Over the past thirteen months there has been a collective decline in site traffic among the online travel agencies. On average, visitors to the major third party sites index at 0.93X the levels from April 2007. While some major retail players, Expedia and Travelocity, have held on to near year ago levels, other sites are not faring as well.

Amidst the downturn, a trend has surfaced with the opaque sites Priceline and Hotwire managing to grow their audiences over the past year. Hotwire site traffic now indexes at 1.2X its April 2007 levels and Priceline sits at 1.1X.

Similarly, when looking at the volume of flight bookings executed at each major OTA, the “opaque” sites (which each also offer standard retail tickets) are experiencing large gains while the remaining agencies struggle to hold ground. Hotwire in particular is experiencing surging growth from a year ago in flight bookings, and Priceline is following the same trend with excellent growth.

Over the past year many of the online travel agencies have needed to work hard to maintain their share of the online travel market. As the economy has slowed and consumers have become more price sensitive, Hotwire and Priceline have a product and marketing mix that resonate with consumers and are driving transaction growth. As long as consumers remain heavily price-focused when looking for flights online, traditional retail OTA’s must work to hone their value propositions or risk losing market share.

Along with hotels, OTA’s, and airlines, Compete tracks online activity within the rental car category on an ongoing basis. The major players within the industry – Alamo, Avis, Budget, Dollar, Enterprise, Hertz, and Thrifty – all reflect a seasonal uptick in site traffic in the summer months followed by a decline in the winter. On average, each rental car website attracts 1 million unique visitors per month in Q4 and Q1, and 1.3 million during Q2 and Q3.

In April 2008 online activity across all competitors returned to almost the exact same level as April 2007. The largest competitor within the space, Enterprise.com, averaged 2.3 million unique visitors per month over the past year, and experienced a high of almost 3 million prospects in July 2007.

Conversion rates at the rental car sites – defined as the percentage of site traffic booking a car – ranges between 7% and 20% on a monthly basis. The sites earning the highest mark in this regard were Dollar.com and Avis.com at 18% in May 2008. Conversely, Budget.com and Hertz.com converted just 11% in the same time frame.

While site traffic fluctuates with the seasons, an average of 12% to 14% of prospects book year round across all sites.

Over the past 13 months the rental car industry has shown resiliency, as average site traffic and conversion rate remained consistent with year ago levels, despite external market factors such as rising gas prices and a slowing economy. While some rental car sites are certainly bigger than others, all sites have carved out their share of in-market prospects. As the rental car brands strive to improve their online channels, focusing on booking funnel improvements will provide the greatest return, especially for Budget.com and Hertz.com, the conversion rate laggards among the group.

In May, Priceline increased its Net Promoter Score by ten percentage points according to Compete’s ongoing Site Visitor Satisfaction studies. The increase was the largest among all online travel agencies which collectively averaged a decline of seven percentage points in Net Promoter Score. Priceline, whose discount focus appears to be resonating as the cost of travel is rising, now stands at six points above competitive average in this metric.

Segmenting out the Priceline Promoters illustrates exactly what is driving the site's high satisfaction index. Not surprisingly, Priceline Promoters gave the site positive marks across several categories in May. The highest marks given were for breadth of content, site layout and usability, and relevancy.

All of the OTA’s showed movement, some positive and some negative, in Net Promoter Score in May. Priceline managed the largest gain, an impressive 10 percentage points, versus the average seven percentage point decline. Amidst a worsening economy and rising airline prices it is not surprising that consumers are less satisfied as they shop for travel online. Priceline, however, is bucking the trend with its ubiquitous price-focused branding now increasingly resonating with consumers.

As OTA’s continue to test new content, functionality, and user experiences, trending Net Promoter Score becomes an important metric for gauging consumer feedback. As always, please contact Compete’s Travel Practice with questions.

Compared to a year ago, consumer traffic to hotel chain websites is growing strongly with gains being made at every major provider. Despite concerns of a slowing economy impacting the lodging sector, there are more online hotel shoppers than ever before, providing a healthy and growing channel for the efficient distribution of inventory.

The average growth rate heading into the summer for hotel supplier websites versus a year ago was an impressive 26%. Aside from a few unusual months, such as a difficult February for Intercontinental, every chain is posting solid growth. Leading the pack in May was Hilton at +34% compared to a year ago, and lagging was Choice at +10%.

Many of the hotel websites are converting visitors more effectively than they were in early 2007. Indexed against that period, conversion rates in May 2008 are averaging 1.05x growth. While Starwood, Hilton and Intercontinental are posting the strongest gains, Best Western is consistently under indexed against its position a year earlier. At a 0.8 conversion rate index, Best Western is lagging each of its major competitors in improving the efficiency of its online channel.

Although economic uncertainty is thought to be weighing on the minds of consumers, signs of strength still remain in online hotel distribution. Website audiences at leading hotel chains are powering ahead and are up significantly from year ago levels. Additionally, select competitors have managed to improve their conversion rates despite the growing volume of visitors. Sites such as Best Western, however, have seen their conversion rates decline and must make it a priority to optimize their online channel performance. If not in place already, competitive benchmarking against key rivals will be critical to making this a success.

Will you be attending the EyeForTravel conference in Chicago on 6/25-6/26? Compete will be offering a free Behavior Match analysis. Feel free to contact Jack Drew at jdrew@compete.com in advance and beat the rush. To schedule time to receive a Compete overview while at the conference, email Tim Beagen, Travel Sales Director, at tbeagen@compete.com.