Compete Google Destination Webinar

Google Confidential and Proprietary

Google & Compete Present:

Understanding Destination Travel Shopping

June 16, 2009


Contents

1 Overview & Methodology

2 Consumer Outlook for Destination Travel

3 How Destination Travel is Shopped Today

4 Opportunities for Travel Marketers

5 Appendix


Overview & Methodology

OverviewThe purpose of this study is to understand how consumers make decisions in their

destination travel shopping, and what is important to them as they research and book.

Specifically, this study seeks to use clickstream data to break down the online destination

travel shopping process, and to use survey data to quantify consumer attitudes and

feelings about this process.

Methodology• Clickstream Analysis

– Conducted on Compete’s proprietary U.S. consumer panel

– Timeframe: April 2008 April 2009

• Focus on consumers shopping specific list of leisure destinations

• Behavior studied across thousands of travel content and booking websites

– Segmented into groups of panelists researching each destination of interest

• Survey– Compete invited consumers who had recently booked leisure destination travel or planned to soon do so

– Fielded 4/18/09 – 4/23/09

– Sample size = 1406 qualified respondents


Key Findings

Destination travelers are optimistic and can be influenced:

Travel Research & Bookings continue to rise, with strong growth in Q1 2009 vs. the previous year

Affordability is a critical factor in choosing a destination

Search is the most widely used sources to learn about or choose a destination

Research and search behavior varies by destination type

Over 70% of searches occur prior to the day of booking


Contents





5 Appendix


0%

2%

4%

6%

8%

10%

12%

14%

16%

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

Researchers Bookers Booking Rate

Online travel activity is near all time highs

Online Travel Researchers & Bookers(Volume of US consumers researching or booking air, hotel, car, cruise, or package)

• 30 million US consumers researched travel in April 2009, down slightly from

record in March

Read As:

30 million U.S. consumers

researched travel online in April

2009, and 14% or 4.1 million

had at least one booking


80% of travelers plan on as many or more trips in ’09 as compared to ‘08

Thinking about leisure trips you have taken or may take in 2009, the number of trips will be…(n=1406, all consumers in-market for or recently booked destination travel)

• While some consumers plan to cut back, even more expect to add on

20%

57%

23%

Less than 2008 About the Same as 2008

More than 2008

Source: QS11 – “Thinking about any leisure trips you may take in 2009, would you say the number of trips you'll take will be...” N=1406


Many leisure travelers can be influenced in choosing a destination

Which statement best describes how you think about planning your leisure travel?(n=1406, all consumers in-market for or recently booked destination travel)

• 35% know their ideal type of destination but have not selected one

specifically; additional 4% completely undecided

61%

35%

4%

Know exactly where I want to go

Know type of destination I want, but do not have specific one in mind

Neither a type nor a specific destination in mind

Source: QS1 – “Which of the following statements best describes how you think about planning your leisure travel?” N=1406


Most interest among U.S. consumers is for domestic trips

Are you considering domestic or international destinations for your next leisure trip?(n=731, only consumers in-market for upcoming or in planning destination travel)

• About 8% considering both domestic and international

82%

26%

Domestic International

Top Domestic

Destinations

ConsideredLas Vegas – 19%

Orlando – 15%

New York City – 10%

Honolulu – 10%

Wash DC – 9%

Maui – 9%

Miami – 8%

San Diego – 7%

San Francisco – 7%

Los Angeles – 7%

Top International

Destinations

ConsideredMexico – 29%

Italy – 22%

Bahamas – 20%

Japan – 13%

Ireland – 12%

Jamaica – 12%

Aruba – 11%

France – 11%

Canada – 11%

Puerto Rico – 11%

Source: QD2A – “Are you considering domestic or international destinations for your upcoming leisure trip?” N=731

Source: QD3A – “Specifically, which of the following domestic destinations have you considered for your upcoming leisure trip?” N=598

Source: QD4A – “Specifically, which of the following international destinations have you considered for your upcoming leisure trip?” N=191


Over half of consumers spend 2+ weeks considering destination types

How much time do you spend in each phase of the travel planning process?(n=1406, all consumers in-market for or recently booked destination travel)

• Once decided, 78% spend 1+ week shopping for components, looking for

deals

9%

2%

4%

34%

20%

18%

23%

26%

22%

23%

36%

35%

10%

15%

22%

Finalizing & booking trip components

Shopping for trip components, looking for

deals

Considering various types of destinations

1 Day 1 Day - 1 Wk 1-2 Wks 2 Wks - 2 Mos Over 2 Mos

Source: QS2 – “Approximately how much time do you typically spend in each of the following phases of the travel planning process?” N=1406


36%

18% 20% 17% 16% 14%

43%

22% 15% 15%12%

8%

Affordable destination

Family friendly

Direct flight available

No car rental

required

No flight required

Couple friendly (eg,

no kids)

Destination for seniors

GLBT friendly

Very important Extremely important

Travelers’ top priority is destination affordability

How important are each of the following in choosing the destination for your trip?(n=1406, all consumers in-market for or recently booked destination travel)

• Many shoppers also place heavy emphasis on family-friendly trips

Top 2: 79%

40%35% 32%

28%22%

9% 7%

Source: QD8 – “How important are each of the following in choosing the destination for your trip?” N=1406


Consideration of upscale hotels likely driven by promotions

Which accommodations did you / do you plan to book for your upcoming trip?(n=1112, only consumers in-market for or recently booked lodging for destination travel)

• 35% of shoppers are expecting to book an upscale / full service property on

their next trip

38%35%

18%15% 15%

9% 9%7% 5%

Mid-scale hotel

Upscale hotel

Economy hotel

All-inclusive Vacation rental

Bed & Breakfast

Luxury hotel Other Boutique hotel

Source: QD7, QD7A – “You mentioned booking lodging. Which types of accommodations <did you book / do you plan to book>?” N=1112


Accommodation upgrades are the most popular upsell

Please select which you are most willing to pay for when you take a leisure trip.(n=1406, all consumers in-market for or recently booked destination travel)

• The first choice for 31% of consumers is to pay more for accommodations at

their existing destination

31%

27%

13% 13%

8%

5% 4%

Accommodations at destination

Visiting specific destination over

others

Dining and restaurants

Vacation activities

Tours & activities at destination

Travel upgrades to/at destination

Shopping at my destination

Source: QS10 – “Now, please think about what you are most willing to pay for when you take a leisure trip. Please rank the following from

most willing to pay for (1) to least willing to pay for (7).” N=1406


Package sellers must raise awareness of potential savings & affordability

How did you or do you plan to purchase your trip components?(n=1027, only consumers in-market for or recently booked relevant travel components for destination travel)

• Only 24% expect to book components of their next trip in a bundled package

76%

24%

As a package

Individually

Source: QD5A – “How <did you book / do you plan to book> your trip components?” N=1027


39% 37%33% 33%

23%17% 15% 13%

24% 24%

23%15%

14%

8%7%

6%

Sightseeing Entertainment & amusement

Nature & outdoor activities

Parks & gardens

Art and culture Sports & recreation

Adventure sports

Social activities /

meet people

Very important Extremely important

Destination shoppers want a mix of activities available

How important is it that the destination have the following entertainment or activities?(n=1406, all consumers in-market for or recently booked destination travel)

• Entertainment, sightseeing, outdoor activities, all important to most shoppers

Top 2: 63% 61%

55%

49%

38%

25%22% 19%

Source: QD9 – “How important is it that your destinations have the following entertainment or activities available?” N=1406


Almost everyone turns to the Internet to learn about and choose destinations

Which of the following do you use to learn about or choose leisure travel destinations?(n=1406, all consumers in-market for or recently booked destination travel)

• Heavy influence of family & friends for deciding on destinations

95%

66%

53%44%

27% 26% 24%18%

12% 10%5%

Internet Family & Friends

Brochures Magazines Books TV News papers

Travel agents

800 Number

Travel groups

Radio

Source: QS3 – “Which of the following sources do you use to learn about or choose leisure travel destinations?” N=1406


15%

15%

20%

26%

38%

38%

41%

54%

59%

63%

66%

72%

Travel Planning Sites

Tour Operator Sites

General Discount …

Cruise Line Sites

Car Rental Sites

Travel Search Sites

Travel Review Sites

Destination Sites

Airline Sites

Hotel Sites

Online Travel Agency

Search engine

Search is the #1 online channel for destination research

Which online sources do you use to learn about or choose vacation destinations?(n=1339, only consumers in-market for or recently booked destination travel who use the Internet)

• A mix of other travel site categories are used as research sources, yet

search eclipses even Online Travel Agencies

Source: QS6 – “Specifically, which of the following online sources do you use to learn about or choose vacation destinations? ” N=1339


Destination shoppers are attentive to search & email offers

Which advertisements do you typically pay attention to while planning your leisure travel?(n=1403, consumers in-market or recently booked destination travel who used any research source)

• Search and email provide an effective channel to reach new and repeat

customers

46% 45%

33%30% 30%

14% 13%9% 8%

Email offers

Search engine listings

Magazine ads

TV ads Direct mail Online banner

ads

Online video ads

Radio ads Outdoor ads

Source: QS8 – “Which of the following types of advertisements, if any, do you typically pay attention to while planning your leisure travel? ” N=1403


Contents





5 Appendix


The research process is intricate and multi-phased

Average User Statistics 30 Days Before Booking (14 Destination Aggregate, destination shopping behavior summary, Jan-Apr 2009)

• Activity levels before booking are very strong

Time Spent

Researching Online

4 hours

Unique Travel

Sites Used

20 sites

Search Referrals

to Travel Sites

5 clicks


Travel Site Visits Made Per Consumer 30 Days Before Booking(total visits across all travel sites by consumers who ended up booking each destination, Jan-Apr 2009)

• Consumers booking destinations such as Bahamas, Caribbean, Hawaii are

nearly twice as active in the research phase

• Individual sites are frequented more than once on average

Foreign/exotic destinations inspire more thorough research

22.2 21.4

18.4 18.0 17.4 16.1 15.9 15.3 14.8 14.6 14.6 14.6 14.5 13.9 13.3

1.4 1.8 1.4 1.3 1.3 1.6 1.2 1.3 1.3 1.1 1.2 1.3 1.2 1.2 1.8

Unique Travel Sites Used

Visits Per Site


Exotic locations tend to attract higher search volumes

Volume of Travel Searches 30 Days Before Booking(volume of total search clicks to travel sites in 30 days before online transaction, Jan-Apr 2009)

• Caribbean destinations studied all had over 7 travel searches per booker in

the 30 days leading to purchase

9.2

8.0 7.5 7.4

5.9 5.6 5.4 5.1 4.6

4.0 3.9 3.9 3.9 3.7 3.5


71% of searches take place before the day of booking

Distribution of Searches By Time Period Before Booking (14 Destination Aggregate)

(percent of total search clicks to travel sites in each period before online transaction, Jan-Apr 2009)

• Researchers are most engaged one week prior to booking

4%

9%

18%

40%

29%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

4 Weeks Prior 3 Weeks Prior 2 Weeks Prior Week Prior Same Day

Time Before Booking Made


OTAs are not capturing destination shoppers early

Distribution of Travel Searches: Category Clicked & Time Period (14 Dest Aggregate)

(percent of total search clicks to travel sites in each period before online transaction, Jan-Apr 2009)

• The majority of clicks happen prior to the day of purchase, yet OTA’s capture

lower share each previous period

30%

23%

20%

18%

18%

17%

16%

16%

16%

19%

13%

10%

10%

11%

10%

7%

9%

9%

10%

8%

6%

8%

10%

11%

10%

Day of Booking

Prior Week

2 Weeks Prior

3 Weeks Prior

4 Weeks Prior

OTAs Airlines Hotel Chains Planning & Reviews

Destination Sites Car Rental Other


Performance in capturing search clicks can vary depending on the type of destination researched

Distribution of Searches by Category Clicked (select destinations)

(percent of total search clicks to travel sites in each category for 30 days before transaction, Jan-Apr 2009)

• Destination sites consistently capturing 8-10% of search activity

19%

22%

21%

30%

25%

24%

14%

13%

16%

18%

17%

17%

9%

18%

10%

6%

13%

8%

17%

6%

12%

6%

9%

10%

8%

10%

7%

7%

8%

9%

Caribbean

Chicago

Hawaii

Las Vegas

New York

Orlando


Destination Sites Travel Guides Car Rental Cruise Sites

Lead Generators Casinos Meta Search Vacation Rental

Other


Destination sites must better engage their search traffic

Distribution of Research Time On Travel Sites (select destinations)

(distribution into subcategories of total time spent consumers who ended up booking each destination, Jan-Apr 2009)

• Despite receiving almost 10% of search clicks, destination sites capture only

a tiny fraction of research time

26%

26%

28%

46%

35%

43%

19%

28%

29%

23%

29%

28%

9%

22%

12%

5%

13%

6%

17%

4%

6%

4%

5%

4%

Caribbean

Chicago

Hawaii

Las Vegas

New York

Orlando


Destination Sites Travel Guides Car Rental Cruise Sites

Lead Generators Casinos Meta Search Vacation Rental

Other


Contents





5 Appendix


Recap of Key Findings

Destination travelers are optimistic and can be influenced:

Travel Research & Bookings continue to rise, with strong growth in Q1 2009 vs. the previous year

Affordability is a critical factor in choosing a destination

Search is the most widely used sources to learn about or choose a destination

Research and search behavior varies by destination type

Over 70% of searches occur prior to the day of booking


Contents





5 Appendix


Individual Destinations Studied (clickstream section only)

Destination Studied• Atlanta

• Bahamas

• Caribbean

• Chicago

• Dallas

• Jamaica

• Hawaii

• Las Vegas

• Los Angeles

• Miami

• New York

• Orlando

• Puerto Rico

• San Francisco

• When referenced in the clickstream section of this study, “All” represents an

aggregation of the 14 destinations listed above


Website Categorization Examples (clickstream section only)

Orbitz

Priceline

Expedia

Travelocity

Online Travel

Agencies (OTA)

Southwest

United

JetBlue

Delta

Airlines

Apple Vacations

Funjet

Liberty Travel

Tauck

Vacation

Packagers

Travelzoo

ShermansTravel

Booking Buddy

Cheapflights

Lead Generators

Marriott

Kimpton

Choice Hotels

Holiday Inn

Hotel Chains

Kayak

Farecast/MSN

Mobissimo

Sidestep

Meta Search

Hertz

Budget

Thrifty

Avis

Car Rental

MGM Grand

Mandalay Bay

Wynn Las Vegas

Foxwoods

Casinos

Disney

Sandals

Atlantis

Nick Hotel

Independents &

Resorts

Royal Caribbean

Princess

Celebrity

Carnival

Cruise Lines

Vacations To Go

Cruises Only

Cruise.com

CruisesInc.com

Cruise Agencies

Amtrak

Greyhound

Peter Pan

Rail Europe.com

Bus & Train

VacationClub.com

Homeaway.com

Flipkey.com

GreatRentals.com

Vacation Rental

BuschGardens.com

CedarPoint.com

HersheyPA.com

Seaworld.com

Theme Parks

FlightArrivals.com

FlightInfo.com

Flightview.com

Skyteam.com

Traveler

Information

10Best.com

Away.com

Fodors.com

Frommers.com

Travel Guides

Aruba.com

LAcvb.com

Denver.org

Arkansas.com

Destination &

Tourism

TripAdvisor.com

CruiseCritic.com

Viator.com

IgoUgo.com

Planning &

Reviews


Thank you

Technology

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