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

 30 March 2006
Key Factoids
Asia Pacific airlines were expected to generate 15.7% of their revenues online in 2005. By 2010, they estimate this will reach 42% of revenues.

Twenty-two percent of US leisure airline passengers are interested in high-speed, in-flight Internet access on a flight of 4 hours or longer.

Twenty-eight percent of US online leisure travelers book through one of the "Big Three" online travel agencies: Expedia, Orbitz, and Travelocity.


Will I See You At TravelCom?
Forrester has had a long association with TravelCom. Now owned by the Travel Industry Association of America (TIA), TravelCom 2006 promises to continue its role as the leading springtime travel industry eCommerce conference. As usual, Forrester will present findings from a brand-new consumer research study at TravelCom 2006.


All Airlines Are Alike, Right? Wrong!
Airline-bashing may remain popular on late-night TV, and some aspects of air travel aren't all that pleasant. But the truth is that 81% of airline passengers routinely choose one airline over another when they fly. Value, self-service technology, and product help distinguish carriers from one another. Southwest Airlines lands first for satisfying passengers -- and for creating a sense of pride among them as well.


Have You Registered Your ".travel" Domain Yet?
The new ".travel" sponsored top-level domain name is active, and more than 16,000 travel companies have registered. If you haven't registered your domain, do so, especially if your business or brand uses common words like "American" rather than a coined word like "Hotwire." Destination marketing organizations like CVBs and smaller travel firms will see the most immediate benefit of .travel.


When The Web Fails Travelers
Our newest piece of travel research examines why Web travelers research online and buy offline. We've identified three root causes for this cross-channel shopping: 1) distrust and confusion; 2) an inability to accomplish their goals; and 3) purchase and payment insecurities. Although some travelers will never be comfortable buying online, forward-thinking travel companies will reexamine their customer experience, ideally making sure that they remove, or at least reduce, any barriers to purchase.


Need A Hand With A Project? How About 400?
2006 marks my sixth year at Forrester. I'm proud to be one of 200 Forrester analysts who offer our clients pragmatic advice on the impact that technology has on their businesses. Allow me to introduce you to some of my colleagues:

Peter Kim is in our Marketing Strategy & Technology research team. Want help understanding the effect of word-of-mouth marketing and consumer media behavior? Peter can help.

Randy Heffner created the concept of Digital Business Architecture (DBA), one of our major IT research themes for 2006. DBA provides an IT foundation for business flexibility.

Bill Band has extensive knowledge of the CRM vendor landscape. He's also the author of two business strategy books -- how cool is that?

Harley Manning, on our Customer Experience research team, is our knowledge expert on persona development, Web site design, and cross-channel reviews.


Consumers See The Benefits And Detriments Of Being Online
Consumers See The Benefits And Detriments Of Being Online

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Greetings from the Happy Booker!

Ah, spring. Some people take their cues on this season of renewal by visiting nurseries to get ideas for their gardens. For others, baseball spring training reminds them that warmer times are close. Still others look to the more colorful clothing we start to see in stores around this time of year.

But not me. Oh no. For yours truly, my cue that warmer times approach is the endless stream of breathless press releases and emails urging me to take advantage of spring break special offers (I'm not going to tell you when I last went on spring break) or book a cruise before they're all sold out, as well as my personal favorite, airline summer schedule announcements. Who knew so many people want to go Rockford, Ill.?

Well, no one ever accused me of being normal.

And guess what? I'm not the only one being besieged with all these offers. Tempting as they may all be, the typical Web traveler takes four leisure trips per year. That's just one trip per quarter. So how, I ask you, will your company -- or your client's company -- capture these sales?

Not by sticking to the status quo.

Our new Leisure Travel Data Overview -- fresh off the virtual presses -- illustrates the challenges that travel executives in marketing, distribution, and IT must address. For example:

  • Online travel remains robust. Four out of five online Americans take at least one leisure trip per year. The vast majority -- 59% -- are Bookers, Web travelers who research and buy online. They book 57% of their trips on the Web.
  • Brand loyalty remains weak. Thirty-seven percent of US online leisure travelers say they aren't brand-loyal, versus only 26% who are. Do you still think you can rely on loyalty programs?
  • Web travelers want something fresh. Twenty-seven percent of Web travelers admit they constantly look for new ways to entertain themselves, and more than six in 10 regularly shop around before they buy their trip.


Leisure Travel Data Overview

  • Price is still important. Six in 10 US online leisure travelers age 40 to 54 say they usually purchase the lowest-price travel option available, and nearly half of this same group say they focus more on the price they pay than the company they buy from, or travel with. There go your look-to-book ratios.

Against this background, the industry must -- I repeat, must -- begin to focus on differentiation. How? With a strategy we at Forrester call "experience-based differentiation." It takes a combination of elements, such as the Web, product delivery, and interactive elements like blogs or podcasts, and nests them together in a manner that infuses a brand with a unique set of distinguishing characteristics.

Why is this so important? Most travelers shop across different channels -- online and offline -- and points of sale, such as metasearch, Web agencies, and supplier call centers and Web sites. And most are equally pleased with whatever two channels they use. Problem is, when everyone wins, no one wins. So what should you do?

  • If you're a supplier, enrich your shopping experience. Make sure no other site offers more relevant insight and perspective about your products, benefits, and prices than you. And look into new touchpoints, like mobile devices.
  • If you're an intermediary, such as a travel agency, focus on ways to better monetize the research process and institute more creative ways of shopping. Does the traveler searching for a trip to Houston want to specifically visit Houston, a southwestern city, or a destination with lots of humidity and big hair? As an intermediary, you've got access to a wider selection of product than any single supplier. Work it!
  • If you' offer a research tool like a metasearch site or general search engine, consider developing personas that your customers can use to better target their keyword buys -- potentially at a premium.

No matter what you do, I hope you'll be able to take some time to enjoy spring, whether it's in the garden, at a spring training game, or even perusing airline schedules. And as always, if you have suggestions on research topics you'd like us to consider, please email them to me at henryharteveldt@forrester.com.

Kind regards,
Henry H. Harteveldt



Research Referenced In This Issue

.travel: Nice, But Not Necessary (38975)
Asia Pacific Airlines Are Bullish About The Web (38213)
Leisure Travel Data Overview (37715)
Leisure Travelers' Most Wanted In-Flight Services (38413)
Over The Edge: When The Web Fails Travelers (39006)
The Travel Retail Satisfaction Smackdown (38358)
Who Books With The Big Three Web Agencies? (37714)
Why Airlines Land Leisure Passengers (38175)


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