adi 2016 travel report

© 2015 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.

2016 Travel Report

© 2015 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. 2 © 2016 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential

Methodology & Findings

Based on analysis of aggregated and anonymous data

•  15+ billion visits to major U.S. travel, airline and hotel sites between ‘14 and ‘16 •  7 of 10 largest airlines use the Adobe Marketing Cloud (by revenue and passengers carried) •  9 of 10 largest hotel groups use the Adobe Marketing Cloud (by room numbers, MKG Hospitality Database) •  Survey: conducted March 11-14th with 1,000 US consumers. •  Data from different Adobe Marketing Cloud solutions: Adobe Analytics & Adobe Mobile Services

Most comprehensive and accurate report of its kind in industry

•  Online US travel spend to grow 5.5% this year, totaling $83 B (even while consumers anticipate spending less this summer) •  While consumers perceive that overall travel costs have increased since last year, they’ve declined for flights •  Consumer concern over gas prices is leading US travelers to focus on domestic travel this year •  US consumers are focusing on car travel this summer, but flying might be the cheaper choice •  90 days before departure is the best time to book domestic flights, but only the real procrastinators pay a big penalty •  Wondering if you are getting a good price to fly? We have a formula to help you decide!

Top Insights:


US summer travel spend online to grow 5.5% this year, totaling $83 B

Summer holiday expected spend: •  Memorial Day weekend: $3.05 billion •  July 4 weekend: $3.22 billion •  Labor Day weekend: $2.92 billion

Despite 5.5% growth in online travel bookings in flights and hotels, consumers in our survey said they would spend 20% less on overall travel costs this year


Smartphones taking over as dominant interface


As consumers spend less, domestic vacations more popular

Planning on spending less, 82% of consumers report that a domestic trip will be their primary summer vacation (vs. 74% in 2015); 60% plan a trip to another US region Like last year “Sand & Sea” is the most appealing vacation type; “Mountains & Nature” is #2 this year (tied #2 with “Big city/Museums” last year)


Domestic flight prices down despite consumer perceptions

Domestic flight prices down 6.6% YoY (Mar); 1.8% down for int’l

•  In the same period, jet fuel costs decreased 44% (USEIA)

•  Bigger domestic decrease shows effect of low-cost airlines in driving down prices

Domestic hotel prices up 2.9% YoY (Mar); 1.2% up for int’l 81% of consumers think prices have increased or stayed the same Recent upswing in gas prices weighing on traveler’s minds (70% say gas price is Very/Somewhat important in their travel decisions)


Domestic and car travel up, but driving not always cheaper than flying

As consumers travel more domestically, they are more likely to travel by car this year: 53% say they will travel via personal car. But is the car the cheapest option? We crunched the numbers to tell consumers when it makes more sense to fly than to drive: flight cost estimates compared to AAA driving cost estimates ($.57/mile)


Tip to consumers: savings vary when booking in advance

Millennials worry about when to book vacations: 30% worry that costs will rise if they wait too long to book their trips According to our data, 90 days is a good rule-of-thumb for a 16% discount, but only the real procrastinators pay a price: 20 days before sees prices climb 3% each day. The 90-day rule doesn’t apply to key summer dates: Memorial Day (80 days before), July 4 (40), and Labor Day (40) For hotels, 30-40 days before check-in is the best bet, but “when you book” has very little effect on prices.


Best domestic destinations for procrastinators

Given consumer focus on domestic travel this year, we can show procrastinators their best options: California (SF has a 60% premium on last week travel, LA a 58%) and Pacific Northwest destinations also carry a big premium for last-minute booking (i.e., a week before) Honolulu and Charlotte, North Carolina have the lowest premiums for last-minute travel (13% for Honolulu, 23% for North Carolina)

19% of consumers wait to book their travel a week or less before departure – and millennials even more likely to procrastinate (22%)


A formula for knowing if you got a good price

An underlying formula for flight prices in terms of the expected price to fly a certain distance:

•  Domestic roundtrip prices:

Roundtrip miles X $.032 + $230 •  International roundtrip

prices: Roundtrip miles X $.08 + $200

Formulas are a guideline for route comparisons (above or below the average price)


Advice to domestic travelers: higher hotel costs, lower flight costs

The higher the hotel costs, the lower the flight cost per mile; and vice versa San Francisco: most expensive average hotel room price/night ($249), but one of the lowest average cost per mile ($.11) Honolulu: 3rd highest average hotel room price/night ($232), but the lowest average cost per mile ($.09)


Rio Olympics

13

Although Brazil has been struggling to sell Olympic tickets, prices are very attractive for Americans:

•  Flight prices to Rio were 28% cheaper YoY in January, 35% in February and 23% in March

•  Hotel prices in Rio were down 21% YoY in January, 12% in February and 13% in March

•  Price fluctuations seem to follow currency volatility (R$

has been greatly undervalued)


Cheapest/Most Expensive Top Destinations, Int’l

14

Lowest flight costs per mile are for Bangkok ($.08), New Delhi ($.10), Taipei ($.10) and Beijing ($.10) destinations -- Asia Lowest hotel costs are in Sao Paulo ($ 96), Istanbul ($ 131), Bangkok ($ 104), Taipei ($ 117) & Seoul ($121) European destinations almost double the cost of Asian destination in general, which is explained by exchange rates In Europe, London, Amsterdam & Paris have highest hotel costs – Munich has the highest flight per mile cost, followed by Amsterdam If you will start a trip in Europe, book flights for Madrid or Rome airports, as they present cheapest cost per mile for flights


U.S. Events (non-business)

15

•  The Kentucky Derby 2015 saw the highest average increase in hotel prices for an event, at 136%

•  Super Bowl 2015 in Phoenix came in second place, with an

increase of 98% •  As comparison, Supe rBowl 2016 in San Francisco saw an

increase of 61%, hinting at the effect of Airbnb in capping hotels abilities to increase their prices during major events


Consumers should also be aware of availability

16

Our analytics shows that consumers plan most in advance for Christmas and Thanksgiving, when only 7-10% of flight bookings happen on the week before departure. Not surprisingly, 56% of US consumers said that Christmas tops the list of major US holidays in terms of requiring the most advanced planning, followed by Thanksgiving (44%) and July 4th

(35%).


XX