Online travel booking conversion rates are improving

November 18, 2005 |

While the number of Americans using the Internet appears to have reached a plateau, those who plan and book trips or vacations online continues to climb rapidly, according to a new study released by the Travel Industry Association of America.

While the number of Americans using the Internet appears to have reached a plateau, those who plan and book trips or vacations online continues to climb rapidly , according to the Travelers’ Use of the Internet, 2005 Edition, released by the Travel Industry Association of America (TIA).

The annual report, this year issued jointly with TIA co-sponsor and contributor USDM, shows that the Internet continues to grow as a dominant channel for both reaching and transacting with today’s travel consumers. In fact, while growth in the number of U.S. adult travelers using the Internet for any purpose has slowed, the number of online travelers who used the Internet to actually plan and book trips grew significantly this past year.

Survey results indicate a majority of online travelers (78 percent or 79 million Americans) turned to the Internet for travel or destination information in 2005 – much higher than the 65 percent of online travelers in 2004.

Survey findings also indicate that 82 percent of travelers who plan their trips online now also book reservations online. That indicates more than 64 million Americans bought or reserved an airline ticket, hotel room, rental car or package tour online this past year – up from 70 percent in 2004.

“Americans are turning to the Internet to plan and book their trips in greater numbers than ever before and it’s become increasingly obvious that the way we sell and distribute travel has changed forever,” said Dr. Suzanne Cook, TIA’s Senior Vice President of Research. “With the increases in online travel planning, other planning sources have declined, such as traditional travel agents.”

“Our research shows that women now outnumber men online and that women are more likely to plan and book leisure trips,” noted Dr. Cook. “It’s important that travel companies pay attention to that demographic and market themselves accordingly.”

Other trends and data to emerge from the Travelers’ Use of the Internet 2005:

More than nine out of 10 online travel planners said they used the Internet to plan a personal trip last year, while a quarter planned business trips online;

The most popular types of Web sites used for travel planning are online travel agency Web sites such as Expedia, Travelocity and Priceline (67 percent); search engine Web sites such as Google or Yahoo! (64 percent); and company-owned Web sites for airlines and hotels (54 percent);

Almost half of online travel planners also use destination Web sites – such as those maintained by convention and visitor bureaus – to plan trips. In addition, one in three online travel planners checks one or more Web sites and then calls a toll-free number for more information;

With the increases in online travel planning, other planning sources have declined, such as traditional travel agents – down to 31 percent consulting a travel agent for travel plans in the past year from 39 percent last year;

Today, 34 percent of online travel bookers claim to make all of their travel purchases online. Importantly, nearly eight in ten online bookers (78%) use the Internet to do at least half of all their travel booking.

Airline tickets, lodging and rental cars continue to be the top three travel items booked online. However, there was significant growth in online bookings for cultural event tickets, theme/amusement park tickets, travel packages and tickets for sporting events.

Leisure travelers spent an average of $1,288 when booking their most recent trip online in 2005; business travelers spent an average of $1,357 when booking their most recent trip on the Internet.

When it comes to leisure travel, women are more likely to be online travel planners (56%) and bookers (55%). With so many Americans planning and booking their travel online, TIA and USDM expanded the survey this year to better gauge how consumers respond to the various forms of Internet-based marketing communications.

The 2005 report shows that the most effective online marketing techniques that trigger a consumer response are unsponsored search engine results (36 percent); e-mail recommendations by friends or colleagues (34 percent); links on Web sites (26 percent); and opt-in e-mails or e-newsletters (21 percent).

“As this year’s survey results clearly show, consumers are much more responsive to strategic online marketing communications, such as organic search engine returns, than they are to paid media, such as a pop-up or banner ads,” said Jennifer Barbee, President of USDM.net.

“While online media is productive and valuable, travel industry suppliers may want to reconsider their budget allotments for online and traditional media versus online marketing,” Barbee said. “Those savvy enough to invest more travel marketing dollars in a strategic, online marketing campaign could reap much bigger rewards for their destination, hotel, attraction or other travel business.”