Online travel suppliers need to build brand equity

July 20, 2006 |

While many consumers are beginning to migrate from online suppliers to branded airline, hotel and car rental sites, more than 80 percent of consumers rely on online agencies like Expedia for their travel research. This indicates significant opportunity for branded travel sites to win over the hearts of consumers to ultimately build brand equity.

The travel and leisure market is faced with the challenge of building brand equity with web savvy consumers, according to a recent national study by Guideline, Inc

The finding is despite the fact that more than a quarter of all leisure and unmanaged business travel was booked online in 2005 and is expected to grow to 35 percent in 2006.
The study reveals that half of all mainstream and luxury travelers visit four to six websites before booking a trip, and 54 percent of typical travelers are influenced more by the recommendations of friends and family.

To shed new insight on the purchasing patterns and motivators of consumers that book travel online, Guideline conducted an online survey of more than 400 consumers with household incomes of at least $100,000. In addition, those surveyed had taken a domestic or foreign vacation in the past two years. Furthermore, they segmented the respondents into “luxury travelers” and “mainstream” travelers, based on the average dollar amount spent on vacations.

Guideline’s business research analyst Jessica Hogue said, “Guideline’s study affirms that while many consumers are beginning to migrate from online suppliers to branded airline, hotel and car rental sites, more than 80 percent of consumers rely on online agencies like Expedia, Orbitz and Travelocity for their travel research. This indicates significant opportunity for branded travel sites to win over the hearts of consumers to ultimately build brand equity.”

The study also revealed that consumers, particularly those who book high-end travel packages, like the human touch. Nearly half (46 percent) of luxury travelers prefer to use a live travel agent and a quarter (25 percent) consult with tour operators. When it comes time to book the trip, 30 percent of luxury travelers prefer to use a personal service. Half of mainstream travelers prefer booking online via an online travel agency or travel search aggregator, suggesting that these travelers want to short- circuit the process and complete the transaction quickly, the company stated.

Further, when it comes to the dollar amount of a vacation booked online, 51 percent of luxury travelers are willing to book a $2,000 to $5,000 vacation package online. Another 29 percent are comfortable booking a $5,000 or more vacation package. However, this isn’t true of the standard traveler. A quarter (24 percent) would be willing to spend $2,000 to $5,000 for a vacation booked online. But, almost half of respondents are comfortable spending up to $1,000 and $2,000.

“In looking at consumer preferences and buyer behaviours, it’s clear that marketers have a significant opportunity to engage consumers throughout the entire travel process and make it easier for them to navigate and book travel online,” Hogue. “Travel suppliers also need to take note of how online travel agencies are becoming more `consumer-friendly’ and further differentiate themselves as experts and a trusted travel resource.”