For online travel agencies (OTAs), the recession came with a silver lining. Despite taking a hit in 2009, OTAs outperformed supplier websites throughout the recession to emerge with a larger chunk of the online leisure and unmanaged business travel market, according to PhoCusWright’s U.S. Online Travel Overview Tenth Edition
Expedia, Priceline, Orbitz and Travelocity attracted bargain seekers with last-minute deals and fee cuts, yielding strong countercyclical performance for the OTA category in 2009 and 2010. OTA sales fell just 1% in 2009 while the total online leisure/unmanaged business travel market dropped 5%. In 2010, OTAs will grow at twice the rate of supplier websites to post double-digit gains.
OTAs and supplier websites react separately to economic forces and attract different types of customers – OTAs draw budget-conscious consumers while supplier websites lure more frequent, higher spending travelers. The latter group pulled back its spending the most in 2008 and 2009, limiting supplier website gains.
Despite growing at a slower rate than OTAs, supplier websites continue to dominate online leisure/unmanaged business travel sales. Supplier websites’ combined share reached a high of 62% in 2008, falling to 59% in 2010 amidst OTA success. With the rebound continuing, supplier websites will likely regain momentum as the OTAs fight to hold on to their share gains.
PhoCusWright projects a restrained recovery through 2011, varying by travel segment and distribution channel. Purchase PhoCusWright’s U.S. Online Travel Overview Tenth Edition to gain rich, actionable insight in the U.S. travel market. The report provides market sizing and forecasting through 2012 for all major travel segments (airlines, hotels, car rental, vacation packaging, cruise and rail) and key online and offline distribution channels (online travel agencies, supplier websites, and traditional travel agencies/offline supplier direct).
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