Search, Shop, Buy: the New Digital Funnel Written & Researched by Cathy Schetzina Walsh, Douglas Quinby and Marcello Gasdia June 2015

REPORT

Search, Shop, Buy: The New Digital Funnel Written & Researched by Cathy Schetzina Walsh, Douglas Quinby and Marcello Gasdia June 2015

Over the past decade, the travel search, shop, buy process has grown increasingly complex. The rapid adoption of mobile devices and rise of social networking are changing the way that travelers worldwide consume and share travel information. As travelers explore the online and mobile tools available to them, the digital funnel is evolving in every market. This report provides a detailed look at how travelers in eight key markets – Australia, Brazil, China, France, Germany, Russia, the U.K. and the U.S. – are navigating the trip life cycle. It provides a basis for understanding travelplanning behavior in relation to devices and attitudes toward key shopping and purchase channels.

This content is published by Phocuswright Inc., a wholly owned subsidiary of Northstar Travel Media, LLC.The information herein is derived from a variety of sources. While every effort has been made to verify the information, the publisher assumes neither responsibility for inconsistencies or inaccuracies in the data nor liability for any damages of any type arising from errors or omissions. All Phocuswright publications are protected by copyright. It is illegal under U.S. federal law (17USC101 et seq.) to copy, fax or electronically distribute copyrighted material beyond the parameters of the License or outside of your organization without explicit permission.

Search, Shop, Buy: The New Digital Funnel June 2015

About

Phocuswright is the travel industry research authority on how travelers, suppliers and intermediaries connect. Independent, rigorous and unbiased, Phocuswright fosters smart strategic planning, tactical decisionmaking and organizational effectiveness.

Phocuswright delivers qualitative and quantitative research on the evolving dynamics that influence travel, tourism and hospitality distribution. Our marketplace intelligence is the industry standard for segmentation, sizing, forecasting, trends, analysis and consumer travel planning behavior. Every day around the world, senior executives,marketers, strategists and research professionals from all segments of the industry value chain use Phocuswright research for competitive advantage.

To complement its primary research in North and Latin America, Europe and Asia, Phocuswright produces several highprofile conferences in the United States and Europe, and partners with conferences in China and Singapore. Industry leaders and company analysts bring this intelligence to life by debating issues, sharing ideas and defining the everevolving reality of travel commerce.

The company is headquartered in the United States with Asia Pacific operations based in India and local analysts on five continents.

Phocuswright is a wholly owned subsidiary of Northstar Travel Media, LLC.

Table of Contents

Overview 7 Research Highlights 7 Methodology 9 Online Travel Populations by Market 9 Travel Planning 15 The Online Travel Planning Cycle 17 Destination Selection 19 Shop 22 Buy 27 Website Perception 34 Sponsors 40 Endnotes 43

Figures and Charts

Fig. 1: The Adult Population ( 18+) by Market (Millions) 10 Fig. 2: Internet Penetration (Percentage of Adutls with Internet Access 11 Fig. 2a: The Online Adult Population (Millions) 12 Fig. 3: Percentage of Adults Who Travel 13 Fig. 3a: Leisure Traveler Population Projections (Millions) 14 Fig. 4: Percent of Travelers Aged 1834 (Millennials) 15 Fig. 5: Duration of Last Trip 16 Fig. 6: Percentage of Last Trips to International Destinations 17 Fig. 7: Online Penetration for SearchShopBuyShare 18 Fig. 8: Mobile Penetration for SearchShopBuy Share 19 Fig. 9: Devices Used When Choosing Destination Online 20 Fig. 10: The Most Widely Used Types of Websites Used for Destination Selection 21 Fig. 10a: The Most Widely Used Types of Websites for Destination Selection 22 Fig. 11: Devices Used to Shop 23 Fig. 12: Flight and Hotel Shopping Via Smartphone, by Channel (Smartphone Owners) 24 Fig. 13: Mobile ShoppingApps vs. Web 25 Fig. 14: The Most Widely Used Types of Websites Used When Shopping for Flights 26 Fig. 15: The Most Widely Used Types of Websites Used When Shopping for Hotels 27 Fig. 16: Percentage of Travelers Who Booked Flights and Hotels Online for thier Last Leisure Trip 28 Fig. 17: Booking Channel Used for Flights for Last Leisure Trip 29 Fig. 17a: Offline Booking Channels Used for Flights for Last Leisure Trip 30 Fig. 18: Booking Channel Used for Hotels for Last Leisure Trip 31 Fig. 18a: Offline Booking Channels Used for Hotels for Last Leisure Trip 32 Fig. 19: Devices Used for Booking Flights Online 33 Fig. 20: Devices Used for Booking Hotels Online 34 Fig. 21: Traveler Perceptions of Which Websites Have the Best Prices 35 Fig. 22: Traveler Agreement on Whether Most OTAs Have Similar Prices 36 Fig. 23: Traveler Perceptions of Which Websites Have the Best Flight and Hotel Options 37 Fig. 24: Traveler Perceptions of Which Websites Are Easiest to Use and Most Enjoyable 38 Fig. 25: Traveler Perceptions of Which Websites Are Most Trustworthy 39 Fig. 26: Traveler Agreement on Whether It Is Safer to Book with a Supplier Website Than with an OTA 40

Search, Shop, Buy: The New Digital Funnel An InDepth Analysis of the Online Traveler Path to Purchase Across Australia, Brazil, China, France, Germany, Russia, the U.K. and the U.S.

Phocuswright thanks its sponsors for Search, Shop Buy: The New Digital Funnel. Without their active support, this research would not have been possible.

■ Accor ■ Amadeus IT Group S.A. ■ Criteo ■ HotelsCombined.com ■ Merkle Inc. ■ Orbitz Worldwide ■ Starwood Hotels & Resorts ■ Travel Alberta

Overview

Over the past decade, the travel search, shop, buy process has grown increasingly complex. The rapid adoption of mobile devices and rise of social networking are changing the way that travelers worldwide consume and share travel information. Multiple devices and channels are giving travelers unprecedented choices, often making it a circuitous path from dreaming to departing.

At the same time, technology innovation and business model evolution have proven to be competitive wild cards. Travel planning via smartphone, for example, may change not only the device, but also the likely booking window and favored purchase channel. For travel intermediaries, shifting business models are blurring the lines between formerly distinct travel website categories. Is company X a metasearch or traveler review website, an OTA, or all of the above? Increasingly, travel companies seek to own the funnel, expanding their focus to encompass every phase of the trip planning life cycle.

For consumers, however, these distinctions rarely matter. What does matter is which websites and apps are best suited to help them to plan the perfect vacation. And as travelers explore the online and mobile tools available to them, the digital funnel is evolving in every market. But while megatrends such as mobile, social and metasearch apply around the globe, specific traveler behaviors and the factors driving them can vary substantially by market.

Phocuswright's Search, Shop, Buy: The New Digital Funnel provides a detailed look at how travelers in eight key markets are navigating the trip life cycle. Based on a survey of online leisure travelers in Australia, Brazil, China, France, Germany, Russia, the U.K. and the U.S., the report describes core travel behaviors and preferences in each market to analyze how marketspecific trends influence destination selection, shopping and booking. The report provides a basis for understanding travelplanning behavior in relation to devices (PCs, smartphones and tablets) and attitudes toward key shopping and purchase channels (suppliers, online travel agencies and metasearch websites).

Research Highlights

Market differences in trip length and destinations impact travel planning.

■ In China, quick getaways are the norm, whereas Russians and Germans travel less frequently, but tend to take longer vacations. ■ International travel incidence varies widely across markets, with the share of leisure travelers who visited an international destination for their last leisure trip ranging from 77% in Germany to 27% in the U.S. ■ Differences in the types of trips popular in each market can influence travelplanning behavior, as travelers may opt for different methods when planning different types of trips. For example, German travelers, who often take relatively long, international vacations within Europe, were also less likely to purchase a flight or hotel online for their last trip compared to other markets, and were more likely to use a travel agent.

Techsavvy millennials rule in emerging markets (especially China)

■ Travelers aged 1834 comprise more than half of the online leisure traveler population in China (65%), Brazil (57%) and Russia (51%), compared to roughly 3540% in the other markets studied. ■ The number of young, techsavvy leisure travelers in these emerging markets is driving higher incidence of mobile shopping and sharing. In Brazil, for example, 37% of leisure travelers shopped and 52% shared travel experience via mobile in the past 12 months. © 2015 Phocuswright Inc. All Rights Reserved. 7 Search, Shop, Buy: The New Digital Funnel June 2015

Travelers more likely to book air online compared to hotel

■ When booking their last leisure trip, travelers were more likely to book air online compared to hotel. This pattern is due in part to the relative complexity of hotel products, and is particularly pronounced in markets such as Brazil and Russia, where travelers may be less experienced with online booking.

Mobile shopping and sharing is high. But booking? Not so much.

■ In five of eight markets, more than a quarter of travelers shopped for and shared travel, respectively, via mobile in the past 12 months. ■ Mobile booking incidence, however, was in the single digits across markets, with the exception of China (26%) and Australia (11%). ■ Among travelers who booked a flight and/or hotel for their last trip, roughly one in 10 did so using a tablet or smartphone.

When it comes to channel preference, device matters.

■ Airlines have made strides in driving direct online bookings overall, but mobile shoppers are still much more likely to use an OTA. When shopping for air or hotel via smartphone for their last leisure trip, travelers overwhelmingly turned to intermediaries. OTAs have the strongest mobile lead among hotel shoppers, who often want to compare options across brands.

Chinese travelers lead all markets in mobile adoption.

■ Chinese leisure travelers are significantly more likely than travelers in other markets to choose a destination (67%), shop (64%) and book (26%) via mobile. ■ Among Chinese travelers who purchased a flight/hotel for their last leisure trip, roughly one quarter did so via smartphone.

General search dominates top of funnel, but transactional sites play a role too.

■ General search is most popular for destination selection with lasttrip usage ranging from 48% in the U.K. to 79% in Russia. ■ Traveler review websites place second, but travelers also turn to transactional sites to compare pricing and availability. ■ In five of eight markets, more than one third of travelers visited an OTA to choose the destination for their last trip.

Metasearch is wildly popular for flight shopping . . . but many travelers still don't "get" it.

■ Metasearch usage is high across markets and is the most popular flightshopping channel in the U.K., France, Germany and Russia. ■ However, metasearch fails to capture top ratings for the best flight and hotel options, © 2015 Phocuswright Inc. All Rights Reserved. 8 Search, Shop, Buy: The New Digital Funnel June 2015

undercutting its core value proposition.

Suppliers own trust, but OTAs rank highest for price and product choice.

■ Travelers in every market give suppliers top ratings for trust, and more than half of travelers in Brazil and China agree it is safer to book on a supplier website versus an OTA. ■ In five of eight markets, travelers rated OTAs highest for having the best price. ■ Travelers in Brazil, Germany, Australia and the U.S. give OTAs the edge for flight and hotel options, while only Russia and the U.K. favor suppliers.

Methodology

Phocuswright fielded an online consumer survey in eight countries between December 1217, 2014, through Global Market Insite, Inc., targeting the general adult populations who have Internet access and travel for leisure.

To qualify for participation in the study, respondents had to indicate they had taken at least one leisure trip at least 75 miles from home in the past 12 months that included paid lodging and/or air and/or rail travel (rail not required in all markets). An additional screener required consumers to have played an active role in planning their leisure trips, and go online to either research travel destinations, and/or shop or book travel and/or share their travel experiences. Qualifying respondents are referred to as "leisure travelers."

Responses are weighted to represent the adult online population that travels for leisure. The term "lodging" is used in this report to refer to the broad range of paid accommodations, including hotels, other nightly priced lodging products, timeshares and vacation rentals.

Online Travel Populations by Market

The importance of understanding your audience is Travel Marketing 101. But actually honing in on what makes travelers in a given market unique is considerably more complex. Online leisure travelers are a coveted group: they have experience doing travel activities online and a proven track record of traveling for leisure. To better understand this key demographic, it is useful to take a closer look at how underlying population, technology and travel dynamics vary across markets.

To project online travel populations, Phocuswright begins with the total adult population and further segments to focus on adults with Internet access, who travel for leisure and who research, plan or share travel experiences online. Across the eight markets studied, notable variations appear at each stage of this process. Looking first at the adult population (18+), China dwarfs all other markets at 586 million1 (see Figure 1). By comparison, the U.S., the second largest market by population, is less than half the size of China. At the other end of the spectrum is Australia, with just 18 million adults.

Figure 1

While Internet penetration is similar across the developed markets studied, Russia, Brazil and China continue to lag. Among the more mature online markets, the share of adults with Internet access is in the 8090% range (see Figure 2).

Figure 2

As a result, while China's adult population is substantially larger than the U.S., the country's online adult population is only slightly larger at 271 million versus 222 million U.S. online adults (see Figure 2a). Similarly, the population differences between the larger Brazil/Russia and the European markets studied are less dramatic when including only adults with Internet access.

Figure 2a

To qualify as a leisure traveler, an online adult must have taken at least one leisure trip (excluding business trip extensions) in the past 12 months that included paid lodging and/or air travel and/or rail (in select markets) (see Figure 3). In most markets, leisure travel incidence among adults falls between 7080%. However, U.S. online adults are less likely than those in other markets to travel for leisure, with nearly four in 10 foregoing a vacation. By comparison, leisure travel is more common in European markets, and 86% of Chinese online adults took a leisure trip in the past 12 months.

Figure 3

Figure 3a

In addition to having Internet access and traveling for leisure, to qualify for the study respondents also needed to research, shop, book or share travel online in the past 12 months. At 231 million, China's leisure traveler population is equal to that of the U.S., Russia and Brazil combined. Despite China's relatively low Internet penetration, its large population and high leisure travel incidence put it far ahead of the secondlargest market (the U.S.). Leisure travelers in Germany, the U.K. and France number in the 3040 million range, while Australia's leisure travel population is the lowest at 9 million.

Online leisure travelers across markets tend to be younger than the general population. Online audiences in general skew younger, but younger consumers are also more likely to travel compared to their older counterparts. This trend is particularly evident in emerging markets (see Figure 4). Nearly twothirds of Chinese leisure travelers, and more than half of those in Brazil (57%) and Russia (51%) are under 35 (i.e., Millennials). By comparison, in the more mature markets, Millennials represent roughly 3540% of leisure travelers.

Figure 4

In China and Russia, this pattern is due in part to a history of travel restrictions, resulting in older adults who are not accustomed to traveling. And in both China and Brazil, a high concentration of young, techsavvy leisure travelers drives high adoption of mobile devices, as well as more sophisticated travel shopping behaviors such as usage of travel metasearch websites.

Travel Planning

Destination selection, shopping and booking are the crucial waypoints on the path to making a travel purchase. But many of the traveler behaviors demonstrated in these phases are tied to broader, marketspecific leisure travel trends. Before delving into the specifics, it is useful to have a baseline understanding of the types of trips travelers are most likely to be shopping for in each market. This section highlights key differences in trip length and vacation destinations across markets.

The Last Trip

Leisure trips come in many varieties, from quick weekend getaways, to the long haul tripofalifetime and the way travelers plan a vacation can vary depending on the type of trip they are taking. To get a detailed picture of the online travel planning process based on a specific traveler experience, Phocuswright asked survey respondents to provide information about their last leisure trip. General leisure travel metrics reflect distinct travel behaviors and preferences across each of the eight markets studied.

In fact, there are significant cultural differences in trip types across markets. In China, travelers tend to take many quick getaways throughout the year. More than half of Chinese travelers (54%) indicated that their last trip was 13 nights (see Figure 5). In contrast, Russian and German travelers travel less frequently, but tend to take longer vacations. For roughly six in 10 Russian and German travelers the last trip lasted seven or more nights.

Figure 5

Some markets have a higher incidence of international travel than others, but depending on the market, international doesn't always mean long haul. Led by Germany at 77%, international travel is most common among European travelers, for whom a crossborder trip is an option even for a long weekend (see Figure 6). And when European travelers do take an international trip, they are most likely to travel within Europe. In contrast, for Australian leisure travelers, 48% of whom traveled internationally for their last trip, all international travel is long haul, and therefore often complex. U.S. leisure travelers are least likely to venture beyond their borders for a vacation just 27% did so for their last trip.

Figure 6

The Online Travel Planning Cycle

The Internet plays a dominant role across all stages of the travel planning cycle in both mature and emerging markets. But Internet usage varies depending on the stage of planning. Travelers in all markets are highly likely to go online for destination selection and shopping. But marketlevel differences tend to have a greater impact on the incidence of online booking.

In most markets, online penetration is highest for travel shopping, and in mature markets such as the U.K., Australia and the U.S., Internet usage remains high for travel booking (see Figure 7). In emerging markets, however, some travelers may be less comfortable with completing the transaction online. In Brazil and Russia, for example, while eight in 10 leisure travelers shop online, booking incidence drops to 71% and 61%, respectively.

Figure 7

However, the unique features of these emerging markets cause the online sharing incidence to spike. Because leisure travelers in China, Brazil and Russia tend to be young and tech savvy, social networking is particularly popular in these markets. Seven in 10 Chinese leisure travelers shared a leisure travel experience online in the past 12 months, and sharing incidence in Brazil (65%) and Russia (56%) was well above that in the more mature online markets studied.

The influence of this young demographic in emerging markets also drives relatively higher adoption of mobile devices for travel planning and sharing. Chinese travelers are much more likely than those in other markets to use mobile for travel planning, followed by Brazil. For example, two thirds of Chinese travelers and one third of Brazilian travelers shopped online via a mobile device in the past 12 months, compared to just 28% of U.S. travelers (see Figure 8). Across all markets, travelers are most likely to use mobile for destination selection, shopping and sharing. Mobile booking incidence drops off substantially, particularly in Germany (3%), France (4%) and the U.K. (5%). In the U.S., Australia, Russia and Brazil, roughly one in 10 leisure travelers booked leisure travel via a mobile device in the past 12 months. The outlier, again, is China, where more than a quarter of travelers booked via mobile.

Figure 8

Destination Selection

For some leisure trips, like those to visit friends/family or attend a social event, the destination is set. But for travelers who have the latitude to choose their own destination, the first step in planning their leisure trip is deciding where to go. This section highlights the devices and websites travelers in each market are most likely to turn to when choosing a destination.

To date, desktop/laptop computers still dominate for destination selection, but mobile devices are gaining traction. When choosing a the perfect vacation spot, travelers may consider a range of travel information, often including maps, travel reviews and rich media. This more intensive research is well suited to the larger tablet screen, and tablets have surpassed smartphones for destination research in some markets, including France, Germany, the U.K., Australia and Russia (see Figure 9).

Figure 9

When researching destinations online, travelers are most likely to visit a general search engine, including both global and regional search players (see Figure 10). In Russia, for example, where Yandex is dominant, nearly eight in 10 leisure travelers used a general search engine when choosing their destination. Travelers also rely on input from others early in the planning cycle, and traveler review websites/apps are the next most popular type of website for destination selection. Usage of traveler review websites for destination selection is highest in the U.K., driven by the popularity of TripAdvisor among U.K. travelers. In contrast, traveler review websites have been slower to catch on in Russia, where just 17% of leisure travelers used one to choose their destination.

Figure 10

Personal desire to visit a destination is an important driver in the destination selection process, but choosing the spot for a specific leisure trip involves practicality as well as passion. Price and availability for core travel products such as flights and hotels is are often factors in the destination decision, and transactional websites also play a role here at the top of the funnel. Overall, OTAs have the largest impact on destination selection, but channels vary by market (see Figure 10a). In Germany, for example, 40% of leisure travelers use an OTA for destination selection, compared to just 18% and 22% for supplier websites and metasearch, respectively. In Brazil, however, usage of OTAs (38%) and supplier websites (32%) is more similar, while metasearch lags at 12%. Metasearch is by far the most popular in China, driven heavily by Qunar.

Figure 10a

Shop

Once travelers have homed in on their destination, it is time to delve into the shopping process. From suppliers and OTAs to metasearch websites, travelers have a broad range of online options to help them compare and choose travel products. For online travel shopping, the PC is still the clear leader, but early signs of device shift are appearing in mature online markets such as the U.S., U.K. and Australia. In these markets, the incidence of shopping via smartphone/laptop has dropped to around 65% as travelers shift to mobile devices, especially tablets (see Figure 11). In the U.S. and Australia, for example, 18% of leisure travelers shopped via tablet in the past 12 months.

Figure 11

While online travel analysis often juxtaposes adoption in mature versus emerging markets, significant differences between individual countries make the real story more complex. In fact, mobile shopping incidence is highest in China, Brazil and Russia due once again to these markets' techsavvy leisure traveler demographic. In contrast, some more mature European markets such as Germany, and to a lesser extent, France, tend to be more traditional, with relatively lower mobile shopping adoption. For example, 20% of travelers in Brazil and Russia shopped via tablet, compared to just 12% in Germany.

Figure 12

When travelers do shop via mobile, they often exhibit different channel preferences than they would on a PC. While air suppliers have made strides in driving online direct bookings overall, travelers are significantly more likely to turn to an OTA when shopping for flights or hotels via smartphone (see Figure 12). The intermediary advantage is particularly strong for hotel shopping, when travelers often wish to compare options across brands.

Figure 13

While the popularity of mobile apps is often emphasized in relation to general mobile usage, for travel shopping the mobile web has a slight lead. Many travelers rely on both mobile websites and apps, but travelers in most markets were more likely to indicate that they mostly or only used mobile websites than they were to favor mobile apps (see Figure 13). The exception is China, where nearly half of travelers exclusively or mostly rely on apps for travel shopping.

To better understand traveler usage of OTAs, supplier websites and metasearch websites for travel shopping, Phocuswright provided travelers with a list of popular brands relevant to their market. The goal was not to rank individual brands, but rather to gauge the reach of website categories. The results underline the remarkable global rise of metasearch.

In fact, for online flight shopping (all devices), metasearch websites trump OTAs in several markets, including the U.K., France and Russia, and metasearch is a close second elsewhere (see Figure 14). While airlines have made great progress in driving travelers to their websites through efforts such as ancillary products, airline websites still perform poorly in some markets, including Germany (37%) and Russia (14%).

Figure 14

Airline websites, however, have been much more successful than hotels at driving direct shoppers. Hotel websites shopping incidence is low across markets, with the exception of the U.S. and China, where incidence is 44% and 39%, respectively (see Figure 15). Travelers in all markets are much more likely to shop for hotels via an OTA or metasearch website. And while metasearch use is lower for hotel shopping than for flights, metasearch hotel shoppers still rival OTA shoppers in number. In the U.S., for example, the share of travelers who shop for flights via OTAs and metasearch websites is equal at roughly 75%.

Figure 15

Buy

Each phase of the travelplanning process plays an important role in the purchase funnel. But for travel sellers, it is the booking itself that matters most. For travelers, the transactional phase of travel planning tends to trigger more pronounced behavior differences across emerging and developed markets compared to destination research and shopping. In addition, travelers' booking channels often switch depending on trip type. As in this report's analysis of the destination selection and shopping phases, this section examines travel purchase behavior for the last trip only.

When booking their last leisure trip, travelers were more likely to book air online compared to hotel. This pattern is due in part to the relative complexity of hotel products, and the trend is particularly pronounced in markets such as Brazil and Russia, where travelers may be less experienced with online booking (see Figure 16). In Brazil, for example, among air and hotel bookers respectively, 73% completed their last air transaction online, compared to just 58% who booked their hotel online. Online flight booking also has a large lead over hotel booking in France.

Figure 16

Airline websites are the most popular booking channel for flights, and travelers in nearly every market are more likely to book online with airlines versus OTAs (see Figure 17). The only exception is China, where OTA brands such as Ctrip and eLong are particularly strong. Airline websites have the strongest lead over OTAs in Brazil, Australia, the U.K and the U.S. For example, in Brazil, 42% of airline bookers booked flights for their last leisure trip via an airline website, compared to just 15% who booked on an OTA.

Figure 17

Overall, only a minority of travelers opts to book flights offline, even in emerging markets. When travelers do book air offline, they are most likely to call the airline directly (see Figure 17a). Travel agents are most popular in Germany and Australia both markets that favor longer, international trips but only 14% of air bookers in each market used a traditional travel agent.

Figure 17a

While airlines have succeeded in driving direct bookings in many markets, OTAs continue to have the upper hand for hotel bookings (see Figure 18). This achievement is due in part to the fragmentation of hotel supply in many markets, where small, independent hotels lack directtoconsumer online exposure. Particularly in emerging markets, OTAs have played an important role in aggregating hotel supply. Not surprisingly, the incidence of booking via an OTA for their last trip is highest among hotel bookers in China (39%) and Russia (36%).

Figure 18

In the U.S., France and the U.K., where branded chains and strong hotel loyalty programs play a larger role, booking via a supplier website is more popular compared to the other markets (see Figure 18). In fact, hotel websites lead OTAs in the U.S. and France, where a larger share of hotel bookers purchased a hotel for their last leisure trip via a supplier website or app.

Figure 18a

While mobile's influence on travel planning is growing, smartphones and tablets are still relatively unpopular for booking travel. Roughly one in 10 travelers booked either a hotel or a flight using a mobile device for their last trip, and in some markets that figure was as low as 34% (see Figures 19 and 20). The exception is China, where the young traveler population and high smartphone engagement drove 25% of air online bookers and 28% of online hotel bookers to book their last trip via smartphone.

Preference for smartphones versus tablets varies across markets and travel products. Among U.S. travelers, for example, air bookers are slightly more likely to book via smartphone (6%) versus tablet (4%), but hotel mobile bookings (8%) are more popular overall. In Brazil, smartphones trump tablets, and hotel bookings via smartphone (11%) were the most common type of mobile booking for the last trip.

Figure 19

Figure 20

Website Perception

OTAs, metasearch websites and suppliers are partners, but they are also competitors, with each working to convince travelers to hit the "Buy" button on their website or app. Over the past few years, distinctions among online channels have been blurring as, for example, metasearch sites enable limited transactions (e.g., Kayak), suppliers add new types of travel products or packages, and review sites such as TripAdvisor arguably function as a metasearch engine. For the everyday traveler, the value propositions offered by each type of travel websites may not always be clear.

To understand how travelers view OTAs, suppliers and metasearch websites, Phocuswright gauged consumer sentiment and perception across five key attributes: price, content, ease of use, enjoyment and trust. Survey respondents rated popular websites/apps across each category rating from poor to excellent on a scale of 1 to 10 and, in separate questions, also indicated agreement/disagreement with statements of sentiment.

When asked about price, travelers were most likely to rate in favor of OTAs. Leisure travelers perceived OTAs as having the best prices in five of the eight markets studied (see Figure 21). Ratings for suppliers and metasearch websites were more mixed, with travelers in Russia and Brazil rating suppliers higher, while German travelers rated metasearch higher.

Figure 21

In general, however, travelers did not believe there were significant price differences across OTAs. Leisure travelers in most markets were more likely to agree than to disagree with the statement that most OTAs have similar prices, but a large share of travelers also indicated they were neutral or unsure (see Figure 22). Travelers in the U.S. and China were most likely to perceive price parity across OTAs. In the U.S., for example, two thirds of travelers slightly or strongly agreed that OTAs have similar prices, while just 8% disagreed. Russian travelers were most likely across markets to disagree, with roughly two in 10 indicating slight or strong disagreement.

Figure 22

Travelers also ranked OTAs slightly higher on hotel and flight options. Travelers in Germany, Australia, the U.S. and Brazil gave OTAs the largest rating lead (see Figure 23). German travelers, for example, rated OTAs 6.4 out of 10 for flight and hotel options, compared to suppliers (5.9) and metasearch sites (6.0). The U.K. was the only market to rank supplier websites higher on both price and hotel/flight options. This result may be due in part to the popularity of lowcost carriers such as Ryanair and EasyJet, which have strong onlinedirect distribution and limited presence on OTAs.

Figure 23

Ratings for easeofuse and enjoyment were mixed, with some markets favoring OTAs, and some favoring suppliers. In China for example, where travelers are highly likely to use OTAs to shop and book travel, OTAs rated highly across all four attributes including easeofuse (7.3) and enjoyment (7.2) (see Figure 24). U.K. travelers rated supplier websites as being easiest to use and most enjoyable, while U.S. travelers rated suppliers and OTAs roughly equally in these categories. While metasearch sites' key value proposition is the ability to compare flight and hotel options across numerous websites, travelers in most markets rate metasearch sites behind OTAs, and sometimes even suppliers, for this attribute.

Figure 24

Trust is the one area where supplier websites dominated. Travelers in all markets rated suppliers higher for trust, often by a substantial margin (see Figure 25). Even in China, where OTAs have a solid lead, suppliers edged out OTAs in the trust category. With the exception of the U.K., where OTAs and metasearch websites were rated equally at 6.5, metasearch websites were consistently rated the lowest in terms of trust. While metasearch has gained significant ground as a shopping channel, relatively lower trust ratings suggest that traveler relationships may be the weakness of metasearch players.

Figure 25

In many markets, travelers were more likely to agree than disagree that it is safer to book with a supplier website than an OTA. However, most travelers were neutral, neither agreeing nor disagreeing (see Figure 26). Travelers in Brazil and China, however, were particularly likely to feel that supplier bookings were safer, with roughly 55% doing so in both markets. While this evaluation may seem odd given Chinese travelers' heavy use of OTAs for shopping and booking, the primary factor driving website selection is ease of use, often a key focus for OTAs in emerging markets.

Figure 26