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Online Travel Aggregators - UK - June 2018

“Online travel aggregators have maintained their dominant position in the travel industry, though they are struggling to promote brand loyalty in a market where consumers are willing to shop around to find the best deals. These sites are therefore pushing to improve organic site visits and the customer-brand relationship by taking on more of a travel agent role – selling packages and additional extras to make holiday planning as streamlined as possible.”
– Andrew Moss, Consumer Technology Analyst

This Report looks at the following areas:

  • Increasing OTA access points
  • Increasing loyalty in OTAs

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Table of contents

  1. Overview

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

          • The market
            • Online takes the lion’s share of holiday bookings
              • OTAs the leading single booking channel
                • Figure 1: Estimated number of people who booked a holiday online, by channel, 2017
              • Holiday planning cycle remains consistent
                • Figure 2: Consumer plans to book a holiday within the next three months, June 2012-March 2018
              • Income squeeze abates as wage growth overtakes inflation
                • Figure 3: Average wage growth and consumer price inflation, March 2014-March 2018
              • OTA usage remains stable
                • Monarch collapse prompts investigation into traveller protections
                  • Digital assistants increasing presence in the home
                    • Social competes for space in the booking process…
                      • …but search is better placed to serve holidaymakers
                        • The travel app economy continues to grow
                          • Figure 4: Total downloads in the UK for apps in the Travel category on the iOS App Store and the Travel & Local category on Google Play combined, 2015-17
                          • Figure 5: Total time spent in the Travel & Local category on Android* phones in the UK, 2015-17
                          • Figure 6: Total sessions in apps in the Travel & Local category on Android* phones in the UK, 2015-17
                        • Companies and brands
                          • Booking.com increases penetration in the OTA market
                            • Expedia group second-largest supplier of OTA services
                              • TripAdvisor expands its reach as an OTA
                                • Figure 7: Market penetration of travel comparison websites/apps, based on online holiday booking behaviour in the last 12 months, April 2018
                              • Travellers embrace OTA apps
                                • Figure 8: Ranking of top OTA apps according to average monthly active users on iPhone and Android phones in the UK, 2017
                              • Expedia adds concert tickets to its platform
                                • Customers get more transparency from a Holiday Value Index tool
                                  • Facebook advertising targets those considering travel
                                    • Trivago continues to dominate advertising spend
                                      • Figure 9: Total above-the-line, online display and direct mail advertising expenditure on online travel/booking agents, by advertiser, 2017
                                    • The consumer
                                      • Online remains most popular booking channel
                                        • Figure 10: Ways in which consumers booked their holidays in the last 12 months, April 2018
                                      • Converting research into bookings
                                        • Figure 11: Providers used to research and book holidays online in the last 12 months, April 2018
                                      • OTAs a popular option for short-haul trips
                                        • Figure 12: Type of holiday most recently booked via travel comparison websites/apps, April 2018
                                      • At least 48% of holidays abroad are not ATOL protected
                                        • Accommodation-only bookings reserved for UK trips
                                          • Figure 13: Services booked via travel comparison websites/apps for the most recent holiday, by type of holiday booked, April 2018
                                        • Laptops and desktops remain the preferred option for holiday bookings
                                          • Figure 14: Devices used for research and booking holidays via travel comparison websites/apps, April 2018
                                        • Consumers compare their comparison sites
                                          • Consumers receptive to reward schemes
                                            • Figure 15: Consumer behaviour related to travel comparison sites/apps, April 2018
                                          • Protections available to holidaymakers
                                            • Chatbots may change the holiday booking process
                                              • An activity-first search appeals to over half of consumers
                                                • Travellers are engaged in the holiday planning process
                                                  • Figure 16: Attitudes towards holiday planning and booking processes, April 2018
                                                • Consumers still perceive OTAs as better value than traditional travel agents
                                                  • Piecemeal booking styles seems here to stay
                                                    • What we think
                                                    • Issues and Insights

                                                      • Increasing OTA access points
                                                        • The facts
                                                          • The implications
                                                            • Increasing loyalty in OTAs
                                                              • The facts
                                                                • The implications
                                                                • The Market – What You Need to Know

                                                                  • Online takes the lion’s share of holiday bookings
                                                                    • OTAs the leading single booking channel
                                                                      • Holiday planning cycle remains consistent
                                                                        • Income squeeze abates as wage growth overtakes inflation
                                                                          • OTA usage remains steady but tour operator use spikes
                                                                            • Monarch collapse prompts investigation into traveller protections
                                                                              • Digital assistants increasing presence in the home
                                                                                • Social competes for space in the booking process
                                                                                  • Search is better placed to serve holidaymakers
                                                                                    • The travel app economy continues to grow
                                                                                    • Market Size and Segmentation

                                                                                      • Online takes the lion’s share of holiday bookings
                                                                                        • Figure 17: Estimated number of people who booked a holiday, 2017
                                                                                      • OTAs the leading single booking channel
                                                                                        • Figure 18: Estimated number of people who booked a holiday online, by channel, 2017
                                                                                    • Market Background and Drivers

                                                                                      • Holiday planning cycle remains consistent
                                                                                        • Figure 19: Consumer plans to book a holiday within the next three months, June 2012-March 2018
                                                                                      • Income squeeze abates as wage growth overtakes inflation
                                                                                        • Figure 20: Average wage growth and consumer price inflation, March 2014-March 2018
                                                                                      • OTA usage remains steady but tour operator use spikes
                                                                                        • Figure 21: Websites/apps used to book holiday, 2015-18
                                                                                      • CMA investigates OTA selling practices
                                                                                        • Monarch collapse prompts investigation into traveller protections
                                                                                          • Digital assistants increasing presence in the home
                                                                                            • Social competes for space in the booking process…
                                                                                              • …but search is better placed to serve holidaymakers
                                                                                                • Figure 22: Google’s integrated hotel booking option in search
                                                                                              • The travel app economy continues to grow
                                                                                                • Figure 23: Total downloads in the UK for apps in the Travel category on the iOS App Store and the Travel & Local category on Google Play combined, 2015-17
                                                                                                • Figure 24: Total time spent in the Travel & Local category on Android* phones in the UK, 2015-17
                                                                                                • Figure 25: Total sessions in apps in the Travel & Local category on Android* phones in the UK, 2015-17
                                                                                              • Airline and direct booking apps competing with OTAs
                                                                                              • Companies and Brands – What You Need to Know

                                                                                                • Booking has highest penetration in the OTA market
                                                                                                  • Expedia Group second-largest supplier of OTA services
                                                                                                    • TripAdvisor expands its reach
                                                                                                      • Travellers embrace OTA apps
                                                                                                        • Expedia adds concert tickets to its platform
                                                                                                          • Expedia offers Holiday Value Index tool
                                                                                                            • Thomas Cook announces strategic alliance with Expedia
                                                                                                              • TripAdvisor launches Sponsored Placements
                                                                                                                • Trivago continues to dominate advertising spend
                                                                                                                • Market Share

                                                                                                                  • Booking.com increases penetration in the OTA market
                                                                                                                    • Expedia group second-largest supplier of OTA services
                                                                                                                      • TripAdvisor expands its reach as an OTA
                                                                                                                        • Figure 26: Market penetration of travel comparison websites/apps, based on online holiday booking behaviour in the last 12 months, April 2018
                                                                                                                      • Travellers embrace OTA apps
                                                                                                                        • Figure 27: Ranking of top OTA apps according to average monthly active users on iPhone and Android phones in the UK, 2017
                                                                                                                    • Launch Activity and Innovation

                                                                                                                      • Expedia adds concert tickets to its platform
                                                                                                                        • Customers get more transparency from a Holiday Value Index tool
                                                                                                                          • Thomas Cook announces strategic alliance with Expedia
                                                                                                                            • Facebook advertising targets those considering travel
                                                                                                                              • TripAdvisor launches Sponsored Placements
                                                                                                                              • Advertising and Marketing Activity

                                                                                                                                • Advertising continues its move to digital
                                                                                                                                  • Figure 28: Total above-the-line, online display and direct mail advertising expenditure on online travel/booking agents, by media type, 2015-17
                                                                                                                                • Trivago continues to dominate advertising spend
                                                                                                                                  • Figure 29: Total above-the-line, online display and direct mail advertising expenditure on online travel/booking agents, by advertiser, 2017
                                                                                                                                • Nielsen Ad Intel coverage
                                                                                                                                • Brand Research

                                                                                                                                    • Brand map
                                                                                                                                      • Figure 30: Attitudes towards and usage of selected brands, April 2018
                                                                                                                                    • Key brand metrics
                                                                                                                                      • Figure 31: Key metrics for selected brands, April 2018
                                                                                                                                    • Brand attitudes: TripAdvisor leads in consumer trust and perception of quality
                                                                                                                                      • Figure 32: Attitudes, by brand, April 2018
                                                                                                                                    • Brand personality: Trivago and TripAdvisor seen as fun options
                                                                                                                                      • Figure 33: Brand personality – Macro image, April 2018
                                                                                                                                    • Hotels.com lowest across brands in perceptions of reliability and efficiency
                                                                                                                                      • Figure 34: Brand personality – Micro image, April 2018
                                                                                                                                    • Brand analysis
                                                                                                                                      • TripAdvisor’s extensive reviews make place it the most-used brand overall
                                                                                                                                        • Figure 35: User profile of TripAdvisor, April 2018
                                                                                                                                      • Booking.com’s market leading position driven by its efficient focus on value
                                                                                                                                        • Figure 36: User profile of Booking.com, April 2018
                                                                                                                                      • Expedia playing catch-up to Booking.com and Trivago in terms of brand image
                                                                                                                                        • Figure 37: User profile of Expedia, April 2018
                                                                                                                                      • Marketing effectively boosts Trivago’s appeal and reach
                                                                                                                                        • Figure 38: User profile of Trivago, April 2018
                                                                                                                                      • Hotels.com suffers from a lack of perceived trust and innovativeness
                                                                                                                                        • Figure 39: User profile of Hotels.com, April 2018
                                                                                                                                    • The Consumer – What You Need to Know

                                                                                                                                      • Online remains most popular booking channel
                                                                                                                                        • Converting research into bookings
                                                                                                                                          • OTAs a popular option for short-haul trips
                                                                                                                                            • A third of most recent holidays were packages
                                                                                                                                              • Laptops and desktops remain the preferred option for holiday bookings
                                                                                                                                                • Consumers compare their comparison sites
                                                                                                                                                  • Consumers receptive to reward schemes
                                                                                                                                                    • Chatbots may change the holiday booking process
                                                                                                                                                      • An activity-first search appeals to over half of consumers
                                                                                                                                                        • Travellers are engaged in the holiday planning process
                                                                                                                                                          • Piecemeal holiday booking looks likely to stay
                                                                                                                                                          • Holiday Booking Channels

                                                                                                                                                            • Online remains most popular booking channel
                                                                                                                                                              • Figure 40: Proportion of consumers who booked a holiday in the last 12 months, April 2018
                                                                                                                                                              • Figure 41: Ways in which consumers booked their holidays in the last 12 months, April 2018
                                                                                                                                                            • Converting research into bookings
                                                                                                                                                              • Adding complexity to the booking process
                                                                                                                                                                • Figure 42: Providers used to research and book holidays online in the last 12 months, April 2018
                                                                                                                                                              • Travel comparison favours a younger market…
                                                                                                                                                                • Figure 43: Providers used to research and book holidays online in the last 12 months, by age, April 2018
                                                                                                                                                            • Holidays Booked through Online Travel Aggregators

                                                                                                                                                              • OTAs a popular option for short-haul trips
                                                                                                                                                                • Figure 44: Type of holiday most recently booked via travel comparison websites/apps, April 2018
                                                                                                                                                              • A third of most recent holidays were packages
                                                                                                                                                                • At least 48% of holidays abroad are not ATOL protected
                                                                                                                                                                  • Accommodation-only bookings reserved for UK trips
                                                                                                                                                                    • Figure 45: Services booked via travel comparison websites/apps for the most recent holiday, April 2018
                                                                                                                                                                    • Figure 46: Services booked via travel comparison websites/apps for the most recent holiday, by type of holiday booked, April 2018
                                                                                                                                                                • Devices Used to Access Online Travel Aggregators

                                                                                                                                                                  • Laptops and desktops remain the preferred option for holiday bookings
                                                                                                                                                                    • Mobile becomes a viable option for booking
                                                                                                                                                                      • Figure 47: Devices used for research and booking holidays via travel comparison websites/apps, April 2018
                                                                                                                                                                  • Booking Behaviour on Online Travel Aggregators

                                                                                                                                                                    • Consumers compare their comparison sites
                                                                                                                                                                      • Figure 48: Repertoire of comparison websites/apps used to book holidays, April 2018
                                                                                                                                                                    • Consumers receptive to reward schemes
                                                                                                                                                                      • Loyalty schemes appeal more to higher economic groups
                                                                                                                                                                        • Figure 49: Consumer behaviour related to travel comparison sites/apps, April 2018
                                                                                                                                                                      • Protections available to holidaymakers
                                                                                                                                                                        • Chatbots may change the holiday booking process
                                                                                                                                                                        • Attitudes towards Online Travel Aggregators

                                                                                                                                                                          • An activity-first search appeals to over half of consumers
                                                                                                                                                                            • Travellers are engaged in the holiday planning process
                                                                                                                                                                                • Figure 50: Attitudes towards holiday planning and booking processes, April 2018
                                                                                                                                                                              • Consumers still perceive OTAs as better value than traditional travel agents
                                                                                                                                                                                • Figure 51: Attitudes towards the value of deals from comparison sites, by age, April 2018
                                                                                                                                                                              • Piecemeal booking styles seems here to stay
                                                                                                                                                                              • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                  • Abbreviations
                                                                                                                                                                                    • Consumer research methodology

                                                                                                                                                                                    Online Travel Aggregators - UK - June 2018

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