About this report

The Internet has proven itself as a major distribution channel for the travel industry, in that it widens the distribution of both travel-related content, pricing information, and travel planning tools for consumers. While it has aided in empowering consumers to research, plan and book their own travel, it has also created transparency, resulting in a much more price-sensitive shopper. Nonetheless, the travel industry is in a mode of recovery and the Internet is and will continue to be a critical channel for the industry, destinations, and consumers. It is anticipated that in 2005 one third of all travel will be sold online.

The U.S. economy is expected to enjoy healthy growth through 2005, and travel spending is increasing at an even greater rate than the overall economy. This growth can be attributed to growing Internet penetration, increased confidence among users, and improved technology, products and content from online travel companies. The Internet provides travelers with an ever increasing number of options, both in terms of the number of sites available and the information, services and products offered. This expansion of options has led to an intensification of competition among travel providers and suppliers, with many companies battling for the online customer.

Internet use as a means to research and book travel will continue to trend-up as technology and users become more sophisticated. Competition will increase and companies that are able in invest in travel research and booking feature improvements, targeted promotions and robust CRM programs will reap the greatest benefits.

Mintel defines the market for Internet travel booking to include airline, hotel, and car rental bookings made via the Internet for unmanaged business, personal and/or vacation purposes. The report focuses on leisure travel, not corporate travel, although some business travel that is not is undoubtedly incorporated into the Internet data.

A distributor may be either a direct travel company, an online travel agency or online consolidator.

• Introduction and Abbreviations
• Introduction
• Other relevant reports
• Definition
• Abbreviations & terms
• Abbreviations
• Terms
• Executive Summary
• Travel market rebounding
• Internet connections on the rise, allowing for greater access
• Business travel trending up
• Air travel remains largest segment, but is losing ground
• Competition is tough, leading to a fight for inventory
• Adspend up
• Booking tools show promise
• Key demographics
• Growth of online booking to continue
• Market Drivers
• Travel market rebounding
• Travel expenditures
  • Figure 1: Travel expenditures in the U.S., at current and constant prices, 2000-05
• Person trips
  • Figure 2: Number of domestic, inbound and outbound person trips, 1999-2005
• Business travel trending up
  • Figure 3: Total person trips for business and leisure travel, 1998-2006 Figure 4: Graph: Total person trips for business and leisure travel, 1998-2006
  • Figure 5: Likelihood that virtually all bookings will be completed online in five years, according to business travelers, 2004
  • Figure 6: Frequent business travelers use of selected travel tools, past 12 months, 2002 and 2004
• Internet use and penetration
• Increase in broadband penetration
  • Figure 7: U.S. broadband household projections, 2000-10
• Increase in household computer penetration
  • Figure 8: Household ownership of personal computers, 2001-04
• Travel among PC households
  • Figure 9: Travel planning in households with personal computers, 2002-05
  • Figure 10: Internet activities*, May-November 2004
• The online traveler
• Generational influences
  • Figure 11: American generations, 2000-10 Figure 12: Graph: American generations, 2005-10
• Baby Boomers
• Gen X and Echo Boom
• Women
• Internet promotes last-minute travel
  • Figure 13: Last-minute travel, May 2004
  • Figure 14: Reasons for last-minute travel, May 2004
• Internet-based competition heats up
• Hotels set accreditation standards for online travel agencies
• Metasearchers improve Internet functionality
• Expanding options encourage Internet use
• Bookers vs. lookers
  • Figure 15: Travel sites used by travel planners and bookers, July 2004
• Market Size and Trends
  • Figure 16: Total U.S. retail sales of Internet travel, at current and constant prices, 2000-05
  • Figure 17: Graph: Total U.S. retail sales of Internet travel, at current and constant prices, 2000-05
• Market Segmentation
• Introduction
• Travel components
  • Figure 18: Annual revenue for the online travel insustry, by travel component, 2003 and 2005
  • Figure 19: Graph: Annual revenue for the online travel industry, by travel component, 2005
  • Figure 20: Annual revenue for the online travel insustry, by type of travel and retail channel, 2003 and 2005
• Travel products and services booked online
  • Figure 21: Travel products/services purchased online, 2002-04
• Air travel
• Hotel/motel reservations
• Greater control of third-party distributors
• Occupancy tax issues
• Car rentals
• Other travel products
• Supply Structure
• Introduction
  • Figure 22: Online travel agency market share, 2004 Figure 23: Graph: Online travel agency market share, 2004
  • Figure 24: Unique visitors to U.S. travel sites, 2002 and 2005
  • Figure 25: Internet sites used for travel booking, 2002-04
• Internet-based Independent Travel Sites
• IAC/InterActive Corp.
• Expedia
• Hotwire.com
• Hotels.com
• Sabre
• Travelocity
• Cendant
• Orbitz
• Priceline
• Metasearchers
• Other online travel suppliers
• Brick & Mortar/Internet Travel Agency Sites
• American Express
• Carlson Wagonlit Travel
• Airlines
• American Airlines
• Delta Air Lines
• United Airlines
• Northwest Airlines
• Continental Airlines
• US Airways
• Southwest Airlines
• Hotels/Motels
• Marriott International
• Accor Lodging
• Hilton Hotels
• Cendant Corporation
• InterContinental Hotels
• Choice Hotels International
• Best Western International
• Advertising and Promotion
• Introduction
• Website/email advertising trends up
• Airlines
• Hotels
• Cruise lines
• Search engine marketing
• Website enhancements
• Best price guarantees
  • Figure 26: Travel provider best price guarantees, July 2005
• Personalized customer satisfaction
• Internet companies branching out
• Trip enhancements
• Pop culture and celebrity endorsements
• Emotional resonance
• The Consumer
• Introduction
• Number of round trips taken in the past 12 months
• Key findings
  • Figure 27: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by demographics, July 2005
  • Figure 28: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by gender, July 2005
  • Figure 29: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by age, July 2005
  • Figure 30: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by race/Hispanic origin, July 2005
  • Figure 31: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by household income, July 2005
  • Figure 32: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by marital status, July 2005
  • Figure 33: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by presence of children, July 2005
  • Figure 34: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by number of people in household, July 2005
  • Figure 35: Incidence and number of personal/leisure and business round trips taken in the past 12 months, by region, July 2005
• Travel booked online
  • Figure 37: Mean number of trips booked online in the past 12 months, by type of travel, by demographic characteristics, July 2005
• Online travel shopping habits and preferences
  • Figure 38: Online travel shopping techniques, by age, July 2005
  • Figure 39: Online travel shopping techniques, by household income, July 2005
  • Figure 40: Online travel shopping techniques, by race/Hispanic origin, July 2005
  • Figure 41: Online travel shopping techniques, by number of people in household, July 2005
• Use of email alerts and opinions about online pricing
  • Figure 42: Opinions on online pricing and email alerts, by age, July 2005
  • Figure 43: Opinions on online pricing and email alerts, by household income, July 2005
  • Figure 44: Opinions on online pricing and email alerts, by race/Hispanic origin, July 2005
• Online travel planning and trip management features
• Pre-booking features
  • Figure 45: Use of online travel planning pre-booking features, by age, July 2005
  • Figure 46: Use of online travel planning pre-booking features, by household income, July 2005
  • Figure 47: Use of online travel planning pre-booking features, by race/Hispanic origin, July 2005
  • Figure 48: Use of online travel planning pre-booking features, by number of people in household, July 2005
  • Figure 49: Use of online travel planning pre-booking features, by region, July 2005
• Post-booking features
  • Figure 50: Use of online travel planning post-booking features, by gender, July 2005
  • Figure 51: Use of online travel planning post-booking features, by age, July 2005
  • Figure 52: Use of online travel planning post-booking features, by race/Hispanic origin, July 2005
• Destination planning features
  • Figure 53: Use of online travel and destination planning features, by age, July 2005
  • Figure 54: Use of online travel and destination planning features, by household income, July 2005
  • Figure 55: Use of online travel and destination planning features, by race/Hispanic origin, July 2005
  • Figure 56: Use of online travel and destination planning features, by number of people in household, July 2005
  • Figure 57: Use of online travel and destination planning features, by region, July 2005
• Summary
• Future and Forecast
• Future trends
• U.S. Travel trends
• Leisure travel
  • Figure 58: Travel expenditures in the U.S., at current prices, 2001-06
• Business travel
  • Figure 59: Frequent business travelers use of online tools, past 12 months, 2002 and 2004
• Internet travel
• Internet access to increase...
  • Figure 60: U.S. broadband household projections, 2000-10
• ...leading to a more tech-savvy consumer
• Flights remain segment leader, but other products gain in popularity
• Competition is tough, and only the strong will survive
• A friendly face of technology
• Market Forecast
• Internet travel bookings
  • Figure 61: Forecast of total U.S. sales of Internet travel bookings, at current and constant prices, 2005-10 Figure 62: Graph: Forecast of total U.S. sales of Internet travel bookings, at current and constant prices, 2005-10
• Forecast factors
• Appendix: Trade Associations
• Appendix: Research Methodology
• Consumer Research
• Greenfield Online
• Presentation & Definition
• ICR Surveys EXCEL
• Simmons National Consumer Surveys
• Technometrica TechnoExpresssm
• Further Analysis
• Trade Research
• Informal trade research
• Formal trade research
• Desk & Internet Research
• Sources
• Definitions
• Forecasts
• Appendix: What is Mintel?
• Mintel Group
• Mintel Reports
• Mintel Premier
• Mintel ECLIPS
• GNPD
• Menu Insights
• Comperemedia
• Brokertrack
• Mintel Services
• Applied Research
• Mintel Consulting
• POS+