Forrester Research: Forrester Retail Insights Travel First Look: Research & Event Highlights From Forrester

 14 July 2006
Key Factoids
Though just 6% of US leisure Bookers will book a cruise online, they'll generate $900 million worth of cruise sales doing so.

The typical Booker researches on 3.2 Web sites -- plus one offline resource -- to plan her trip.

Only 5% of North American online consumers who own a mobile phone report using a mobile Web site. The top reason they do so is that they're traveling, with no other form of Internet connectivity available.


Consumer Forum 2006
Forrester's Consumer Forum 2006: Humanizing The Digital Experience will feature C-level executives from Travelocity, Discover Financial Services, McDonald's, and the MIT Media Lab, as well as my colleagues Christine Spivey Overby, Harley Manning, and me. The conference is October 24-25 at The Palmer House Hilton in Chicago.


Is Your Company Considering Starting a Blog?
Travel marketing executives constantly ask Forrester whether they should start a blog, especially with firms like Boeing, Starwood Hotels, and Southwest Airlines now offering them. If you're looking for massive volumes of users, the answer is "no" -- just 2% of online travelers read blogs. That number will, of course, grow. Offering an internal, corporate blog is also a tactic travel companies are evaluating. My colleague Charlene Li just published a Forrester Wave™ evaluating leading blogging platforms across 54 criteria. Three firms -- iUpload, Six Apart (Movable Type), and WordPress -- emerged as the category leaders.


Get To Know The "M" Word: Merchandising
Any travel company -- whether B2C or B2B -- that doesn't recognize the importance of retail marketing is putting its future success at risk. Retailers know that, absent compelling product information, price becomes the only element consumers will use to shop. Travelers who think "a seat is a seat, a room is a room" do so because travel firms fail to adequately distinguish their product or brand from competitors. The Web provides an excellent merchandising platform for travel firms -- provided they know how to merchandise. My colleague Sucharita Mulpuru has published a compelling report that outlines best practices in online merchandising, covering topics such as personalization, site navigation, and upsells. It's an engaging and valuable piece of research that will give you a fresh perspective on a new strategy.


The Growing European eCommerce Market
Online commerce across Europe continues to grow, due to higher broadband penetration, better designed Web sites, and increased consumer comfort and confidence in online shopping. The UK and Germany generate the most online spending. Online travel will grow 133% in five years, from 32.9 billion euros in 2006 to 76.8 billion euros in 2011. But travel's dominance will decline as Europeans expand their online buying within other categories. As a result, online travel will decline from 32% of Europe's online retail spending in 2006 to 29% in 2011.


European Online Leisure Travel Growth Remains Strong
European Online Leisure Travel Growth Remains Strong

Search
Search Forrester's Web site.

 

Greetings from the Happy Booker!

It used to be that we could all count on a little slowing down of business activity during the summer, especially during July and August.

Like getting a pillow in Economy Class, those days are gone.

Fortunately, I find myself engaged with travel industry marketing, distribution, and strategy executives in truly interesting discussions. Why? Because the focus is shifting from cutting costs to growing revenues, by improving their customer experience and brand or product relevance. I'm also encouraged by the numerous travel companies, such as Jumeriah Hotels, Orbitz, and Northwest Airlines, that have begun to embrace various aspects of social networking -- a trend we brought to the industry's attention a year ago.

Some interesting things to bear in mind as summer breezes waft around us (or at least our office buildings):

  • Cross-channel Bookers deserve support, not scorn. In a perfect world, the Web would be able to handle every aspect of every traveler's planning, buying, and customer service needs. In a perfect world, I'd also have no body fat. But the world isn't perfect, which is a challenge for your business -- and my waistline. The challenge for your business is that 36% of Bookers call a travel company's customer service for assistance. These cross-channel travelers are important: They spend 28% more a year on leisure travel than those who don't call. Fortunately, what's needed to fix travel Web site flaws are generally simple and straightforward solutions. One example: Have your call center agents note when Web site users ask about missing or difficult-to-find content, so your eCommerce and Web site design team can pinpoint these for correction in future site overhauls.

Silver, Gold, And Platinum Travelers Have Distinct Attitudes Toward Travel And The Web

  • There are three segments of high-income travelers. Travel and eCommerce marketers who view all travelers with household incomes of more than $100,000 per year as one big mass will find themselves at the marketing poorhouse. We've identified three segments of high-income travelers: Silvers, Golds, and Platinums. Each is distinct, and each uses the Web differently to plan and buy travel. High-income travelers account for just 25% of all US online leisure Bookers -- but will represent nearly 44% of the $74.4 billion of leisure travel we forecast will be bought online this year.

  • Metasearch 2.0 is worth an evaluation. Forrester has been a vocal critic of travel search, also known as metasearch, and for good reason, especially as it pertains to airline distribution. Interviews with 10 network and low-cost airlines showed the frustration these executives have with high polling costs, mostly for faring, as well as slipshod management and unmet promises. The good news is that the travel search firms are maturing. Increased use of cached fare data, innovative technology like mashups and AJAX, and creative solutions to help travelers search for trips help make metasearch 2.0 a more viable distribution option. It's far from perfect: Airlines remain less than pleased with fare polling costs, and some travel search engines' business models frustrate industry executives. Even so, Forrester sees an opportunity for travel search to play a role in the travel distribution landscape.

It's summer, so we'll keep this issue of our newsletter brief. I hope we've given you some interesting information to think about, whether at your desk, or during a walk around the block on a balmy afternoon or evening. As always, if you've got a thought or a research topic, please email those to me at henryharteveldt@forrester.com.

Enjoy your summer!

Kind regards,
Henry H. Harteveldt


Research Referenced In This Issue

Emotive Networks Find A Role In Travel (37596)
Europe's eCommerce Forecast: 2006 To 2011 (38297)
How To Master Online Merchandising (38508)
Online Cruise Booking Sets Sail (38976)
Online Leisure Travel Forecast 2004-2009 (34099)
The Forrester Wave™: Blogging Platforms, Q2 2006 (37147)
The State Of The North American Mobile Web (39305)
The Three Segments Of High-Income Travelers (39666)
Travel's Call Center Blues (39237)
TravelCom 2006: Focus, Refine, Progress (39409)
What Travel Metasearch 2.0 Must Do To Win (36824)


EMAIL: Email this issue to a colleague.

PRINT: View a printer-friendly version of this issue.

VIEW ARCHIVE: View past issues of First Look.

TECHNICAL SUPPORT: Call the Client Resource Center
1 866/FORRESTER (1 866/367-7378) or +1 617/613-5730.

EMAIL SUBSCRIPTIONS: If you'd like to subscribe or unsubscribe to First Look, please go to your Email Subscriptions page.


Entire contents © 1997-2006, Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, Forrester's Ultimate Consumer Panel, WholeView 2, Technographics, TechRankings, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. Forrester clients may make one attributed copy or slide of each figure contained herein. Additional reproduction is strictly prohibited. For additional reproduction rights and usage information, go to www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.

Forrester Research, Inc., 400 Technology Square, Cambridge, MA 02139