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Online travel is as strong as ever

Online travel is as strong as ever

Travel Web sites are performing well in the midst of the broader travel industry downturn. PhoCusWright’s Online Traffic and Conversion Report, a new study conducted in partnership with Compete Inc., shows that monthly traffic and conversion is up in almost all travel categories in the second quarter of 2009, compared to the same quarter of previous years.

Despite the downturn, transactional Web sites (i.e., suppliers and online travel agencies) showed strong growth in June monthly visitors year-over-year, with cruise lines up 19% and hotel chains up 13%. Online travel agencies (OTAs) also showed slight increases in hotel and car rental visitor volume in the first half of 2009 compared to 2008 and 2007. The only category to show a decline in traffic from 2008 through 2009 was the OTA air category which is down 15%. This is not reflective of weak performance however, as OTA air conversion has increased significantly over the same time period.

“The reliance that consumers have on travel Web sites has not weakened one bit,” says Carroll Rheem, director, research at PhoCusWright. “Online channels are attracting, engaging and inspiring travelers who recognize that this year is actually a fantastic time to take a trip. Consumers are certainly spending less, but they are not giving up travel, nor are they turning away from the Web sites that offer them the selection and convenience they value.”

Travel suppliers and OTAs display a wide range in their ability to convert their online shoppers to purchasers. In 2009, monthly online conversion rates ranged from 19.7% for car rental suppliers to 0.2% for cruises booked via OTA. Suppliers generally garner higher conversion rates than OTAs. However, OTA conversion levels show a general upward trend in 2009. On the flip side of conversion is the much larger group of travelers who shop, but do not complete a booking. In 2009, this “leakage” remains remarkably consistent across all travel products.

“The online travel ecosystem now supports a diverse variety of transactional and informational sites—each playing a role in how consumers research, shop for and purchase travel,” adds Ms. Rheem. “For example, we found that visitation to planning and review sites drives dramatic differences in hotel conversion rates. Understanding the intricate relationships that connect all travel sites is essential to setting the right strategic path.”

Benchmark your site’s performance against the wealth of traffic and conversion data compiled by PhoCusWright and Compete Inc. PhoCusWright’s Online Traffic and Conversion Report is available for US$1,395—order before October 23 at the introductory rate of $1,195 (save 15%).

This report is immediately available for Global Edition subscribers at