Category — Market Analysis

This graph show % of travel related traffic on the internet:

A clear seasonality can be seen in the chart.

According to Hitwise: 38.93% of all visits to the online ‘Travel’ industry went to the top 10 websites for the month of May, 2009. 48.14% went to the top 20 websites and 69.67% went to the top 100 websites.

One site entering the top 100 of in interets is hotel-guides.us - this site seems to rely primarily on SEO and anyone with a travel site can learn alot from the model.

1) Leading market research firms peg the core U.S. travel market (i.e., airline, lodging/hospitality, car rental, cruise, tour, travel agency sales), at $270 - $300 billion (2008) and of this total approximately 35% is online sales.

2) A Report by Jupiter Research entitled “US Travel Forecast, 2006 to 2011” suggest the online travel industry will grow by $43 billion over the next five years, reaching $128 billion in 2011.

3) PhoCusWright suggests that the online segment of the travel industry will grow at triple the growth rate of the core market.

4) Much of this growth will occur in Asia according to EyeForTravel’s The Asia Pacific Online Travel Report 2007, total online saleswill reach $55 billion by 2010 from a current base of about $25 billion in 2007.

5) The U.S. Online Trvel Agency market is highly concentrated, as four companies hold more than 97% market share. They are - Expedia, Inc (expedia.com, hotwire.com), Sabre Holdings (Travelocity.com, Lastminute.com), Orbitz Worldwide (orbitz.com, cheaptickets.com) and Priceline.

6) In Europe the market is slightly more fragmented and the top 5 online companies - expedia, Lastminute.com, ebookers, booking.com and Opodo.com - control just over 75% of OTA market share

7) Of the $80+ billion spent in online booking in affiliate marketers captured between .5 and 1.5% of the market share based on estimates from my previous post examining the size of the travel affiliate market.

A recent report by JupiterResearch indicates that US online marketers will spend $2.1 billion on affiliate marketing fees in 2008. This represents all different types of affiliate marketing and not just travel marketing, but assuming that travel makes up 10 to 15% of online transactions one might venture that the travel affiliate market generates at least 200 to 300 million dollars and commissions and at least 2 billion dollars in revenue. Another report by Value Click estimates the affiliate market size to be closer to 500 million based on data from CJ, Linkshare and other aggregators of affiliates. The estimates between these two studies very widely and suggest that the travel affiliate market size may range from 50 to 300 million dollars, but however it is examined it is a large market with a diffuse group of players.