PhoCusWright's FYI

Three in Ten U.S. Vacation Rental Dollars to be Spent Online by 2014

Cathy Schetzina — 23 May 2013

Vacation rentals may have arrived late to the online travel party – but the industry has rapidly transformed into a vibrant online segment and investor favorite. Even as the housing meltdown and economic recession dealt a twin blow to the sector, online bookings surged, jumping from just 12% of the overall vacation rental market in 2007 to 24% in 2012, according to a new PhoCusWright report. The market's complexity and fragmentation bring lingering challenges, but strong online momentum will continue to drive rapid growth. By 2014, three in ten U.S. dollars spent on vacation rental will be booked online – an online travel penetration just a few points shy of the hotel and lodging segment. "Expanding online distribution among vacation rental management companies (VRMCs) and a new breed of highly motivated, online-savvy homeowners is fueling dramatic growth," said Douglas Quinby, principal analyst. "At the same time, a seemingly endless stream of online vacation...

Tech Trends: What Should Be on Your Radar?

Cathy Schetzina — 16 May 2013

Whether by leaps and bounds, stops and starts, or tiny incremental changes that over time add up to something big – technology and innovation are what keeps the travel industry moving forward. Each year, PhoCusWright weighs in on what we think are the year's most important technology trends. Read on for a sneak peak at three of the trends that made this year's top 10 list. For the complete list, purchase the report. Data, Anywhere: To consumers, the future involves the ability to access desired digital information regardless of device. To travel companies, this same future is a development and support nightmare. Businesses once had little to worry about in terms of client-facing applications – just choose between Java Script, Java and Flash with CSS. But in the wake of the proliferation of various mobile devices – the iPad, iPhone and the many devices running Android or Windows 8 – interfacing with clients has become much more difficult. The good news:...

Theme for the 2013 PhoCusWright Conference

PhoCusWright — 1 May 2013

Travel industry research authority PhoCusWright today unveiled the theme for its signature event, PhoCusWright Conference, to be held November 19-21, 2013 in Hollywood/Ft. Lauderdale, FL USA. The conference annually attracts over 1,400 senior executives, media and investors from 35+ countries worldwide to advance travel, tourism and hospitality. A potent force is gaining strength across the global travel industry, bringing with it a groundswell of consumer expectations that threaten to undermine the unprepared. Sellers of sameness beware: one-size never fit all, and the days of the generic are done for. A rising legion of travelers now demands to be recognized – one by one. "Cult of Context" adheres to a simple truth: success with many requires serving the wants of the one. Travelers have no tolerance for so-so search results and "personalized" deals that aren't so personal. As the Cult takes hold,...

Neither Feast Nor Famine for U.S. Leisure Travelers

Cathy Schetzina — 18 Apr 2013

Consumer spending may be on the rise, but when it comes to leisure travel, many Americans are still feeling frugal. According to a new PhoCusWright report, overall leisure travel incidence remained flat in the past year, and many of the U.S. adults who did manage to vacation took fewer and shorter trips. But while the average traveler may still not be feeling confident enough to splurge, there are signs that some vacationers are tentatively loosening the purse strings. According to PhoCusWright's U.S. Consumer Travel Report Fifth Edition, six in ten U.S. adults traveled for leisure in 2012, roughly even with the previous year. Travelers on average took 2.8 leisure trips, down slightly, and some travelers economized by shortening medium-length trips (4-6 nights) into quick weekend getaways. Not surprisingly, taking fewer and shorter trips also meant that travelers spent less – average annual travel spend dropped roughly $230 year over year. "Fewer trips may create the...

Middle East Travel Growth Accelerates in Wake of Arab Spring

Cathy Schetzina — 21 Mar 2013

The Middle East travel industry is regaining momentum following the wave of protests and revolutions that swept the region in late 2011. After growing just 3% in 2011, the Middle East travel market jumped 12% in 2012 and will sustain double-digit growth through 2014, according to a new PhoCusWright report. Online bookings will nearly double between 2011 and 2014, when the region's online leisure/unmanaged business travel market will approach US$16 billion. "Efforts among Middle East governments and investors to boost inbound travel – coupled with a predominantly young and increasingly tech-savvy population – are driving substantial travel industry growth," said Mona Faraj, research analyst, Middle East. "While challenges to online booking adoption remain, including strong loyalty to traditional travel agents and discomfort with online payments in some parts of the region, online travel bookings are set for impressive growth over the next two years." The United Arab...

Changing of the Guard: Japan Cedes Title as Asia's Largest Travel Market

Cathy Schetzina — 13 Mar 2013

Japan's dominance as Asia Pacific's largest travel market has come to an end, marking a major milestone for the region as an emerging China assumes the top spot. Following over a decade of economic stagnation, Japan's recovery from the March 2011 earthquake and tsunami has been sluggish, and the country's overall travel market growth will slow to 2% by 2015, according to a new PhoCusWright report. Yet Japan's online leisure/unmanaged business travel market, by far APAC's largest, will sustain double-digit growth through 2014. "Japan's travel industry has endured numerous challenges to growth for some time now, but the country's substantial online travel market should not be written off," said Douglas Quinby, senior director, research. "In fact, by 2015, the value of Japan's online travel gross bookings will still be more than double that of China." Air is Japan's fastest-growing travel segment, as the emergence of several low-cost airline carriers (LCCs), some backed by local...

U.S. Mobile Travel Bookings to Top US$25 Billion by 2014

PhoCusWright — 21 Feb 2013

Mobile travel bookings may have started out as a footnote on the balance sheet, but smartphones and tablets are on track to capture nearly one in five online travel dollars by 2014. According to a new report, PhoCusWright's U.S. Mobile Travel Report: Market Sizing and Consumer Trends, U.S. mobile leisure/unmanaged business travel bookings will more than triple from 2012 to 2014, when mobile bookings will reach US$25.8 billion. While using a mobile phone to purchase travel products is not yet mainstream, the share of travelers who have done so is growing. In 2012, three in ten mobile web users booked/purchased travel products such as hotel rooms or flights via their mobile phone, up from 26% in 2011. By comparison, more than eight in ten mobile web users viewed maps/directions via a mobile phone, while over half researched travel destinations or products. "Everyone knows mobile activity is booming, but it's hard for companies to know where they stand when growth rates are so...

Amid China's Torrid Online Travel Market Growth, Intermediaries Stand Out

Cathy Schetzina — 31 Jan 2013

If China's economy is slowing, no one told the country's online travel market. Visitors to travel websites in China are increasing nearly six times faster than total Internet traffic, with growth among the country's online travel agencies and metasearch sites leading the charge. According to PhoCusWright's China Online Travel Traffic Report Second Edition, created in partnership with comScore, fewer than one in five Internet users in China visited a travel website in 2Q12 – making travel among the country's smallest online categories. Yet online travel traffic during the quarter was greater than that in Australia, India and Japan combined. Visitors to travel websites in China jumped 40% year over year in 2Q12, compared to 7% growth for total Internet traffic. "Double and triple-digit gains are commonplace for travel websites across nearly all categories, including airline and hotel websites," said Douglas Quinby, PhoCusWright's senior director, research. "But it is...

All About the Add-Ons: Hotel Ancillary Revenue in Europe

Cathy Schetzina — 17 Jan 2013

The debate over airline ancillaries may steal the headlines, but hoteliers are increasingly getting in on the action. From breakfast and bike rentals to in-room entertainment and event tickets, ancillary sales offer a compelling way for hotels to boost their bottom line. According to a forthcoming PhoCusWright Analysis, Hotel Ancillary Revenue in Europe, European hospitality companies lag their U.S. counterparts in add-on revenue – but opportunity abounds. "The revenue potential for hotel ancillary sales is under-exploited in the European market," said Ralph Merten, PhoCusWright market analyst, Europe. "However, enabling technologies such as mobile and customer profiling continue to evolve, and personalized ancillary offerings could become a significant revenue stream for European hoteliers." Ancillary offers can either be provided by the hotel's own facilities/staff (e.g., spa and wellness) or by third parties (e.g., city passes, event tickets). To succeed, hotels must...

I'm on Vacation (and You're Not): U.S. Travelers Share Trip Experiences in Real Time

Cathy Schetzina — 20 Dec 2012

From slideshows and postcards to online travel reviews and social networking posts, travelers have always found a way to share their travel experiences. But U.S. travelers are increasingly using social networks to post about their trips as they travel, according to a new PhoCusWright report. In fact, travelers are more likely to post about trip experiences in the moment than when they get back home. Thirty-one percent of U.S. travelers who are active users of online social networks have posted comments/photos on a social network while traveling in the past twelve months. A smaller share (27%) report sharing travel-related comments/photos at home or work. "The convergence of mobile devices and social media is having a significant impact on traveler behavior, and sharing travel experiences as they happen is becoming the new norm," said Carroll Rheem, senior director, research. "With cameras nearly ubiquitous in mobile devices, much of the content shared is imagery, making...