Hitwise US - Travel Trends:

Transcription

1 Hitwise US - Travel Trends: How Consumer Search Behavior is Changing June 2008 Heather Lead Analyst: Hopkins Sandra Hanchard Heather Hopkins, Hitwise UK Senior Online Market Analyst Analyst, Hitwise Asia Pacific

2 Contents 1 Introduction 1 2 Executive Summary 2 3 Online Travel Industry Overview 3 4 Search Engine Trends 4.1 Traffic from Search Engines 4.2 Changes in Query Content 4.3 Paid and Organic Search Traffic Kayak Clickstream Case Study 10 6 Terms Used in this Report 11 7 About the Author 11 8 About Hitwise 12

3 1 Introduction 1 Online travel is one of the largest e-commerce categories, and also one of the most competitive, as leisure and business travelers alike have proved themselves eager to take advantage of the easily available information online in their search for the best deal. As online travel shoppers become savvier and as technology for websites improves, it becomes increasingly important for travel website owners to understand the competitive landscape and how travel shoppers are navigating to travel websites. This report aims to help the travel website owner understand the competitive landscape. The report provides: An overview of the online travel industry. Analysis of search engine trends including the growth of search engines as a source of visits, changes in query content, and analysis of the paid search strategies of leading airline websites. A brief case study on Kayak to help travel websites use clickstream data to effectively evaluate partners and affiliates. More information about Hitwise can be found at

4 2 Executive Summary 2 Online Travel Industry Overview The share of US Internet visits to Travel websites was up 8% year-on-year in April All Travel sub-categories except Agencies enjoyed positive year-on-year growth. The fastest growing Travel sub-category in April was Cruises, with its share of US Internet visits up 31% year-on year; followed by Maps up 16%. Search Engine Trends Search Engines was the largest source of traffic for Travel websites in April 2008, accounting for one-third of upstream visits to the industry as a whole. Visits from Search Engines were up 8% year-on-year, highlighting the growing importance of referrals from search engines. The majority of search terms sending visits to Travel websites were queries for inventory owners (such as airlines and hotels), followed by searches for map website brands (such as MapQuest and Google Maps). The share of visits from generic searches (i.e., maps, driving directions, and cheap airline tickets ) and searches for specific destinations (i.e., disneyland, las vegas, and sea world ) have decreased. This change may be a result of consumers increasingly knowing where to go to find what they need - i.e., to the airline, travel agency or hotel websites. Increased searcher sophistication in multiple word queries, promotion by travel companies and increased use of the web to book travel likely contribute to this trend. Searches for map websites make up the largest share of visits to Travel websites. The biggest percentage change in share of visits to Travel websites was for searches for meta-search websites with a 40% year-on-year increase. However these queries made up only 0.37% of visits from Search Engines to Travel websites in the four weeks to April 26, While the volume of searches for price-comparison brands remains low, it is worth noting that this was a result of an increase in searches for several price-comparison brands, in particular kayak and booking buddy. Travel agencies on average receive more of their search traffic from paid listings than do Transport or hotel websites. The average share of paid search traffic received by the top 10 Travel - Agencies websites in April was 48%. This compares with 21% for the top 10 Transport websites and 31% for the top 10 hotel websites within the Hitwise Destinations & Accommodation sub-category. Among websites in each category is a great deal of disparity in the ratio of paid and organic search traffic. For example, four of the top 10 Transport websites received less than 10% of their search traffic from paid listings; at the other end of the spectrum however, two Transport websites received more than 40% of their search traffic from paid listings. Kayak Clickstream Case Study Kayak and SideStep, the two largest travel meta-search websites based on share of US visits (which merged in December of last year) have become increasingly important as a source of referrals to Travel websites over the past year. In April 2008, Kayak accounted for 1 in every 110 US visits to a Travel website, with upstream visits to Travel websites more than doubling year-on-year in April (up 117%). SideStep has also seen strong growth - up 47% year on-year but accounts for a much smaller share of traffic, at 1 in every 263 US Internet visits to Travel websites. Kayak sent three times more traffic to Travel - Agencies than to Transport The power websites of competitive in April. intelligence

5 3 Online Travel Industry Overview 3 In April 2008, Hitwise captured data on 10,559 travel websites, which together accounted for 2.07% of all US Internet visits during that month. The Hitwise Travel industry is divided into five sub-categories, which are defined as follows: Agencies - Travel agencies and businesses that provide planning and organizational services for travel. Hitwise captured data on 1,274 Agencies in April. Cruises - Cruise ship operators or websites that provide cruise information, with 271 websites in the category in April. Destinations & Accommodation - Travel accommodation and destinations including resorts, tourist locations, hotels, and amusement parks. Hitwise captured data on 6,872 websites in the category in April. Transport - Businesses that supply transportation-related services to individuals for business and vacation travel, including airlines, rental cars, and public transportation. Hitwise captured data on 1,116 Transport websites in April. Maps - Includes maps, resources, route planners, and websites providing information on how to get to one place or another, with 215 websites in the category in April. The largest Travel sub-category based on market share of US Internet visits was Destinations & Accommodation accounting for 27.0% of visits to Travel websites, followed closely by Maps at 25.7% and Agencies at 22.6%. The following table lists the top 10 websites in the Hitwise Travel, Destinations & Accommodation and Agencies industries in April 2008 based on market share of US Internet visits. Figure 1: Top 10 Travel, Destinations & Accommodation and Agencies Websites Based on Share of US Internet Visits, April The share of US Internet visits to Travel websites was up 8% year-on-year in April. All Travel subcategories except Agencies enjoyed positive year-on-year growth. The fastest growing Travel subcategory in April was Cruises, with its share of US Internet visits up 31% year-on-year; followed by Maps up 16%.

6 4 Search Engine Trends Traffic from Search Engines Search Engines was the largest source of traffic for Travel websites in April 2008, accounting for one-third (33.94%) of upstream visits to the industry as a whole. Visits from Search Engines to Travel websites are up 8% year-on-year, highlighting the growing importance of referrals from search engines. To put this into context, it is interesting to note that Travel websites receive a 35% larger share of visits from Search Engines than each of the averages for All Categories of websites and the Shopping & Classifieds industry. This indicates that search engine traffic is even more important to Travel websites than for other industries. Figure 2 below shows the percentage of upstream traffic from Search Engines for each of the Travel sub-categories. Figure 2: Share of Upstream US Visits from Search Engines, April Transport Maps Destinations & Accommodations Cruises Agencies Travel 0% 10% 20% 30% 40% 50% Maps and Destinations & Accommodation had the largest percentage of upstream traffic from Search Engines in April, at 42% and 41% respectively. The Destinations & Accommodation industry likely receives more traffic from search due to lower brand recognition and a larger number of websites in the industry, at 6,872 websites in April. Websites are more dependent on search engine traffic as consumers may not know URLs and these properties may be more reliant on generic search terms. Agencies and Cruises websites are less dependent on traffic from search than the average Travel website, partly because they receive a larger amount of referred traffic from other travel websites, as well as directly from competitive websites.

7 4 Search Engine Trends Changes in Query Content Analysis of the top 300 search terms consumers used to reach Travel websites reveals interesting insights into the way consumers search and how query content has changed in the past year. The majority of search terms sending visits to Travel websites are queries for inventory owners (such as airlines and hotels) followed by searches for map website brands (such as MapQuest and Google Maps). The following pie chart provides a breakdown of the type of search term consumers used to reach Travel websites in the four weeks to April 26, Figure 3: Percentage of Visits to Travel Websites by Query Type, Four Weeks to April 26, Analysis of how the search terms that consumers use to reach Travel websites has changed year-on-year reveals insights into the changing preferences for destinations and in the way consumers navigate to travel websites. Generic searches and searches for specific destinations have decreased. We have seen a 12% decrease year-on-year (in the four weeks to April 26, 2008) in generic searches such as maps, driving directions, and cheap airline tickets. Searches for specific destinations such as disneyland, las vegas, and sea world have decreased 26%. This change may be a result of consumers increasingly knowing where to go to find what they need - i.e., to the airline, travel agency or hotel websites. Increased searcher sophistication in multiple word queries, promotion by travel companies, and increased use of the web to book travel likely contribute to this trend. Searches for map websites make up the largest share of visits from search, accounting for nearly one-third (32%) of visits from Search Engines to Travel websites (as illustrated in the pie chart in Figure 3). Navigational searches for map websites have grown, with a 13% year-on-year increase in searches for map brands (such as mapquest and google maps ). The biggest change in share of visits to Travel websites was for searches for meta-search websites, with a 40% increase in searches for these websites year-on-year. However, these queries made up only 0.37% of visits from Search Engines to Travel websites in the four weeks to April 26, While the volume of searches for price-comparison brands remains low, it is worth noting that the increase in searches was a result of an increase in searches for several price-comparison brands. The search term kayak was the 58th highest volume search term sending visits to Travel websites in the four weeks to April 26, 2008, up from 92nd in the same period in Hitwise has seen a 29% increase in the share of US Internet searches for kayak year-on-year. The term booking buddy entered the top 300, at 258th place in the four weeks to April 26, Searches for booking buddy have increased 60% year-on-year.

8 4 Search Engine Trends 6 Analysis of the search terms consumers use to reach Travel websites in the four weeks to April 26, 2008 compared with the same period in 2007 reveals that while the most popular destinations remain unchanged, consumers are increasingly searching for domestic destinations. Figure 4: Search Terms for Travel Industry, Four Weeks to April 26, Generic maps driving directions directions map cheap tickets airline tickets cheap flights cheap airline tickets hotels car rentals Destination disney world disneyland six flags las vegas walt disney world sea world las vegas hotels universal studios grand canyon myrtle beach The top searched-for destinations remain unchanged year-on-year ( disney world, disneyland, six flags, and las vegas ). Some domestic destinations are gaining, while international destinations have fallen off the list. The only new entrant to the top 10 most searched destinations this year was myrtle beach, up from 17 a year ago. Searches for myrtle beach were up 53% year-on-year in the week to April 26, Big gains were also enjoyed by hershey park up 42%, niagara falls up 40%, and kings island also up 40%. In the four weeks to April 26, 2008 there were only two international destinations among the top 300 search terms sending visits to Travel websites: costa rica and orient beach (the famous clothing-optional beach in St. Marten s). In the same four-week period in 2007, there were five such terms: costa rica, italy, japan, jamaica, and bahamas. The decline in searches for international destinations is likely a result of the weakened dollar and economic uncertainties. 4.3 Paid and Organic Search Traffic Hitwise recently introduced a paid and organic filter for Website Search Terms reports. The filter allows firms to view the ratio of paid and organic traffic going to a competitor s website as well as the paid and organic rate for each term sending traffic to that website. A common question among marketers is what is the right mix of paid and organic search traffic? The analysis reveals that for Travel websites there is no right mix; instead depending on budgets, website structure and content, the right mix will be different for every business. However, understanding the mix of paid and organic traffic going to competitor and industry leading websites helps marketers benchmark their own paid search activities.

9 4 Search Engine Trends 7 Figure 5: Average Share of Paid Search Traffic for Top 10 Websites in Travel Sub-categories, Four Weeks to April 26, Transport Travel - Agencies Hotels 0% 20% 40% 60% Travel agencies on average receive more of their search traffic from paid listings than do Transport or hotel websites. Among the top 10 Travel Agencies websites in April, the average share of search traffic from paid listings was 48%. This compares with 21% for the top 10 Transport websites and 31% for the top 10 hotel websites within the Hitwise Destinations & Accommodation subcategory. Among websites in each category is a great deal of disparity in the ratio of paid and organic search traffic. This disparity is visually represented in the following Search Engine Marketing Quadrant Analysis. The analysis summarizes the search engine marketing strategy of the top 10 Transport websites in April The figure shows the share of visits to each website on the x-axis, the share of traffic each website receives from Search Engines on the y-axis and the share of paid search traffic is represented by the size of the bubble. Figure 6: Hitwise US SEM Quadrants: Top 10 Transport Websites Based on Share of US Internet Visits, April Bubble Size Based on Share of Search Traffic from Paid Listings. % of Upstream Visits from Search. 40% 35% 30% Continental Airlines 25% United Airlines AirTran Airways Amtrak US Airways Northwest Airlines American Airlines Delta Air Lines JetBlue Airways Southwest Airlines 20% 2% 4% 6% 8% 10% 12% 14% Market Share of Internet Visits

10 4 Search Engine Trends 8 Southwest Airlines was the largest Transport website based on share of visits, with 15% market share of category visits. It received 25% of its traffic from Search Engines and only 1% of its traffic was from paid search listings. Including Southwest Airlines, four of the top 10 Transport websites received less than 10% of their search traffic from paid listings. At the other end of the spectrum, two Transport websites received more than 40% of their search traffic from paid listings. A similar disparity in the ratio of paid and organic search traffic exists among Travel - Agencies and hotel websites. For example, Intercontinental Hotels Group received 44% of its search traffic from paid listings in the four weeks to April 26, 2008 while the figure was 19% for Hilton Hotels. VacationsToGo received 67%, Kayak 60% and Yahoo! Travel 7% of search traffic from paid listings.

11 5 Kayak Clickstream Case Study 9 Kayak and SideStep, the two largest travel meta-search websites based on share of US visits, merged in December of last year. Both websites have become increasingly important as a source of referrals to Travel websites over the past year. In April 2008, Kayak accounted for 1 in every 110 US visits to a Travel website, with upstream visits to Travel websites more than doubling year-on-year(up 117%). SideStep has also seen strong growth; up 47% year-on-year but accounts for a much smaller share of traffic, at 1 in every 263 US Internet visits to Travel websites. Figure 7: Upstream US Traffic from SideStep and Kayak to the Travel Industry. Figure 8 lists the top 10 websites visited after Kayak in April Travel - Agencies figures prominently among the top recipients of traffic. In fact among downstream visits to Travel websites from Kayak in April, 61% went to Travel - Agencies, 18% to Transport, 7% to Destinations & Accommodation and less than 1% to Cruises. Meta-search websites were once heralded as a savior for inventory owners such as airlines and hotels, cutting out the travel agency middle man. However, the reality is much different. In April more than 3 times more traffic went to Travel Agencies from Kayak than to Transport websites.

12 5 Kayak Clickstream Case Study 10 Figure 8: Downstream Websites Visited after Kayak in April Hitwise New and Returning Visitor data reveals that visits from Kayak are more often new than average for top airline websites. For example, in April, 50.32% of visits from Kayak to Southwest Airlines were new visitors compared to an overall average of 38% new visitors that month. Similarly, 54.74% of visits to American Airlines from Kayak were new visitors in April compared to an average of 49% while 61.42% of visits to United Airlines were new compared to a 54% average. New and returning visitor data can help marketers evaluate the usefulness of affiliates and partners. When paying for each click, it can be important to avoid paying to get your own customers to visit your website.

13 11 Terms Used in this Report Hitwise provides clients with various metrics for analyzing competitive activity. Hitwise defines these metrics in conjunction with the industry standard definitions published by the US Internet Advertising Bureau s Media Measurement Task Force on Metrics and Methodology. The definitions of metrics used by Hitwise are: User Visit: A series of one or more page requests by a visitor without 30 consecutive minutes of inactivity. Market Share: The percentage of all visits or page requests to a particular online market sector that is received by the individual website. All Sites: Includes all websites visited by Internet users across all 160+ Hitwise industries except Adult, ISPs and Ad Servers. About the Author Heather Hopkins is a Senior Online Market Analyst for the Hitwise Global Research Team. In this role, Heather analyzes the trends affecting businesses online and works with Hitwise clients to identify opportunities and threats to online business growth. Heather writes regular Insight Reports on the travel, search and retail sector, covering search, affiliate marketing and audience profiling for the US and UK markets. Heather s blog can be found at Heather has been an analyst with Hitwise for over four years. Prior to joining Hitwise, Heather was a Vice President with Dalbar, a market research firm in Boston, Massachusetts and Toronto, Ontario.

14 12 About Hitwise Hitwise is the leading online competitive intelligence service. Only Hitwise provides its 1,400 clients around the world with daily insights on how their customers interact with a broad range of competitive websites, and how their competitors use different tactics to attract online customers. Since 1997, Hitwise has pioneered a unique, network-based approach to Internet measurement. Through relationships with ISPs around the world, Hitwise s patented methodology anonymously captures the online usage, search and conversion behavior of 25 million Internet users. This unprecedented volume of Internet usage data is seamlessly integrated into an easy to use, webbased service, designed to help marketers better plan, implement and report on a range of online marketing programs. Hitwise, a subsidiary of Experian (FTS: EXPN) operates in the United States, United Kingdom, Australia, New Zealand, Hong Kong and Singapore. More information about Hitwise is available at For up to date analysis of online trends, please visit the Hitwise Intelligence-Analyst Weblogs at and the Hitwise Data Center at For further updates on US Travel Trends, please contact: Robert Schatzel at +1 (212) or robert.schatzel@hitwise.com Hitwise Disclaimer Note - Some of the data presented in this report is based on custom data sets built for the purpose of this report and not available in the syndicated Hitwise service. This research report may contain names, information, data, links to third-party website addresses, and other materials belonging to third-parties; including textual references to such items. Any and all such uses are for illustrative purposes only and do not necessarily indicate an endorsement of the opinions, products or services provided by those third-parties. Hitwise does not claim any proprietary right in, or to, any such items as may qualify as copyrights, trademarks or other proprietary marks of third-parties. Hitwise is not responsible for the content of third-party websites, or the manner in which information may be collected on that website and used by the third-party. Hitwise disclaims any responsibility towards the visitor of a third-party website or any third-party for any direct, indirect or incidental reliance, consequential or punitive damages, including without limitation lost profits, expenses or revenue; regardless of whether Hitwise knew, or ought to have known, of the possibility of any loss or damage arising from the use of, or visit to, a third-party s website. Use of this research report is at your own and sole risk. Hitwise disclaims any and all warranties or representations in respect of the accuracy or usefulness of information, or any observations that may be derived from such information, obtained from Hitwise.