Given the severity of the problems in other markets, less mainstream attention has been placed on the state of the travel industry. Compete analyzed online activity within the air and hotel categories to identify if shifts are taking place with consumer interest in these products. The findings are a clear decline in online travel research activity, with actual booking and purchase activity also trending downward.

Air and hotel shopper volumes (consumers researching but not necessarily purchasing) have both gone into negative territory compared to a year ago, which is a first for 2008. In each month of 2008 to this point, online air and hotel shoppers had been up versus the prior year periods. Cautious consumers then began thinking less about travel in September, and started to abandon travel websites in October. While only a fraction of shoppers end up completing a purchase in any given month, these declines represent an important shrinking of the pool of vacationers, last minute shoppers, and undecided consumers to which travel marketers can generate transactions from.

On the positive side, online travel bookers for air and hotel are still up compared to a year ago, however significant wind has been taken out of the sails. Shopping and researching activity is a leading indicator of future travel purchasing, and unless a positive catalyst takes place, it appears that bookings growth will be pressured further in the coming months.

Travel marketers have reason to be concerned and must pay close attention to the signals that their customers and online prospects are sending. Given the decline in shoppers to work with, a well-planned online marketing strategy is more important now than ever. With the right mix of online advertising to bring in new shoppers, helpful website functionality to cleanly present a variety of choices, and compelling offers to seal the deal, savvy competitors will weather the storm.

If you have not already done so, please contact Compete to determine how our travel team might be able to help your organization through this challenging period.