emarketer webinar: 7 travel trends for 2015—how digital will drive new opportunities for revenue...

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Travel Trends for 2015—How Digital

Will Drive New Opportunities for

Revenue and Distribution

Jeremy Kressmann

Analyst

December 2014


Agenda

Seven trends for 2015

1. Mobile, mobile and more mobile

2. Travel gets more local

3. Everybody wants to sell extras

4. Strong headwinds for online travel agencies

5. Marketers experiment with new ad formats

6. Travel industry looks east

7. Rise of the do-it-yourself traveler

Key takeaways


1. Mobile, Mobile and

More Mobile


Travel is

undergoing a

key shift:

Desktop sales

will begin to

shrink in

2014, while

mobile sales

continue to

grow


These days,

travelers aren’t

just looking on

mobile, they’re

also booking


Use cases for smartphones and tablets are

diverging, particularly for travel

“ At least in the travel industry what we’ve

seen is that the use cases for

smartphones and tablets can be

quite different … But to me the

tablet experience, the tablet use

case, is just a different animal

than the phone.”

—Blake Clark, director of mobile at Travelocity


Hotels lead the way for mobile commerce

“ When you think about the product

categories that are a great fit for

mobile, hotels are the leading

category. They really benefit

from proximity and mapping

capabilities; there are a lot of

choices you make in-market and

there are lots of potential

deals.”

—Chris Brown, group vice president for

mobile at Orbitz


New business models cater to last-minute

travelers


Travel industry

mobile ad

spend is likely

to grow

alongside

rising attention

and purchases


2. Travel Gets More Local


As travelers get more mobile, so does the

importance of “on the go” local business search


Mobile ad spend on local is growing in parallel

with the rise in local searches


Industry deals point to a land grab for control of

local travel planning and purchases


“ Travelers want to explore local

attractions while on their trip, and

Viator’s depth and breadth in global

attractions combined with their

seamless booking experience will

provide immediate benefit to our

community, whether in the planning

phase or on the trip.”

—Stephen Kaufer, CEO of TripAdvisor

Local attractions content helps travel marketers

increase ad revenue and ecommerce spend


3. Everybody Wants

to Sell Extras


Travelers are

increasingly

willing to pay

for extra

services that

were once free

with a ticket

purchase


Airlines are returning to profitability thanks to

the growth in sales of these “ancillary” services


Mobile is

still largely

unexplored as

a channel for

purchasing

ancillary

services


However, travel brands need to use a soft touch

in deciding how and where extras are sold


4. Strong Headwinds for

Online Travel Agencies


In the OTA

space, it’s

Priceline,

Expedia …

and everybody

else


But competition for clicks is fierce

Some travel ad

spend is even

shifting back to

TV as a result of

online ad

competition


New

challengers

like TripAdvisor

are competing

for a share of

digital travel

sales


Google, which profits handsomely from travel ad

spend, may also start competing more directly


5. Travel Marketers

Experiment with New

Ad Formats


Travel ad

spend often

emphasizes

paid search,

but new

formats are

shaking

things up


Digital video, which is under-represented in the

travel category, is poised for growth

“ I would say video

is our largest growth

percentage in terms

of formats.”

—Susan Schiekofer,

president of digital at MEC

North America


Even digital

display is

seeing new life,

thanks to the

efficiencies

made possible

by

programmatic

buying


6. Travel Industry

Looks East


China is

already the

world’s

second-largest

market for

digital travel

sales …


… and

Chinese

consumers’

appetite for

travel

spending is

still growing


Most of the

growth in

China’s online

travel market

is happening

on mobile


International tourism by Chinese travelers is

also on the rise

Outbound Chinese tourists spent an average of $3,252

per person during trips

57% of their spending was for shopping (!)

Seoul, London, Paris, Berlin and Zurich are their top

destinations as ranked by total spend

Source: China Internet Watch, Sep 2014


Major deals, like Priceline Group’s $500 million

investment in Ctrip, reinforce China’s potential

“ Our primary way of growing as a

company has and will be organic

growth, and the commercial side of

this deal is critical to helping us keep

up the fast pace of organic growth.”

—Darren Huston, CEO of Priceline Group


7. Rise of the “DIY”

Traveler


Many travel

brands are

turning to

digital and

mobile

channels to

automate

offline

services


Hotels are

pioneering a

range of

mobile-enabled

guest services


As the user base of social platforms like Twitter

grow, they become a service channel for brands


Many airlines now even list their estimated wait

times in their Twitter profile


Travel companies like Airbnb and Uber, with

digital-only products, are helping drive the trend


Key takeaways

Mobile usage is growing rapidly, transforming everything

from digital travel sales to ad spending and how travel

marketers serve customers.

Ancillaries, China and local have huge potential: Travel

brands are rushing to build partnerships and services

that help drive new sources of growth.

Priceline and Expedia still dominate, but existing

competitors and new players could cause a shake-up.

Digital video is ready for a breakout: Consumer

engagement and creative opportunities suggest

potential.

| Copyright 2014 Quantcast

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Jeremy Kressmann

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Will Drive New Opportunities for

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