolution
                                                                                                                                                                              • TripAdvisor LLC
                                                                                                                                                                              • TripIt
                                                                                                                                                                              • Twitter, Inc.
                                                                                                                                                                              • Viator

                                                                                                                                                                              Holidays on the Internet - UK - April 2012

                                                                                                                                                                              £1,995.00 (Excl.Tax)