Four in 10 online travel shoppers have shopped an online travel agency site, but ultimately purchased direct from a supplier, according to a new report published by PhoCusWright Inc. This behavior is more pronounced for air than any other segment. Findings from the newly released The PhoCusWright Consumer Travel Trends Survey Seventh Edition, which surveys "online travelers" in the U.S., found that nearly half of online travel shoppers have looked at online travel agencies but ultimately purchased direct from an airline (either through the call center or Web site). That compares to three out of 10 who have shopped online travel agencies but ultimately purchased direct from a hotel or car rental company.
Clearly loyalty remains elusive for online travel agencies and suppliers alike. But in the past two years, online travel agencies have been losing coveted customers to the supplier-direct channel, which includes the supplier Web site and call center. Low price guarantees, loyalty points, and improved Web site navigation and services have impacted this shift.
In fact, more than twice as many online travelers (36%) believe that the supplier-direct channel provides the best customer service compared to 15% who choose the online travel agency channel. Even offline agencies, which are coveted for their personal touch in a technology-driven world, did not fare as well, with 33% claiming they provide the best customer service.
An even more compelling finding is that nearly four out of 10 (38%) online travelers believe that suppliers offer the lowest prices, up from just 14% in 2002 - a 24-point gain in two years. Despite this improvement, more shoppers (45%) still think that online travel agencies offer the lowest prices - by far their largest asset in the minds of consumers. Online shoppers believe that suppliers offer the lowest fees (44% vs. 29%), most bonus miles/loyalty reward points (51% vs. 14%), and an easier change/cancellation policy (39% vs. 17%) compared to online travel agencies.
"Online agencies have lost their footing with leisure travelers in 2004 as a result of aggressive supplier efforts to better manage inventory and win business through a combination of online and offline direct channels," according to Susan Steinbrink, PhoCusWright analyst and author of the report. "The key to their long-term, Internet survival will be in successfully upselling the customer with valued multiple travel components." The PhoCusWright Consumer Travel Trends Survey Seventh Edition examines consumers' online packaging habits and compares "switchers" and "loyalists."
For the past seven years, PhoCusWright Inc. has conducted a nationally representative Consumer Travel Trends Survey among online travelers to ascertain data on travel shopping and purchase behavior. To qualify for this study, respondents had to indicate if they 1) had personally taken a trip by commercial airline in the last 12 months, and 2) had used the Internet in the last month. A total of 500 interviews were conducted via telephone from International Communications Research/ICR's centralized telephone center between Oct. 6 and Oct. 16, 2004.
The PhoCusWright Consumer Travel Trends Survey Seventh Edition combines seven years of data providing a perspective on the evolution of online travel through the consumers’ eyes, distinguishes among leisure and business travelers and monitors some of the industry’s hottest trends, including impact of service fees, price guarantees and loyalty programs. It is the first report in this series to monitor online timeshare/vacation rental purchases. The 43 page report containing 45 tables is available for individual purchase. Download complete list of tables, overview, demographic profile of study participants and questionnaire.The PhoCusWright Consumer Travel Trends Survey Seventh Edition is on The PhoCusWright Channel for subscribers.
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