Technology continues to revolutionize services, and the travel sector is no exception as it undergoes radical changes in how consumers gather information, book trips, and take personal control of their travel experience. Rockbridge has tracked travel technology trends for nearly two decades through the National Technology Readiness Survey, where we first followed the growth in online travel bookings (from 22% in 2007 to 58% in 2016), and most recently we are observing a shift to mobile platforms and reliance on apps. In the most recent wave, many interesting insights emerged – for example, more consumers now compare prices on search engines than rely on travel booking sites, and a minority of consumers believes travel booking sites offer better deals.
Our research confirms the obvious, that the travel sector in the United States is huge. In 2016, an estimated 155 million adults took at least one trip where they paid for accommodations (63% of adults) and 128 million paid for air fare (52%). In a one month period, 39 million (16%) paid for accommodations and 29 million (12%) paid for airfare. Against this backdrop, there is an interesting story about the role of technology.
Among those who had travelled within the past 12 months, booking travel and researching travel online were common – over eight in ten travelers (81%) booked travel online and nearly three-fourths (72%) gathered information about travel deals online. The same activities are not as prevalent on mobile platforms, with only 32% gathering information on their devices and a mere 22% actually booking. However, more consumers now book travel on mobile devices than through a travel agent (22% versus 20% respectively), and a third are interested in gathering information and booking on their mobile devices in the future.
Online travel sites like Expedia and Priceline once fueled growth in online travel booking, but today, most travelers book directly through the websites of hotels or airlines (68%), while almost half (48%) have booked through an online travel booking site. Consumers do not need to go to booking sites to compare prices, since the majority (52%) rely on online travel search engines (e.g., Google Flights). Only 15% of consumers relied on peer-to-peer services like Airbnb to book accommodations, but twice as many are interested in using them in the future. Peer-to-peer booking has the highest interest among younger consumers; for example, 21% of 18 to 24 year olds use these services, while 54% are interested in doing so in the future.
The advancements and developments in online travel price comparing has an impact on how consumers perceive value and where to find the best deal. Four in ten travelers believe that it is cheaper to book their flights and accommodations from an online travel booking site, yet almost the same percentage of travelers view it to be cheaper to book directly from airlines and hotels and another fifth believes there is no difference. This suggests that the price adjustments and competition between the airlines, hotels and travel booking sites are blurring the lines as to where one can get the cheapest price for their booking on a regular basis.
Technology does more than power searching and booking, with consumers taking advantage of a range of advanced travel and hospitality services. The most common travel technology features taking virtual room tours when booking hotels, using self-service kiosks at airports, and checking in on social media from the travel destination. The hotel experience promises to be shaped in the future by new and empowering features. For instance, a fifth (21%) of travelers have checked into a hotel room using their mobile phone. Only around a tenth of travelers have used other features to gain control over the hotel experience, including sending requests to staff, using a mobile as a room key, or using the phone to control room elements. Despite the low incidence of these behaviors, which are not widely introduced in hotels, there is a high degree of interest in engaging in them in the future.
Given current behaviors and interest in new technologies, we envision a future where travelers are increasingly in control of their travel experience through the ubiquitous smartphone. The future is likely to be one where consumers gather perfect price information from any location, leverage their devices to search for deals and make bookings directly with hotels and airlines, and co-create their optimal travel experiences with travel industry players. In this recent wave, peer-to-peer platforms like Airbnb do not seem to be disrupting the hotel industry, but the high level of interest in using them in the future should be cause for concern.
Written by: Kristiina Kinnunen, Research Manager and Robert Devall, Senior Director, Client Services