Hotels have been working hard to win more travelers to "book direct" on their companies' websites, but are consumers listening?
In fact, hotels are not alone. All service providers in the hospitality and tourism industry want their customers to make purchases directly on their websites, but consumers want to search and compare various options before making a decision.
So, to convince customers to purchase directly on the service providers' websites, companies must understand where their customers "hang out" in the cyber marketplace before they make the purchasing decision, as well as where they end up buying their services.
The white paper "Understanding the Travel Consumer's Path to Purchase" by Eye for Travel provides some business intelligence in that regard. The report combined a large panel consumer data of online transactions and surveys into the analysis, revealing the following results:
The places where customers purchase a travel product
With an analysis of about 200,000 bookings in the U.K. and the U.S., online travel agents (OTAs) such as Expedia and Priceline are winning big in the competition.
In the U.S. market, 42 percent of purchases came from OTAs, leaving 39 percent for airline brands and 19 percent for hotel brands. In the U.K. market, 73 percent of purchases came from OTAs, 23 percent from airline brands and only 4 percent from hotel brands.
The devices used for buying the travel product
Devices being used for hotel reservations:
- Desktop or laptop (49.9 percent from the U.K. sample / 62.1 percent from the German sample)
- Face-to-face (6.1 percent / 11 percent)
- Tablet browser (17.3 percent / 5.5 percent)
Devices being used for flight bookings:
- Desktop or laptop (51 percent from the U.K. sample / 56.1 percent from the German sample)
- Face-to-face (9.3 percent / 20.1 percent)
- Tablet browser (15.2 percent / 4.4 percent)
Desktops or laptops remain the most-used devices for making a purchase, and desktops have higher conversion rates for all OTAs, all airline brands and all hotel brands than mobile devices. But before consumers make a purchase, let's also check out ...
The devices used for browsing before making a purchase
- 80.7 percent of those who used desktops or laptops to search also used the same device to book.
- 63.8 percent of those who used tablets to search also used tablets to book; 21.3 percent of those who used tablets to search ended up using desktops or laptops to book.
- 36.2 percent of those who used smartphones to search would use desktops or laptops to book; about the same percentage, 35.1 percent, of those who used smartphones to search also used smartphones to book.
The websites visited before making a purchase
For a purchase on OTAs, about 90 percent used search engines, about 75 percent visited the OTA site prior to conversion, and about 25 percent visited the competitor OTA sites prior to conversion.
For a purchase on an airline website: about 90 percent visited search engines, between 69 and 84 percent visited the airline website prior to conversion (across three samples of the U.S., the U.K., and Germany). Depending on the regions of where the customers came from, over 20 percent also visited a social media site such as Facebook or Twitter (U.S.), a meta-search site such as Kayak or Trivago (U.K.), or an OTA site (U.K. and Germany).
For a purchase on a hotel website: about 90 percent used search engines, about 70 percent visited the hotel website prior to conversion, and about 20 percent visited an OTA site.
Where do smartphones fit in?
It seems smartphones played a more significant role in both the researching and purchasing processes for consumers in less developed countries than those in developed countries. For example, 66 percent of Indians accessed travel websites with mobile devices, but only 34 percent of them used desktops. In the U.S., such percentages changed to 54 percent for using mobile devices and 46 percent for using desktops.
Not surprisingly, a large percentage of consumers aged between 18 and 34 owned at least one smartphone. For example, 85 percent of Chinese aged between 18 and 34 owned at least one smartphone, but only 43 percent of Chinese aged 35 or above used smartphones.
Another good example came from the U.K. consumers aged between 18 and 35. When asked if they researched and/or booked air travel on a smartphone in the past, over 90 percent of participants said so. Specifically,
- 23.4 percent always booked flights on a smartphone.
- 22.9 percent regularly booked flights on a smartphone.
- 21.8 percent occasionally booked flights on a smartphone.
- 22.1 percent researched flight information using a smartphone even though they did not book with a smartphone.
What are the next big things?
The top two "game-changing" factors in the industry were mentioned:
- Data-driven personalization (78 percent of participants being surveyed)
- API-led (application programming interface) distribution partnership (14 percent)
The top three areas for future opportunities include:
- Mobile (79 percent from European respondents / 74.7 percent from North American respondents)
- Content and digital marketing (58.8 percent / 65.3 percent)
- Social media (35.3 percent / 50 percent)
Other possibilities or opportunities may include:
- Will search engines become the next big player in selling travel products? Many consumers have already been using search engines to research products, so why can't Google Travel or Bing Travel become the next big thing?
- Can Facebook get into the game, too? Facebook has tried to let its users make purchases on a business's page, rate a business or service and make recommendations of purchases for their friends. Most of all, the hospitality and tourism industry is too big to be ignored.
- Will Apple try Apple Travel, too? At least, Apple can easily reach all the Apple users.
- Will WeChat dominate the Chinese marketing in selling travel products? I tried to make hotel reservations on WeChat because I could not find good internet connections when I was traveling in mainland China, and WeChat became very handy.
Now, do you have a better idea of where travel or hospitality companies can reach their target customers in the cyber marketplace? Tell us what else you want to know. Your voice could inspire the next big research project.
This post was also published on MultiBriefs Exclusive, the leading source for targeted, industry-specific news briefs.
