TripAdvisor, the largest travel community site on the web, has shown momentum as it has grown and evolved over the past year. Along with a 2008 site redesign, consumer written reviews continue to flow in at a leading rate, and several hundred thousand monthly leads are delivered to TripAdvisor advertising partners.

An average of 1.08% of site visitors has written a review over the past year, a significant volume when considering TripAdvisor.com averaged over 6 million US unique visitors since May 2007. In May 2008, 1.33% of site traffic posted a review, the highest activity level in the timeframe studied.

For comparison, Yahoo Travel Guides, a direct competitor of TripAdvisor, engaged an average of 0.7% of visitors to write a review over the past year. Dissimilar to the upward trend at TripAdvisor.com, just 0.59% of Travel Guides visitors posted a review in May 2008, a 13 month low.

With TripAdvisor continuing to grow its audience size, and subsequently the volume of consumer written reviews, it wields more and more leverage in online travel distribution, particularly within the hotel segment.

As such, many online travel agencies now depend upon the hundreds of thousands of referrals generated by TripAdvisor each month. Analyzing referrals from TripAdvisor’s hotel search results page in April 2008 shows Expedia, Inc. (TripAdvisor’s parent company) capturing 59% of the activity. Other OTA’s, such as Orbitz and Travelocity, have managed to capture 16% and 19% of referrals, respectively.

TripAdvisor has become a powerful site embedded in the online travel consideration process and is poised to remain there as long the steady flow of user-generated content continues. This volume of content, combined with effective marketing placements that its partners are eager to own, has left TripAdvisor in an enviable position. While other content and review sites such as Yahoo Travel Guides are meaningful in size, TripAdvisor remains the one to beat.

As with any airline merger, heavy integration between Delta and Northwest Airlines will be required. An overlooked integration component is the combined performance of the new company’s most important distribution channel, its website. An analysis of the two carrier websites identifies that while both are efficient online performers, it is Delta.com which is the higher converting channel and should be the focal point of future online distribution of Northwest flights.

So far in 2008 Delta.com and NWA.com have averaged 5 million and 3.3 million US unique visitors per month, respectively. The amount of cross-shoppers of the two sites – those visiting both sites – is consistently around 725,000 shoppers per month. In other words, an average of 15% of Delta.com prospects also visit NWA.com and an average of 22% of NWA.com visitors cross-shop Delta.com each month.

Of the two existing online channels, Delta maintains the better performing booking funnel. An average of 5.8% of Delta.com prospects purchase a flight on the site each month, compared to 5.0% on NWA.com. Shifting Northwest’s site platform to that of Delta’s, and thus increasing conversion rate, would result in an incremental $8M in direct bookings per month. This assumes all else is held constant and an average booking amount of $300 per transaction.

The new Delta-Northwest online channel will possess a significantly larger prospect base than either company owned individually. With a relatively small degree of cross-shopping existing between the two brands, the new entity has an opportunity for significant synergies and performance improvements. If the company is able to maintain the success of Delta.com when it combines with NWA.com it will see a healthy growth in bookings. Online channel success will play an important role in how well the integrated company performs, and should not be overlooked by those assessing the pro’s and con’s of the merger.

Like most ecommerce sites, the major online travel agencies heavily leverage search engines as a traffic source. Search engine referred traffic generally accounts for an average of 15% of all OTA referrals. Expedia consistently sources 20% of its referrals from search engines, the highest mark among the major sites. At the other end of the spectrum, just 8% of Hotwire referrals are search clicks from Google, Yahoo, MSN and other smaller engines.

The OTA’s also vary in their reliance upon branded versus non-branded search terms. On average, across all sites benchmarked, 40% of all search referrals come from a branded search term (containing the company’s name). Hotels.com runs the lowest share of branded search terms at 21% while Travelocity relies upon branded clicks for half of all its search referrals.

Each online travel agency has a different level of reliance upon search engine traffic as well as varying usage of branded and non-branded search terms. Some competitors like Expedia rely heavily upon search as a traffic source through their emphasis on non-branded search terms; others like Travelocity utilize the search engines less aggressively and attract a high share of branded keyword clicks. Compete, through its search analytics products, studies the ongoing flow of search traffic to OTA’s, suppliers and other travel sites on an ongoing basis. If your organization is in need of better search marketing intelligence, contact us to learn more.

Among online travel agencies, Priceline’s website conversion rates are near the highest in the group. This is fueled by a discount and price focused product and marketing mix, but is also helped by strong performing promotional campaigns. Compete analyzed promotional activity on Priceline, in particular its new “Sunshine Guaranteed” promotion, to assess what is working best.

Priceline’s shopper conversion rate, defined as the percentage of those who perform a search on the site that end up completing a booking, is 7%, nearly two percentage points higher than the OTA average of 5% (red bars). Promotional Clickers on Priceline, those who engage with some kind of promotional content while on the site, have an exceptional conversion rate of 13%, nearly twice the OTA average (blue bars).

In June, 12% of Priceline’s site traffic clicked on a promotion. The quirky but innovative Sunshine Guaranteed offer promises to refund vacation package purchases if an excessive amount of rainfall takes place on the trip. Analysis of the promotion shows that while it attracts just a niche audience (0.2% of Priceline shoppers), those who do click on this promotion are highly likely to convert (24% of Sunshine clickers will complete a booking).

Priceline’s Sunshine Guaranteed promotion is a strong example of the effectiveness that smaller, targeted travel promotions can have. Despite attracting relatively few clickers, it resonated with its audience and led to strong conversion rates. In contrast, Expedia’s recent Summer of Adventure campaign, also a successful promotion, generated huge online exposure among visitors to the Expedia website. Compete's data is evidence that both large campaigns like Expedia’s and more targeted offers such as Priceline’s Sunshine Guaranteed can be effective.

Recent news coverage suggests a discord growing between American Airlines and travel Meta Search operator Kayak. Reports are American Airlines may withdraw from Kayak (and its sister brand SideStep) due to frustration with having its AA.com search results compete directly against Orbitz.com and Cheaptickets.com for the same flights. As of the time of this research brief, AA.com flights were still available on Kayak. Compete analyzed American Airlines flight shoppers on Kayak to understand what AA.com might lose if it moves forward with this decision.

In June, Kayak.com and SideStep.com were responsible for sending 1.3% of all visits to AA.com. These visits converted (booked) at such a high rate, however, that almost 5% of all conversions on AA.com were immediately preceded by Kayak or SideStep. The visits referred from Kayak and SideStep to AA.com converted at 9.3% in June, well above the carrier website’s average per-visit conversion rate of 2.7%.

While the above figures suggest AA.com stands to lose a significant volume of business, other data suggests the impact could potentially be lighter. Without AA.com listings, Kayak users will have to click to Orbitz or Cheaptickets search results if they want to view American Airlines flights. Compete’s analysis of consumers clicking over to American Airlines flights on Orbitz yielded an interesting finding: 72% of these consumers will make their way to AA.com at some point during the same month, even if they do not use Kayak to do so.

If American decides to pull its flights off of Kayak, it will cut off a strong supply of quality prospects to its brand website. At nearly 5% of total AA.com conversions, this source of bookings is too large to be ignored and a decision that can not be taken lightly. The wildcard that remains is whether Kayak users who are looking for American Airlines flights will find AA.com on their own, if the listings are pulled. Initial data suggests this may be the case, however many variables stand to change if and when a final decision is made. For more information on this or other topics, please contact Compete.