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Online Travel Aggregators - UK - June 2017

“The consumer journey in travel is not linear but rather cyclical, with consumers’ past experiences feeding through to and influencing their next decisions as well as those of other consumers. Referral programmes and social media competitions that encourage users to tell their friends about a travel brand can thus help to transform previous positive experiences and familiarity with the brand from being just a driver of individual brand loyalty into social advocacy that drives bookings among other consumers too.”
– Sara Ballaben, Senior Technology Analyst

This report answers the following:

  • Can social media ads help to drive mobile bookings?
  • Is real-time in-destination assistance the next big thing?

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Close to four in 10 holidaymakers have booked via an OTA
              • Figure 1: Estimated number of people who booked a holiday online, by channel, 2016
            • The travel market is increasingly mobile
              • Companies and brands
                • Above-the-line adspend on OTAs grows 25% in 2016
                  • Figure 2: Total above-the line, online display and direct mail advertising expenditure on online travel/booking agents, by advertiser, 2016
                • Half of OTA bookers used Booking.com
                  • Figure 3: Travel comparison websites/apps used to book holidays online in the last 12 months, February 2017
                  • Figure 4: Ranking of top OTA apps according to average monthly active users on iPhone and Android Phone in the UK, 2016
                • TripAdvisor’s review-based business model drives differentiation and trust
                  • Figure 5: Attitudes towards and usage of selected brands, March 2017
                • The consumer
                  • Holiday-makers prefer to book online
                    • Figure 6: Ways in which consumers booked their holidays in the last 12 months, February 2017
                  • Travel comparison platforms are central to holiday researching and booking
                    • Figure 7: Providers used to research and book holidays online in the last 12 months, February 2017
                  • Short breaks in the UK are the most booked via OTAs
                    • Figure 8: Type of holiday most recently booked via travel comparison websites/apps, February 2017
                  • Consumers mostly booking as package holiday
                    • Figure 9: Services booked via travel comparison websites/apps for the most recent holiday, February 2017
                  • Laptops are the most common device to book a holiday via OTAs
                    • Figure 10: Devices used to research and book the most recent holiday through travel comparison websites/apps, February 2017
                  • Holiday-makers seek the best of both worlds
                    • Figure 11: Types of additional information consumers would like to receive when booking holidays online, February 2017
                  • Price is the biggest pull factor when choosing booking platform
                    • Figure 12: Most important factors when choosing where to book a holiday online, February 2017
                  • What we think
                  • Issues and Insights

                    • Can social media ads help to drive mobile bookings?
                      • The facts
                        • The implications
                          • Is real-time in-destination assistance the next big thing?
                            • The facts
                              • The implications
                              • The Market – What You Need to Know

                                • Close to 36 million UK adults booked a holiday in 2016
                                  • Close to four in 10 holidaymakers have booked via an OTA
                                    • The travel market is increasingly mobile
                                      • Positive market outlook ahead but an income squeeze appears imminent
                                        • Post-Brexit uncertainty a likely driver of OTA usage spike
                                          • Brexit could revive staycation effect
                                            • Changing dynamics in the competitive landscape
                                              • Holiday booking becomes more social
                                              • Market Size and Segmentation

                                                • Close to 36 million UK adults booked a holiday in 2016
                                                  • Figure 13: Estimated number of people who booked a holiday, 2016
                                                • Close to four in 10 holidaymakers have booked via an OTA
                                                  • Figure 14: Estimated number of people who booked a holiday online, by channel, 2016
                                                • The travel market is increasingly mobile
                                                • Market Drivers

                                                  • Positive market outlook ahead
                                                    • Figure 15: Consumer plans to book a holiday within the next three months, April 2013-17
                                                  • But an income squeeze appears imminent
                                                    • Figure 16: Average wage growth and consumer price inflation, 2007-2017
                                                  • Post-Brexit uncertainty a likely driver of OTA usage spike
                                                    • Figure 17: Websites/apps used to book holiday, March 2017
                                                    • Figure 18: Holiday behaviour following the Brexit vote, March 2017
                                                  • Brexit could revive staycation effect
                                                    • Figure 19: Estimated holiday market volume, by domestic and overseas, 2011-2018
                                                  • Changing dynamics in the competitive landscape
                                                    • The Priceline Group invests aggressively …
                                                      • … while Expedia also expands
                                                        • Metasearch vs direct bookings
                                                          • Holiday booking becomes more social
                                                            • Figure 20: Usage of selected research sources when booking a holiday, by age, March 2017
                                                        • Companies and Brands – What You Need to Know

                                                          • Half of OTA bookers used Booking.com
                                                            • Google’s increasing activity in the travel market
                                                              • Facebook harnesses user data to provide travel recommendations …
                                                                • … and facilitates travel ads
                                                                  • Skyscanner partners with Finnair for direct bookings
                                                                    • Above-the-line adspend on OTAs grows 25% in 2016
                                                                      • TV ads accounted for £3 of every £4 spent on above-the-line advertising in 2016
                                                                        • Trivago accounted for a quarter of total monitored adspend
                                                                          • TripAdvisor’s review-based business model drives differentiation and trust
                                                                            • trivago outperforms other Expedia brands
                                                                            • Market Share

                                                                              • Half of OTA bookers used Booking.com
                                                                                • Figure 21: Travel comparison websites/apps used to book holidays online in the last 12 months, February 2017
                                                                              • Booking.com shows consistent multi-channel strategy
                                                                                • Figure 22: Ranking of top OTA apps according to average monthly active users on iPhone and Android Phone in the UK, 2016
                                                                            • Launch Activity and Innovation

                                                                              • Google’s increasing activity in the travel market
                                                                                • Figure 23: Google Destinations, March 2016
                                                                                • Figure 24: Google Trip features, May 2017
                                                                              • Facebook harnesses user data to provide travel recommendations …
                                                                                • Figure 25: Facebook’s City Guides, May 2017
                                                                                • Figure 26: Facebook recommendations, May 2017
                                                                              • … partners with airlines …
                                                                                • Figure 27: KLM’s flight information via Facebook Messenger, May 2017
                                                                                • Figure 28: KLM’s emoji service, May 2017
                                                                              • … and facilitates travel ads
                                                                                • Figure 29: An example of Facebook’s Dynamic Ads for Travel, May 2017
                                                                              • Skyscanner partners with Finnair for direct bookings
                                                                                • Figure 30: Direct booking of Finnair flights on Skyscanner
                                                                            • Advertising and Marketing Activity

                                                                              • Above-the-line adspend on OTAs grows 25% in 2016
                                                                                • TV ads accounted for £3 of every £4 spent on above-the-line advertising in 2016
                                                                                  • Figure 31: Total above-the line, online display and direct mail advertising expenditure on online travel/booking agents, by media type, 2015 and 2016
                                                                                • Trivago accounted for a quarter of total monitored adspend
                                                                                  • Figure 32: Total above-the line, online display and direct mail advertising expenditure on online travel/booking agents, by advertiser, 2016
                                                                                • Nielsen Ad Intel coverage
                                                                                • Brand Research

                                                                                    • Brand map
                                                                                      • Figure 33: Attitudes towards and usage of selected brands, March 2017
                                                                                    • Key brand metrics
                                                                                      • Figure 34: Key metrics for selected brands, March 2017
                                                                                    • Brand attitudes: trivago’s ad campaign helps to set brand apart from competitors
                                                                                      • Figure 35: Attitudes, by brand, March 2017
                                                                                    • Brand personality: Hotels.com could be at risk of falling behind
                                                                                      • Figure 36: Brand personality – macro image, March 2017
                                                                                    • Booking.com has most well-rounded image
                                                                                      • Figure 37: Brand personality – micro image, March 2017
                                                                                    • Brand analysis
                                                                                      • TripAdvisor’s review-based business model drives differentiation and trust
                                                                                        • Figure 38: User profile of TripAdvisor, March 2017
                                                                                      • trivago’s TV campaign is driving upbeat image
                                                                                        • Figure 39: User profile of trivago, March 2017
                                                                                      • Booking.com shows well-rounded image centred on flexibility
                                                                                        • Figure 40: User profile of Booking.com, March 2017
                                                                                      • Expedia’s focus on package deals appears to limit its target audience
                                                                                        • Figure 41: User profile of Expedia, March 2017
                                                                                      • Hotels.com seems to be falling behind
                                                                                        • Figure 42: User profile of Hotels.com, March 2017
                                                                                    • The Consumer – What You Need to Know

                                                                                      • Holiday-makers prefer to book online
                                                                                        • Travel comparison platforms are central to holiday researching and booking
                                                                                          • Short breaks in the UK are the most booked via OTAs
                                                                                            • Consumers mostly booking as package holiday
                                                                                              • Laptops are the most common device to book a holiday via OTAs
                                                                                                • Holiday-makers seek the best of both worlds
                                                                                                  • Price is the biggest pull factor when choosing booking platform
                                                                                                  • Holiday Booking Preferences

                                                                                                    • Holiday-makers prefer to book online
                                                                                                      • Figure 43: Ways in which consumers booked their holidays in the last 12 months, February 2017
                                                                                                    • Travel comparison platforms are central to holiday researching and booking
                                                                                                      • Figure 44: Providers used to research and book holidays online in the last 12 months, February 2017
                                                                                                    • Tour operators holding their ground
                                                                                                      • Online travel aggregators and the luxury travel market
                                                                                                          • Figure 45: Providers used to book holidays online in the last 12 months, by annual household income, February 2017
                                                                                                        • The appeal of the one-stop shop proposition
                                                                                                          • Figure 46: Providers used to research holidays online in the last 12 months, by repertoire of providers used to research holidays online in the last 12 months, February 2017
                                                                                                      • Holidays Booked through Travel Comparison Websites/Apps

                                                                                                        • Short breaks in the UK are the most booked via OTAs
                                                                                                          • Figure 47: Type of holiday most recently booked via travel comparison websites/apps, February 2017
                                                                                                        • Consumers mostly booking as package holiday
                                                                                                          • Figure 48: Services booked via travel comparison websites/apps for the most recent holiday, February 2017
                                                                                                      • Devices Used to Visit Travel Comparison Websites/ Apps

                                                                                                        • Laptops are the most common device to book a holiday via OTAs
                                                                                                          • Figure 49: Devices used to research and book the most recent holiday through travel comparison websites/apps, February 2017
                                                                                                        • OTAs show a fragmented path to purchase
                                                                                                          • Figure 50: Proportion of consumers who have researched and booked the most recent holiday through travel comparison websites/apps on the same device, February 2017
                                                                                                          • Figure 51: Devices used to research the most recent holiday through travel comparison websites/apps, by devices used to research the most recent holiday through travel comparison websites/apps, February 2017
                                                                                                        • Holiday type impacts device choice for booking
                                                                                                          • Figure 52: Devices used to book the most recent holiday through travel comparison websites/apps, by type of holiday most recently booked via travel comparison websites/apps, February 2017
                                                                                                      • Additional Information When Booking Holidays Online

                                                                                                        • Holiday makers seek the best of both worlds
                                                                                                          • Figure 53: Types of additional information consumers would like to receive when booking holidays online, February 2017
                                                                                                        • OTAs hoping to monetise information
                                                                                                          • The quest for an authentic experience
                                                                                                            • The real-time enabler: Instant Apps
                                                                                                              • A focus on safety could convert in-person bookers
                                                                                                                  • Figure 54: Types of additional information consumers would like to receive when booking holidays online, by ways in which consumers booked their holidays in the last 12 months, February 2017
                                                                                                              • Important Factors when Choosing Booking Platform

                                                                                                                • Price is the biggest pull factor when choosing booking platform
                                                                                                                  • Figure 55: Most important factors when choosing where to book a holiday online, February 2017
                                                                                                                • Could financial protection become a deal-breaker?
                                                                                                                  • Converting loyalty into social advocacy
                                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                      • Abbreviations
                                                                                                                        • Brand research
                                                                                                                          • Brand map

                                                                                                                          Companies Covered

                                                                                                                          To learn more about the companies covered in this report please contact us.

                                                                                                                          Online Travel Aggregators - UK - June 2017

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