Working for 4 years as the exclusive SEO specialist to one of the world’s leading luxury African safari vendors taught me the potency of the synergy online search & the travel industry enjoy. 20 of the world’s 4,000 most visited websites are online travel vendors. 8 travel websites are among the 1,000 most visited websites on planet earth as of August 2015. 75% of the Top 20 travel sites are hosted in the United States.
The online travel market took in $157 billion in 2013 in the United States alone. That’s $492.31 per man, woman & child in the US per year. Industry analysts project that fully 43% of all hotel bookings will be made online in 2015 in America.
U.S. OTA market
Expedia, Priceline, Orbitz Worldwide and Travelocity collectively hold 95% of the U.S. Online Travel Agency market. Expedia has a 40% market share of online bookings in the United States. Priceline holds a relatively small 16% in America – while their Booking.com website alone has soared to over 30% market share in Europe.
I have performed SEO on approximately 150-200 travel vendor websites & the oligopoly at the top of the Online Travel Agency marketplace is both fascinating & formidable.
Priceline usurped Expedia as #1 global online travel group five years ago. The American marker is the next priority for Priceline as they chase down Expedia’s market dominance. Priceline bought Kayak, a meta-search engine which holds fully half of the US travel search market. As a result the company held fully 26% of American online travel bookings in the final three months of 2013. The Priceline Group is made up of 5 core brands, namely: Booking.com, Priceline.com, Agoda.com, Kayak.com & Rentalcars.com.
Orbitz Worldwide hold 21% of the American market. They’ve invested in technology heavily & look like major long term players who will prevent competition being a simple Expedia vs. Priceline two horse race in the years ahead. Orbitz are also getting more directly involved in the online flight market. The company is geared for robust growth over the next 3 to 5 years. Having their IPO just before the 2007 crash, the company’s share-price is only now properly recovering previously lost ground.
More than half of Expedia’s revenue are derived from American bookings – so for the time being they are America’s #1 but mere also rans at the very top of the global online travel agency market. Expedia bought Travelocity for $280 million in early 2015.
The great unknown in the American (& global – in time – for that matter) online travel agency market is Amazon Destinations – launched as recently as 1 January 2015. Amazon’s travel option initially offered a hand picked hotels near major American cities.
OTA vs. Metasearch
54% of Chinese, 36% of American and 35% of British travelers use travel meta-search engines to check rates for accommodation online. Kayak saw 1.6 billion search queries in 2013. Qunar, a Chinese meta-search site, performed 3 billion queries for flights and hotels that same year. Meta-search for travel online has seen heavy levels of investment in recent years. The net effect of the mass uptake of price comparison via meta-search for travel is good for consumers but suffocating for profit margins within online travel as a whole. Google themselves launched Google Hotel Finder four years ago. With their various online assets the search giants were able to offer OTAs the attention of travelers on a mass scale. Google Hotel Price Ads was based on their classic cost-per-click model. It came as something of a surprise to see how well existing travel meta-search platforms responded to the Google challenge. Improved search experience has been key to their individual success in the face of Google’s entry into the market. For the most part, it has been the cream of the meta-search engines who have prospered – surprising many in the process.
As of April 2014, OTAs held 96% of booking on meta-search giant Kayak. Nearly half of TripAdvisor’s income comes from either Priceline or Expedia. Priceline and Expedia spend a total of $2.5 billion a year on Google search traffic – more than anyone else.
Meta-search sites dictate the share OTAs and hotel websites get within their travel search results working on a PPC/CPC model. OTAs bring with them vastly superior marketing budgets & have established a limited oligopoly that has crowded out smaller players or would be players. Amazon are one of few new entrants with a realistic chance based solely on the size of their pockets.
What Chance the Independent Hotel?
Independent hoteliers need to utilize the following aspects into their online marketing strategy to remain viable in the mega OTA era:
- Meta-search site users are looking for the lowest rate for a certain level of accommodation. Pricing thus has to be highly competitive.
- Non-bid elements play a part with Google & TripAdvisor. Make sure to optimize your Google Page & shoot for high quality scores as much as is possible.
- High Quality Content – just like with any other search engine, content & high quality content specifically will boost rankings. Good quality photographs, detailed information and details of amenities will all assist in this regard.
- Reviews of your hotel – User-generated-content is hugely important. Your reputation management here is pivotal.
Online Travel Agency Conversion Rates
Expedia complete around 12 million hotel bookings per month on 26,513,240 visitors which makes their conversion rate around 45.2%.
- booking.com 2,140,000 visitors per day. Server location: Netherlands. Alexa Traffic Rank: 91.
- tripadvisor.com 1,730,000 visitors per day. Server location: United States, Massachusetts, Newton Upper Falls. Alexa Traffic Rank: 170.
- expedia.com 808,000 visitors per day. Server location: United States, California, San Mateo. Alexa Traffic Rank: 393.
- kayak.com 432,000 visitors per day. Server location: Switzerland. Alexa Traffic Rank: 480.
- agoda.com 389,000 visitors per day. Server location: Thailand. Alexa Traffic Rank: 490.
- priceline.com 358,000 visitors per day. Server location: United States, Connecticut, Norwalk. Alexa Traffic Rank: 621.
- hilton.com 281,000 visitors per day. Server location: United States, California, Beverly Hills. Alexa Traffic Rank: 902.
- tripadvisor.co.uk 268,000 visitors per day. Server location: United States, Massachusetts, Newton Upper Falls. Alexa Traffic Rank: 893.
- vrbo.com 231,000 visitors per day. Server location: United States, Colorado, Denver. Alexa Traffic Rank: 1,344.
- orbitz.com 225,000 visitors per day. Server location: United States, Illinois, Chicago. Alexa Traffic Rank: 1,343.
- homeaway.com 214,000 visitors per day. Server location: United States, Colorado, Denver. Alexa Traffic Rank: 1,584.
- lonelyplanet.com 203,000 visitors per day. Server location: United States, Delaware, Wilmington. Alexa Traffic Rank: 1,783.
- travelocity.com 195,000 visitors per day. Server location: United States, California, San Mateo. Alexa Traffic Rank: 1,934.
- hotwire.com 188,000 visitors per day. Server location: Netherlands, Noord-Holland, Amsterdam. Alexa Traffic Rank: 1,946.
- lastminute.com 159,000 visitors per day. Server location: United States, Texas, Southlake. Alexa Traffic Rank: 2,728.
- hyatt.com 155,000 visitors per day. Server location: United States, Maryland, Annapolis. Alexa Traffic Rank: 2,680.
- couchsurfing.com 154,000 visitors per day. Server location: United States, Virginia, Ashburn. Alexa Traffic Rank: 2,800.
- travelzoo.com 144,000 visitors per day. Server location: United States, Massachusetts, Cambridge. Alexa Traffic Rank: 2,924.
- accorhotels.com 129,000 visitors per day. Server location: France. Alexa Traffic Rank: 3,523.
- hotelscombined.com 92,500 visitors per day. Server location: United States, Texas, Dallas. Alexa Traffic Rank: 3,975.
Quality Supplemental Content
The following will enrich your understanding of the online travel agency marketplace: