eMarketer estimates that US digital travel sales—which include leisure and unmanaged business travel purchased online and via mobile devices—will slowly but steadily increase between 2013 and 2017, achieving a 5.36% compound annual growth rate (CAGR), according to a new eMarketer report, “US Digital Travel Sales: Mobile Drives Changes in a Mature Marketplace.” The total will reach $136.4 billion in 2013, an 8% increase from 2012.
Despite these gains, travel will continue to lose share as a subset of overall business-to-consumer (B2C) ecommerce because online travel is considerably more mature than other types of online retail. eMarketer estimates that travel made up approximately 36% of all B2C ecommerce sales last year, but by 2016, that share will drop to less than 30% and continue to fall steadily.
Digital travel as a percentage of total travel will remain high, however. Digital travel sales accounted for more than 40% of total travel sales in 2012, according to PhoCusWright figures released in November 2012.
Data specifically identifying internet users who have traveled in the past year shows high digital researcher and booker penetration levels across all travel categories. In their May 2012 “Consumer Barometer” survey, Google, Interactive Advertising Bureau (IAB) Europe and TNS Infratest found that 81% of US internet users who had booked travel in the past 12 months had researched their trips online, while 74% of respondents had booked online.
During the recession, online travel agencies (OTAs) achieved prominence and sped up the trend toward booking travel online. As the economy continues to strengthen, travel brands are focusing on reversing this trend and driving more full-price bookings directly from their own websites—a model known as “direct distribution.” According to PhoCusWright, this strategy has so far been successful, and by 2014, two-thirds of all online bookings for hotels, cruises and airline tickets will be made through suppliers’ websites, rather than through third-party OTAs.
Hotel data from TravelClick confirmed that all online channels are gaining market share in terms of actual reservations as well. (TravelClick’s data covers the top 25 markets in North America, all of which are in the US save Toronto.) Hotel websites—the leading reservations channel for all online and offline bookings—gained more than half a percentage point in market share in 2012, growing from 26.1% to 26.7%. During that time, OTAs’ market share rose more sharply from a smaller base, garnering 10.4% of total hotel bookings, up from 9.5% in 2011.
While digital travel sales overall will experience slow, steady growth during the next few years, one component will grow sharply: mobile booking.
eMarketer’s estimate for mobile travel sales—which includes both tablets and smartphones—will nearly double this year, increasing from $7 billion to $13.6 billion. The 2013 estimate will account for 10% of the total digital travel market. By 2017, eMarketer estimates mobile travel sales will total nearly $50 billion, and account for almost 30% of all digital travel sales.
eMarketer estimates that in 2013, nearly 50 million US consumers will research travel on their smartphones and tablets, accounting for approximately 40% of all digital travel researchers.
The full report, “US Digital Travel Sales: Mobile Drives Changes in a Mature Marketplace” also answers these key questions:
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