Category Archives: Travel Statistics

Visitors to OTA’s plunge 14% in October, a Historic Low


Leading OTA down over 20%.

Not only are Americans flying less as the economy tanks, they’re spending less time scouting the Internet for travel deals, creating an unprecedented drop in traffic for online travel agencies like Orbitz, Travelocity and Expedia.   As consumer confidence reached historic lows in October, the volume of visitors to Web travel portals declined 14 percent, year over year, to 38.2 million, according to ComScore Inc. Web traffic fell for nearly every major airline site.

Hardest hit were the three online powerhouses that have dominated bookings for much of this decade. Web traffic at Expedia Inc. sites plunged 25 percent, to 18.2 million visitors, while LP and Orbitz saw 16 percent and 23 percent drops, respectively.

The falloff in traffic was unparalleled for the three online agencies, which grew by leaps and bounds during the economic slowdown that followed the Sept. 11 attacks as many consumers for the first time turned to the Internet to unearth bargains.

Anticipating tougher times ahead, Orbitz last month announced plans to reduce its U.S. workforce by 10 percent by the end of the year. After dodging the effects of sky-high fuel prices during the first half of the year, airlines, hotels, rental car companies and tour operators are struggling with a steep and sudden drop-off in demand from both corporate and leisure travelers.

“What’s happening in 2008 is a universal buckling down,” said Sara Stevens, a vice president and head of the travel and retail practices for Virginia-based ComScore, a market research firm that tracks Internet traffic.

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New Survey shows Chief Marketing Officers skeptical about Social Networking

While chief marketing officers are intrigued by social networking sites Facebook and MySpace as potential marketing vehicles, actually using them is another matter, according to the results of a new survey conducted by GfK Roper Public Relations and Media for Epsilon, a marketing services firm.

More than one-quarter (27%) of consumer and B-to-B chief marketing executives surveyed online in late October identified social networking and word-of-mouth as the tools they would most like to introduce to their marketing mix to compensate for anticipated budget cuts–ahead of all other traditional or digital marketing channels.

However, more than half (55%) of the 180 responding chief marketers–representing brands with revenues ranging from $250 million to more than $10 billion–indicated low current interest in actually incorporating the networking sites into their plans.

One-third said they’re “not interested at all” in getting Facebook and MySpace into their plans, and 22% said they’re “not too interested,” while 35% are very or somewhat interested.

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Ensuring your Search Strategy gets the Attention it Deserves During an Economic Downturn

With a countless number of conferences and articles are discussing the pros and cons of joining the social media race, one could be forgiven for getting caught up in the euphoria of starting a social campaign.  However, during this era of social media, podcasting, life-streaming, tagging, uploading, etc, etc. it is crucial to maintain focus on a few of the ‘older’ pieces of your online marketing plan, in this case, search.  Additionally, as so many DMOs and CVBs face budget reductions or at minimum, a careful use of funds, they find themselves reviewing interactive expenditures.  What better time to evaluate your SEO and SEM programs.

First, some new research from the Pew Internet & American Life Project on the adoption of search by internet users.
As shown by the chart above, search has become one of the most utilized online tools in a typical day, second only to email.

An excerpt from the memo:

With this increase, the number of those using a search engine on a typical day is pulling ever closer to the 60% of internet users who use email, arguably the internet’s all-time killer app, on a typical day.1 Underscoring the dramatic increase over time, the percentage of internet users who search on a typical day grew 69% from January 2002, when the Pew Internet & American Life Project first tracked this activity, to May 2008, when the current data were collected. During the same six-year time period, the use of email on a typical day rose from 52% to 60%, for a growth rate of just 15%.

Not only do these statistics highlight the clear importance of search in online marketing plan, they also show how quickly search has become a central and ubiquitous part of the internet.  Users have learned and adapted to the search process.  As the report later states, advancements in search and search results have increased the user’s trust in the search tool.  Plus, having Google as one of the largest and most publicized corporations on the planet certainly does not detract from the public’s knowledge of search.

Additionally, the report highlights the demographics of the search user:

Those who are using search engines on an average day are more likely to be socially upscale, with at least some college education and incomes over $50,000 per year. They are more likely to be internet users with at least six years of online experience and to have their homes wired for fast internet connections. Younger internet users are more likely than older users to search on a typical day. Men are more likely than women to search on a typical day.

For DMOs and CVBs looking for that upscale consumer with the disposable income to continue traveling, even in times of economic hardship, these statistics should make a strong case for a SEO or SEM campaign.

Before we move on, let’s look at the numbers in depth:

College graduate+ 66%
Some college 49%
High school graduate or less 32%

$75,000 + 62%
$50,000 – 74,999 56%
$30,000 – 49,999 34%
<$30,000 36%

18 – 29 years 55%
30 – 49 years 54%
50 – 64 years 40%
65 years and older 27%

So, how do you begin a SEO or SEM campaign?  And which one should you focus on?  SEO or SEM?

While most experts agree that using an SEO and SEM campaign in tandem will provide the best results, the value of a long-term SEO campaign should NOT be overlooked.  The short-term gain of a quick SEM campaign can produce solid results, particularly for a specific time period…such as a winter promo / sweeps…however you are, in fact, simply ‘renting’ those returns.  Once you stop spending, you stop receiving that ROI.  On the other hand, a SEO campaign should be looked at as a long-term investment in your search strategy.

For most small tourism organizations, having an external company manage a SEO / SEM campaign could prove to be a budgetary challenge.  Having your advertising agency could be another option, but for most, managing a SEO / SEM campaign either in-house or via an online vendor is the likely solution.

In the most basic terms, an SEO campaign would require less day-to-day management than a modest size SEM campaign.  Which furthers the argument to focus on natural search prior to a PPC campaign.

Easy said than done, to be sure.

Where to start?  To say there are a lot of factors that go into a SEO strategy is a massive understatement and certainly more than we can cover in a reasonable blog post.  Luckily, Google provides a complete help section on how to start, manage and optimize a SEO (and SEM) campaign.  Everything from creating a XML site map to keyword stuffing your pages (not a good thing).

Think of the site this way, here is the search company that owns 60%(ish) of the market and they are telling you how to optimize your site for their product.  Worth a quick look for you or your webmaster.

Additionally, be sure to look at Google’s Webmaster blog ( and the Google Webmaster discussion group (, both excellent sources of information and help on setting up, starting and managing a SEO / SEM campaign.

So, prior to setting up your Facebook Fan page for your destination, take a moment and review your search engine strategy.  In this time of increasing competition and decreasing budgets, a solid SEO / SEM plan is a must for every CVB and DMO.

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Filed under DMOs, Google, SEM, SEO, Travel Industry, Travel Statistics

What are the World’s Top 10 Country Brands?

Everyone loves Australia.

Everyone loves Australia.

What are the World’s Top 10 Country Brands?

Australia has emerged as the world’s top country brand for the third consecutive year, according to the 2008 Country Brand Index (CBI), being officially released in London on November 11. Rising from its sixth place ranking last year, Canada is recognized second and the United States rounds out the top three country brands in the 2008 study.

Read the complete story.

Travel industry feeling the squeeze.

As Americans evaluate and pare back their discretionary spending for the remainder of this year, the travel and leisure industries are feeling the squeeze.

Companies throughout the sector — including hotel, cruise ship, theme park and gambling concerns — have all warned in recent weeks that their businesses have slowed or that things could get worse next year.

“The deteriorating outlook for the economy is impacting travel habits and spending, and hotels are expected to experience reduced occupancy levels, and to a lesser degree, some room rate erosion through 2009,” said Scott Berman, principal at consulting firm PricewaterhouseCoopers.

For hotels, the picture looks particularly grim.

PwC expects that a key measure of the hotel industry’s health, revenue per available room (RevPAR), to fall 5.8 percent next year, following this year’s estimated 0.8 percent decline. That would be the industry’s first back-to-back decline in the widely watched measure since 2001-2002.

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US Inbound travel up 9% through August.

The United States experienced a 9 percent increase in international visitors during the first eight months of the year when compared to the same period in 2007. The U.S. Department of Commerce announced that 34.9 million international visitors traveled to the country from January to August, and spent $96.3 billion during the period. The 5.6 million visitors in August alone was an increase of 6 percent when compared to August of 2007, and they spent a record $12.7 billion— an increase of 20 percent.

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U.S. travel market projected to increase 4% in 2008 and 2% in 2009.

With the economic situation deteriorating throughout fall 2008, most U.S. travel companies are now grappling with declining demand and uncertainty for the future. The latest market forecasts in the new PhoCusWright’s U.S. Online Travel Overview Eighth Edition reflect these lower expectations for travel companies’ performance.

If unemployment continues to rise and retirement accounts dwindle, travel companies must prepare for a downward trend: fewer people taking trips, just like in 2002. The strategy to hold or even raise prices has shifted as travel sellers look to salvage what they can of 2008 while holding steady in 2009.

PhoCusWright projects the overall U.S. travel market is expected to increase by 4% and 2% in 2008 and 2009, respectively. These are the slowest growth rates since 2003, when the market declined by 8% following the effects of the Sept. 11, 2001 terror attacks. All segments, except rail, will be impacted. But the travel industry is no stranger to crisis, and improved results are expected in 2010.

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American Express Releases Annual Global Business Forecast

Originally slated for release in September, American Express delayed the release of its annual Global Business Travel Forecast and Trends report in order to evaluate the impact of market activities that have occurred over the last 30 days.

American Express Business Travel last week published its annual Global Business Travel Forecast and Trends report. Originally slated for release in September, the American Express Advisory Services department responsible for producing the report delayed its release in order to evaluate the impact of market activities that have occurred over the last 30 days. In the past weeks, modifications were made to reflect the potential impact of the anticipated global economic slowdown. In certain markets, the Forecast predicts a negative increase in 2009 to airfares and hotel rates. Both suppliers and buyers of travel and related services are expected to face new operating challenges in the coming year.

“Based on forecasted economic conditions for 2009 and the substantial increase in fares already experienced in 2008, it is possible that airfares in 2009 may decrease,” said Hervé Sedky, vice president and general manager, Global Advisory Services, American Express Business Travel. “However, this doesn’t necessarily correlate to a decrease in prices paid as airlines continue their pursuit of expanding the suite of fees charged for services such as in-flight meals and baggage. In this difficult economic environment, successful T&E management strategies will be based upon the total cost of a business trip, which takes into consideration costs such as parking fees, airline fees, meals and other related expenses.”

Global Business Travel Forecast

Sedky continued, “Considering airfare, car rental and hotel stay, we expect the average domestic trip to increase 2.8 percent, or $31 USD, to a total of approximately $1139 USD. An increase of 4.3 percent, or approximately $147 USD, is expected for international trips to bring the average cost to $3556. However, if you include the costs of additional travel expenses including baggage fees, dining, airport parking and even package shipping, it can add an estimated $400 to the total trip cost.”

Global Airfare Forecast

The proliferation of new fees and a delicate supply and demand balancing act will determine whether airfares remain steady, increase or potentially decrease compared to 2008.

“In response to the record energy prices in 2008, many airlines began charging fees for different services such as checked luggage, in-flight refreshments and aisle seating. To help mitigate the impact of these new charges, which can increase air travel costs up to an additional 15 percent per trip, we advise companies to consider increasing their focus on demand management to ensure planned trips meet the guidelines designed to promote the most effective use of their business investment,” continued Sedky.

  • Capacity cuts are likely to lead to a shortage of available seats at lower price points, while changes in ticketing and minimum-stay requirements, uncertainty surrounding the future price of jet fuel, movement in airline consolidation and alliances and tighter controls over contract performance measurement are likely to drive price increases.
  • Prices are predicted to experience downward pressure due to a slowing global economy, improved demand management by corporations and stronger traveler compliance. The expansion of low-cost carriers, more efficient aircraft and airline operations and the continued liberalization of the industry are also expected to mitigate increases.

Global Hotel Rate Forecast

Although American Express Business Travel forecasts some rate growth in the global hotel industry, most regions will likely experience declines in occupancy, which will keep rate increases below the level of those seen in 2008.

  • The record oil prices that began in 2008 are expected to continue to impact the hotel industry and airline capacity cuts should drive down demand in some markets.
  • As new hotels expand global supply and demand decreases in some markets, travel buyers should have increased bargaining power for 2009 rates.

Strategic Meeting Management Forecast

As economic conditions continue to draw attention to meetings as a source for savings, senior business leaders are expected to seek further visibility into meetings spending and aim to measure the return on investment of meetings and events for their companies.

  • Effective demand management tactics and a movement toward shorter events in more local destinations should help corporations achieve the best return on investment.
  • Implementing and managing meetings policy is expected to provide companies the ability to drive certain cost-saving behaviors. Based on a recent survey of American Express clients, over 70 percent of companies do not have a stand alone meetings policy.
  • Technology developments offer cost-effective ways to supplement meetings and events schedules. Teleconferencing and social networking sites are gaining popularity as tools to strengthen the interpersonal relationships created through traditional meetings.
  • Leveraging transient hotel programs with a meetings hotel program is expected to enable companies to have visibility in both areas and drive savings. Negotiating packages for the preferred properties will likely simplify the process to drive and support compliance.

Cost Containment Strategies for 2009

Companies across the globe are seeking new ways to manage their travel investments and maximize the value of their T&E programs.

  • Companies should revisit their travel policies to ensure that travelers have a comprehensive guide to navigate the current travel environment.
  • In addition to a tight travel policy, demand management and an increased focus on traveler compliance can deliver savings.
  • Benchmarking that is based on average segment cost or average ticket price is no longer sufficient due to the expansion of airline fees. Companies should benchmark the entire cost of a trip in an effort to minimize expenditures related to business travel.

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Five Factors that will Positively Affect Travel to and within the U.S. for 2009

With all the dismal news lately we must remember that there are counterbalancing influences that may actually increase tourism to many U.S. destinations.

  1. The continued weakness of the U.S. dollar. Financial experts expect the dollar to remain weak due the continued reduction in interest rates by the Federal Reserve and our growing debt.
  2. Fuel costs are coming down. In just the past three weeks they’ve plummeted by nearly 50%, allowing some airlines to lock in rates by purchasing futures contracts. This will eliminate, or at least reduce, some of the fuel surcharges while the drive market will benefit from lower prices at the pump.
  3. Visa Waiver program expansion approved. Seven new countries have now been admitted to the visa waiver program and TIA estimates this may increase arrivals by 1 million passengers.
  4. Hotel rates have been reduced in the short term. Many hotels who have depended on business meetings and corporate travel are slashing their rates, some as much as 25% a month, to entice new business.
  5. The prohibitively high cost of traveling to Euro-denominated countries has resulted in domestic tour operators re-balancing their brochures for 2009 with more U.S. products than European offerings.

While it’s possible for these influences to be offset by a meltdown of the economy following a dismal Christmas retail season, it doesn’t seem likely that central bankers in the major developing countries would allow that to occur without additional intervention.

While we choose to remain upbeat we could certainly be dining on crow come next Spring if things head South.

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Filed under Hotels, Travel Industry, Travel Statistics, Visa Waiver

Full Circle? OTA’s are Driving Consumers back to Traditional Travel Agents

The number of travelers booking online is down, says eMarketer,   out  of frustration. “The fact that fewer travelers are booking online  is caused by frustrations related to the planning and booking capabilities of online travel agencies,” said Jeff Grau, senior analyst at eMarketer.

Grau, a former presenter at E-Tourism Summit is author of the new report, “U.S. Online Travel: Planning and Booking.” He adds: “This, in turn, is spurring a renewed appreciation for the expertise and personalized services offered by traditional travel agents.”

eMarketer, a digital media research and analysis firm, says US travel sales booked online will reach $105 billion, up 12 percent from 2007. Furthermore, from 2007 to 2012, sales will increase at an 11.6 percent average annual rate. Even though online travel sales are growing, fewer travelers are booking their trips online.

In other words, online travel sites are steering customers back to offline travel agents — a complete turnaround of what has been happening in the category for the last decade, says the study.

“Customer dissatisfaction with online travel agencies (OTAs) stems specifically from unfriendly booking engines and navigation tools. With few points of differentiation, OTAs have a hard time building customer loyalty and have driven travelers right into the open arms of traditional travel agencies — and new online competitors, travel websites built around user generated content,” says the site.

Research by PhoCusWright, projecting through 2011, documents how agents are not only here to stay — but also precisely how important their role will be in a growing travel industry.

  • Cruise: In the cruise segment, the market research firm predicts, travel agent sales will grow from $9.6 billion to $10.9 billion from 2007 through 2011. Agents will continue to sell a majority of all cruises.
  • Hotel: In hotel/tours, travel agent sales will grow from $13.3 billion to $17.2 billion, PhoCusWright says.
  • Car rentals: Agent sales will remain stagnant at about $1.3 billion per year.
  • Air: Agents see a further decline, eroding to $9.7 billion by 2011 – even as air travel grows in actual dollars. The drop in airline bookings by agents as a percent of total air dollars is predictable and largely by choice.

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