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2017 has been a busy year for the Skift Research Team. We have published some of our most-read reports about the evolving trends in the travel industry covering a multitude of sectors ranging from vacation rentals, payments, hotels, loyalty, direct booking and much more. We also introduced our Analyst Calls and Data Sheets which give a deeper insight into the topics we cover through discussions and hard data.
We have a strong lineup of research in the works for the second half of the year. Some topics include:
- The Chinese Travel Market
- Emerging Outbound Markets
- Company Deep Dives
- Data Insights into Consumer Trends
- Search in Travel
Below is a recap of the 5 most popular reports of 2017 so far:
The vacation rental market has captured serious attention from investors and travel consumers in recent years. The Airbnb marketplace disrupted and transformed the space by introducing a new category of rental: the underutilized resident-occupied flat, room, home, villa, treehouse, houseboat, and other forms of non-hotel accommodations. And while Airbnb has captivated the imagination of the mainstream media, an undercurrent of technological innovation has also taken root within the traditional, professionally-managed vacation rental space. In our vacation rental report, we analyze the role of Airbnb as a marketplace and distribution channel, but also look more broadly at the tech-enabled ecosystem that has developed around the professionally-managed investment property — most often referred to as the vacation rental (VR). Investments in the form of acquisitions and venture capital have poured into property management groups, third-party technology providers, and online marketplaces including Airbnb.
The tours and activities segment is one of the largest segments in the travel industry today, second only to flights and accommodations in terms of annual spending, both in the U.S. and abroad. Despite its potential, the market remains relatively untapped. Not only is the tours and activities market highly fragmented, dominated by small local suppliers rather than large operators, but the act of booking tours and activities itself has traditionally been a last-minute affair. Most travelers wait until just before their trips — or until they are actually on the ground — to make decisions about what tours and activities to participate in, in stark contrast to flights and hotels, which travelers tend to reserve months in advance. One of the leading challenges that online travel agents (OTAs) and other active players in the tour reselling space are currently facing is how to drive advanced bookings while tapping into the potential of mobile technology to provide travelers keen on sticking to their last-minute ways with ample opportunity to book tours on demand, with ease, from their mobile devices.
In our direct booking report we analyze distribution trends for the hotel industry by combining our own primary research and survey data from 375 hotel respondents with insights from leading hotels, online travel companies, and industry experts. These engaging interviews amount to a roundtable discussion from thought leaders in the hospitality industry. We discuss the ad campaigns launched by the mega brands and provide our estimates for implicit and explicit costs of customer acquisition across direct and indirect booking channels. We offer key findings from this data including current distribution mix and expected change in the next 24 months, profitability ranks of indirect and direct channels, ideal distribution mix, and predicted spending trends on Expedia, Booking.com, Ctrip, trivago, TripAdvisor, Kayak, Google AdWords, and Google Hotel Ads.
At close to 60,000 words including survey data along with new interviews from executives at Marriott, Hilton, Wyndham, IHG, Choice Hotels, Best Western, Red Lion, citizenM, and NH Hotel Group on the hotel side and Expedia, TripAdvisor, Kayak, trivago, Google, and Facebook on the digital side, what follows is one of our most comprehensive reports to date.
Facebook, with its massive and engaged user base, gives travel companies the ability to both build brand awareness and target consumers at a granular level to drive bookings. Conversion should continue to improve with the new dynamic ads for travel retargeting consumers across devices. Facebook Messenger and WhatsApp dominate the messaging app world with both having over one billion users. While some are excited about a messaging evolution for booking, we take a more pragmatic view with messaging being more about enhancing the customer experience. This improved experience can build brand loyalty and drive future bookings. The report discusses the best use cases across the various sub-sectors of the travel industry as well as how we see direct and indirect monetization playing out.
Google leads the market for digital advertising in travel, but Facebook is making a strong push into the space. While we fully expect Facebook to grow its travel market share in a meaningful way, Google will remain the dominant force in travel digital ad spending. Travel companies would love to reduce their reliance on Google, but it is premature to think of Facebook as being able to match Google’s footprint. This is not meant to minimize the importance of Facebook to the travel industry and the financial impact of travel on Facebook. Both will become significant. Instead, we make the argument that Facebook’s gains do not have to be a meaningful headwind for Google. We envision a world where both Google and Facebook benefit from the continued move from traditional advertising formats to digital. Google will continue to be the best functional tool at driving clicks to sites while Facebook is more visual and inspirational, but lacks the clear purchase intent of a Google search. Turning to the travel industry, competition for bookings among online travel companies themselves and between them and the hotels remains intense. Digital advertising will remain a crucial tool to drive traffic and conversions. This is a headwind for the travel industry, where ad spending growth is trending above revenue growth, but a nice tailwind for both Google and Facebook.
The entire discipline of marketing is in the midst of a sea change. Changing consumer attitudes toward advertising, combined with the growing importance of social media, are forcing marketers to adapt to a new reality. For the travel industry, this means focusing on the creation and promotion of content, a discipline that is seeing huge increases in budgets, interest, and attention. Marketers say the inspirational appeal of such content, combined with its increased credibility, helps it succeed with travel customers.
But even as content marketing becomes the travel industry’s dominant approach, lots of concerns remain about how to make and measure great content. Figuring out what type of content to create remains an open question, even as images and video continue to grow in popularity. Finding great content creators is another key challenge. Many travel marketers say they are spending more time partnering with so-called “influencers,” though doubts remain about how to measure their effectiveness and ensure high-quality results. There are also larger questions about how to measure the ROI of content marketing and where it should sit along the traditional marketing funnel, plus a growing need to localize content for new audiences in places like Asia, the Middle East, and Latin America.