The News: In June of 2007, Priceline announced it would drop booking fees for its Summer Flight Sale. Due to the success of the promotion the company elected to permanently enact the promotion in early November, eliminating airline ticket booking fees for good. The new program applies to all published domestic and international flights but does not affect Pricelines’ opaque service, “Name Your Own Price”.

Compete Analysis: Priceline averaged 120,000 monthly US flight bookers in 2007, with a high of 157,000 transactions in July and a low of 86,000 purchasers in January. In June, the first month of the no-fee promotion, 136,000 travelers purchased flights on the OTA, a 15% increase from the prior month. By the time the no-fee policy was made permanent in November/December, Priceline flight bookers were consistently up compared to a year ago.

In regards to market share among OTA’s, Priceline maintained an average of 9% of online flight bookings over the course of 2007, trailing behind some of the larger competitors such as Expedia and Travelocity. In the months prior to the no-fee promotion, January through May, Priceline on average captured 7% of flight bookings. While offering no booking fees from June to December, Priceline managed to own 11% of flight transactions, successfully siphoning away 4 percentage points from competitors. Continuing with the success, Priceline averaged 12% of OTA flight transactions in the first two months of 2008, almost a 2X increase from a year ago.

Takeaways: Priceline initiated an effective no booking fee promotion in the summer months of 2007. Due to the success of the campaign, Priceline elected to permanently instate it. By eliminating airline ticket fees Priceline was able to more effectively differentiate itself from competitors and thus grab market share from the larger OTA sites. As the travel-heavy spring and summer months are fast approaching, a strongly emphasized No Booking Fees campaign, both online and off, would serve Priceline well, as consumers are clearly responsive to the policy when aware of it.

The News: Throughout 2007, JetBlue Airways announced that it would partner with several large online travel agencies, adding JetBlue flights to the inventory already offered by Orbitz Worldwide, Travelocity.com, Priceline.com, and Expedia.com.

Compete Analysis: JetBlue.com averaged 2,940,000 monthly US visitors in 2007 and managed a year-over-year site traffic uptick of 8% in January 2008. By securing distribution partnerships with the major OTAs, JetBlue now has a significantly larger audience of travelers seeing its inventory. Millions of new flight shoppers on OTA’s can now see JetBlue flights in their search results, even after subtracting out those OTA shoppers who also go direct to the JetBlue.com website. Over the past 12 months, Priceline.com, Expedia.com, Cheaptickets.com, Orbitz.com, and Travelocity.com collectively averaged 14.5 million monthly flight shoppers who did not already use JetBlue.com.

Compete has more visibility into which carriers are selected on Orbitz.com and CheapTickets.com than other OTA’s, and therefore we focused specifically on these two sites to gauge the frequency at which JetBlue flights are being selected on OTA’s. In the past several months, JetBlue has captured only a small portion of flight activity on the two Orbitz Worldwide sites. From November 2007 to March 2008, when visitors selected a flight from a search results page, JetBlue was the chosen brand just 3% of the time. The most frequently selected carrier, Delta, was chosen 17% of the time.

Takeaways: After several years away, JetBlue has finally returned to third party online travel agency sites. Although JetBlue represents just 3% of flights selected on OTA’s (using Orbitz/Cheaptickets as a yardstick), partnering with the large OTA sites gives JetBlue access to a significantly larger audience. JetBlue has publicly stated that consumers booking its flights through Expedia are higher-yielding customers than those on JetBlue.com. Even though 3% of OTA activity may not sound like much, the overwhelming number of incremental flight-shoppers who had not previously been considering JetBlue as a carrier looks to be justification for the new strategy.

The News: In January 2008, Yahoo made its FareChase Meta Search tool the default travel search option on its highly trafficked travel homepage. Yahoo Travel users can now choose between the default “Search multiple sites” through FareChase, or performing a “Classic Search”, the more traditional travel booking engine powered by Travelocity that had long been Yahoo Travel’s primary search tool.

Compete Analysis: The Yahoo Travel homepage was visited by 6.7 million US consumers in January 2008, the first month that FareChase was made the default search option. Referrals from Yahoo Travel into the FareChase Meta Search application jumped 184% from December to January. In February 2008, Yahoo travel referred 113,000 travel researchers to FareChase, a 140% increase over February 2007.

To assess what kind of impact the change has had on FareChase’s lead generation activity for its partners, a comparison of Meta Search referral volumes to American Airlines’ AA.com was performed. The results show that FareChase is still a small player in the lead generation game. Kayak, currently the largest Meta Search site, referred 120,000 prospects directly to AA.com in February, almost eight times larger than the 15,500 referrals created by FareChase. While FareChase did manage the category’s largest month over month increase at 65%, a significant gap still remains between it and Kayak-operated sites.

Takeaways: On the heels of Kayak’s purchase of SideStep, Yahoo Travel added its Meta Search site, FareChase, as the default fixture on its homepage. The move has helped fuel large gains in FareChase users, however despite the growth, FareChase is still not generating the volume of leads to partners that its competitors Kayak and SideStep are able to provide. If Yahoo wants to grow FareChase to a truly competitive level it must not only continue to leverage the millions of Yahoo Travel users each month, but also grow the volume of traffic that reaches FareChase from sources outside of Yahoo.

Consumers visiting online travel agency websites in early 2008 have given Travelocity.com the highest Net Promoter Score of all major online travel agencies. Each OTA’s Net Promoter Score is one of the components of Compete’s ongoing Site Visitor Satisfaction Study that measures consumer feedback on each of the 7 major travel agency websites. A brand’s Net Promoter score is one of the best indicators of website satisfaction and measures the likelihood of users to recommend the website to peers.

Travelocity.com visitors gave the site a Net Promoter Score of 45% to lead the category. As evidence of how widely differentiated the scoring can be, Orbitz Worldwide’s price-focused brand Cheaptickets.com received the lowest Net Promoter Score from consumers, at 15%. The average score across all seven OTA’s was 33%.

As expected, Travelocity visitors rate the travel site higher than Cheaptickets users rate the Net Promoter laggard across many criteria. The tracking study shows Travelocity consistently was at least 10% higher than Cheaptickets across all key site attributes, such as ease of use, overall website experience, and even perception of prices. The largest gap between the two sites was a 15% difference with regards to customer service.

Travelocity has been aggressive in its site development and marketing efforts and it is beginning to pay off in how site users are rating it. As branding of the Roaming Gnome grow stronger, and functionality such as the Experience Finder make the site a more complete travel shopping experience, Net Promoter scores may be poised to rise further. Stay tuned for future updates on trends in site satisfaction and Net Promoter scores, or contact Compete for information on getting ongoing access to the studies.

Many travel marketers are going after green consumers with environmentally-friendly initiatives, but how many of these shoppers are out there and which travel marketers are effectively attracting them? Compete used its Behavior Match product to analyze these issues, identifying environmentally-conscious consumers based on their web browsing behavior and directly measuring where they tend to shop for travel.

Findings show an average of 6-8 million green consumers online over the last 13 month period, with a peak in April 2007, and an upwards trend though the first quarter of 2008.

To measure where green consumers tend to shop for travel, Compete used Behavior Match to look first at the number of green shoppers at the seven online travel agencies over the last two quarters, and then to explore how effective the OTAs are at attracting green shoppers relative to each other. Findings show that in terms of volume, Expedia, Travelocity and Orbitz, the largest OTAs, lead the set in attracting green consumers.

While the largest OTA's attract the highest number of green shoppers, an index against overall market share was created to determine who is truly doing best in courting this group. Each OTA's share of green travel shoppers was indexed against its overall share of web traffic. The findings show that Orbitz is consistently over-indexing in attracting green shoppers, Hotels.com has been improving, and Cheaptickets.com is lagging the competitive set.

More than any other trend, however, performance across the set is mixed with no single OTA indexing at even 1.2X its overall market share among green shoppers. There remains a significant opportunity for online travel marketers to create content that resonates with and attracts green travel shoppers. Using Compete's Behavior Match, marketers can now directly measure their ability to target and engage these travelers, or hundreds of other lifestyle, affinity, behavioral, or demographic groups.