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Description

Description

Covered in this report

With travel continuing to be popular, the travel arrangement and reservations industry hit nearly $56 billion in revenue in 2019. Travel is an important component of leisure spending and is forecast for further growth; however, aggregators that facilitate search and booking are seeing a lot of competition from direct providers and metasearch engines, which will likely dampen revenues for OTAs in the future. Booking habits are changing, most notably in that booking lead times are getting shorter, and OTAs appear to have been slower than direct booking competitors in addressing these changes.

"With travel continuing to be popular, the travel arrangement and reservations industry hit nearly $56 billion in revenue in 2019. Travel is an important component of leisure spending and is forecast for further growth; however, aggregators that facilitate search and booking are seeing a lot of competition from direct providers and metasearch engines, which will likely dampen revenues for OTAs in the future. Booking habits are changing, most notably in that booking lead times are getting shorter, and OTAs appear to have been slower than direct booking competitors in addressing these changes."

- Mike Gallinari, Travel & Leisure Analyst

This report will look at the following areas:

  • Booking with a travel brand is more popular than booking with an OTA
  • Booking windows are getting shorter
  • Travelers want booking platforms to help them optimize their vacation plans

What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
    • Executive Summary

      • Market overview
        • Figure 1: Travel arrangement and reservation services revenues and forecast, at current prices, 2014-24
      • Top takeaways
        • Key trends
          • Booking with a travel brand is more popular than booking with an OTA
            • Figure 2: Direct vs OTA booking, November 2019
          • OTAs aren’t a first stop for most travel bookers
            • Figure 3: Initial booking site visitation, by age and by HHI, November 2019
          • More specialized booking sites are gaining on the big OTAs
            • Figure 4: Brand usage, by age group, November 2019
          • Short-notice booking is the future
            • Figure 5: Booking lead time of less than one month, by age group, November 2019
          • Travelers want sites to help them optimize and personalize
            • Figure 6: Desired booking site features, November 2019
          • What it means
          • The Market – What You Need to Know

            • Growth in reservations market will continue
              • OTA duopoly status is called into question
                • Mobile adoption forces OTAs to update
                  • Hotel growth streak stalls
                    • Google squeezes OTAs
                    • Market Size and Forecast

                      • Travel booking market slowing, but stable
                        • Figure 7: Travel arrangement and reservation services revenues and forecast, at current prices, 2014-24
                        • Figure 8: Travel arrangement and reservation services' revenues and forecast, at current prices, 2014-24
                    • Market Breakdown

                      • Key market players
                        • Booking Holdings
                          • Expedia Group
                            • TripAdvisor
                              • Airbnb
                                • Figure 9: OTA global revenues, 2017-18
                              • Hotels, flights the most-booked offerings
                                • Figure 10: Travel verticals booked on last trip, November 2019
                            • Market Perspective

                              • The booking process is important
                                • Figure 11: Attitudes toward negative booking experiences, February 2019
                              • Mobile ownership is on par with PC ownership
                                • Figure 12: PC and smartphone ownership, 2015-19
                              • Increase in wearables foretells a new frontier in booking
                                • Figure 13: Appeal of wearables for travel purposes, by age group, August 2019
                            • Market Factors

                              • Hotel upcycle ends
                                • Google’s expansion disrupts the OTA landscape
                                • Booking Trends – What You Need to Know

                                  • Direct platforms are using their loyalty programs effectively
                                    • OTAs are being spread thin
                                      • Booking providers are accommodating the practices of younger travelers
                                        • Overtourism could disrupt OTA practices
                                          • The future of booking is seamless experience
                                          • What’s Happening

                                            • Hotels effectively leverage perks to encourage direct booking
                                              • OTAs punish properties with resort fees
                                                • Megabus leverages the old-fashioned giveaway
                                                  • The hotel/homeshare blur forces OTAs to widen their net
                                                    • Foursquare/TripAdvisor partnership is good for younger travelers
                                                      • Personalization is coming to travel search results
                                                      • What’s Next

                                                        • Overtourism threatens to disrupt OTA supply
                                                          • Instagram going beyond inspiration
                                                            • Data vulnerability can hit OTAs hard
                                                              • In five years we’ll book with a glance
                                                                • Figure 14: easyJet Look&Book how-to video, retrieved January 2020
                                                            • The Consumer – What You Need to Know

                                                              • Most vacations are 1-3 nights
                                                                • Younger travelers book closer to their departure date
                                                                  • Direct booking is winning
                                                                    • New players threaten the duopoly
                                                                      • Larger parties turn to TripAdvisor
                                                                        • Bookers want sites to give them guidance
                                                                          • Travelers see direct booking more favorably than OTAs
                                                                          • Number and Length of Vacations Booked

                                                                            • Three quarters of Americans book leisure travel
                                                                              • Figure 15: Number of leisure trips booked, November 2019
                                                                            • Vacation incidence high across age groups
                                                                              • Figure 16: Booked a trip in last 12 months, by age group, November 2019
                                                                            • Most people can manage two leisure trips
                                                                              • Figure 17: Number of trips booked, by HHI and by parental status, November 2019
                                                                            • Short vacations offer multiple customer opportunities
                                                                              • Figure 18: Length of last booked vacation, November 2019
                                                                            • Three-day weekends are the sweet spot
                                                                              • Figure 19: Length of last trip booked, by HHI, November 2019
                                                                          • Booking Time Frames

                                                                            • Booking is most popular within a month of the vacation date
                                                                              • Transportation
                                                                                • Accommodations
                                                                                  • Figure 20: Transportation booking time frames, November 2019
                                                                                  • Figure 21: Accommodation booking time frames, November 2019
                                                                                • Younger travelers comfortable with shorter booking windows
                                                                                  • Figure 22: Booking lead time of less than one month, by age group, November 2019
                                                                              • Booking Platforms

                                                                                • Direct providers are ahead of aggregators in ease of use
                                                                                  • Figure 23: Platform used to book, brand vs aggregator, November 2019
                                                                                • Direct is winning with everyone
                                                                                  • Figure 24: Direct vs OTA booking, by age group and HHI, November 2019
                                                                                • Desktop booking will lose its dominance soon
                                                                                  • Figure 25: Method used for OTA booking, November 2019
                                                                                • Apps capture the highest-income bookers
                                                                                  • Figure 26: App usage for booking, by HHI, November 2019
                                                                                • Bookers want to go it alone
                                                                                  • Figure 27: Booking through assistants, by age group, November 2019
                                                                              • Booking Companies Used

                                                                                • OTA “duopoly” faces threats
                                                                                  • Figure 28: OTA brands used in booking last trip, November 2019
                                                                                • Airbnb’s flexibility allows it to thrive
                                                                                  • Figure 29: Homeshare brands booked, November 2019
                                                                                • Big umbrella sites are losing ground to more specialized booking players
                                                                                  • Figure 30: Brand usage, by age group, November 2019
                                                                                • Specialized OTAs are also making inroads across income groups
                                                                                  • Figure 31: Brand usage, by income, November 2019
                                                                                • Larger families find TripAdvisor to be a big help
                                                                                  • Figure 32: TripAdvisor usage, by number of children in household, November 2019
                                                                              • Desired Booking Site Features

                                                                                • Travelers are interested in optimization
                                                                                  • Figure 33: Desired booking site features, November 2019
                                                                                • Travel expertise will entice travelers to a provider
                                                                                  • Figure 34: TURF Analysis – Desired booking website features, November 2019
                                                                                • A suite of advisory solutions appeal to men and women
                                                                                  • Figure 35: Desired booking site features – Select items, by gender, November 2019
                                                                                • Age of traveler impacts booking interests
                                                                                  • Figure 36: Desired booking site features, by age group, November 2019
                                                                                • Personalization is popular across income levels
                                                                                  • Figure 37: Desired booking site features, by HHI, November 2019
                                                                                • Homeshare providers can use travel guidance to build trust
                                                                                  • Figure 38: Desired booking site features, by type of reservation, November 2019
                                                                              • Direct vs OTA Characteristics

                                                                                • Direct booking stands out more than OTAs
                                                                                  • Figure 39: Descriptions of booking direct vs through OTAs, November 2019
                                                                                  • Figure 40: Booking.com “Live Curious” commercial, February 2019
                                                                                • OTAs struggle with older, wealthier travelers
                                                                                  • Figure 41: Perceptions of direct booking and OTAs, by age, November 2019
                                                                                  • Figure 42: Perceptions of direct booking and OTAs, by HHI, November 2019
                                                                                • OTAs aren’t top-of-mind
                                                                                  • Figure 43: Initial booking site visitation, by age and by HHI, November 2019
                                                                                • OTAs have trouble retaining onlookers
                                                                                  • Figure 44: Option comparison, by age and by HHI, November 2019
                                                                              • Appendix – Data Sources and Abbreviations

                                                                                • Data sources
                                                                                  • Fan chart forecast
                                                                                    • Consumer survey data
                                                                                      • Direct marketing creative
                                                                                        • Abbreviations and terms
                                                                                          • Abbreviations
                                                                                            • Terms
                                                                                            • Appendix – The Market

                                                                                                • Figure 45: Travel arrangement and reservation services' revenues and forecast, at current prices, 2014-24
                                                                                                • Figure 46: Inclination toward new booking companies
                                                                                            • Appendix – The Consumer

                                                                                                • Figure 47: Table – TURF analysis – Desired booking website features, November 2019
                                                                                              • Methodology

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                                                                                              • Consumer

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                                                                                              • Brand/Company

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                                                                                              • Data

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                                                                                              Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.

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