Eyefortravel - North American Online Travel Report 2009

North American Online Travel Report 2009

EyeforTravel Research 7-9 Fashion Street London E1 6PX UK For queries contact: [email protected] www.eyefortravelresearch.com EyeforTravel Ltd, April 2009

2

© EyeforTravel Research. All rights reserved.

Table of Contents

North America Online Travel Report 2009

Table of Contents List of Figures Methodology Executive Summary

5 14 19

Chapter 1: North American Travel Market Overview

31

North American Travel Market Overview US vs. Canada Travel Market Analysis US Travel Market Analysis Canadian Travel Market Analysis

31 51 59 68

Chapter 2: Online Market Infrastructure and Consumer Insight Overview

77

Internet Penetration The Use of Electronic Payment Cards Outbound Destinations

77 78 82

Chapter 3: North American Travel Sector Analysis

85

3.1 Airline Sector US Airline Market Analysis Canadian Airline Market Analysis 3.2 Hotel Sector US Hotel Market Analysis Canadian Hotel Market Analysis 3.3 Car Rental Sector US Car Rental Market Analysis Canadian Car Rental Market Analysis 3.4 Rail Sector US Rail Market Analysis Canadian Rail Market Analysis

© EyeforTravel Research. All rights reserved.

85 91 102 119 127 138 149 158 169 180 185 188

3

Table of Contents

3.5 Cruise Sector US Cruise Market Analysis Canadian Cruise Market Analysis 3.6 Bus Sector

197 206 213

US Bus Market Analysis Canadian Bus Market Analysis 3.7 Package Sector US Package Market Analysis Canadian Package Market Analysis Chapter 4: Online Travel Agent (OTA) Sector Analysis North American OTA Market Overview US OTA Market Analysis Canadian OTA Market Analysis

4

192

© EyeforTravel Research. All rights reserved.

217 221 226 233 243 253 253 260 270

List of Figures

North America Online Travel Report 2009

List of Figures Figure 1.1: Figure 1.2: Figure 1.3: Figure 1.4: Figure 1.5: Figure 1.6: Figure 1.7: Figure 1.8: Figure 1.9: Figure 1.10: Figure 1.11: Figure 1.12: Figure 1.13: Figure 1.14: Figure 1.15: Figure 1.16: Figure 1.17: Figure 1.18: Figure 1.19: Figure 1.20: Figure 1.21: Figure 1.22: Figure 1.23: Figure 1.24: Figure 1.25: Figure 1.26: Figure 1.27: Figure 1.28: Figure 1.29: Figure 1.30: Figure 1.31: Figure 1.32: Figure 1.33: Figure 1.34: Figure 1.35: Figure 1.36: Figure 1.37: Figure 1.38: Figure 1.39: Figure 1.40: Figure 1.41: Figure 1.42: Figure 1.43: Figure 1.44: Figure 1.45: Figure 1.46: Figure 1.47: Figure 1.48: Figure 1.49: Figure 1.50: Figure 1.51:

North America Total Volume of Travel, 2002-2012F North America Volume of Travel - Domestic vs. Outbound (%), 2002-2012F North America Volume of Domestic Travel, 2002-2012F North America Volume of Outbound Travel, 2002-2012F North America Travel Market Gross Value, 2002-2012F Spend per Trip in US$ (North America), 2002-2012F North American Travel Market - Sector Breakdown (US$), 2002-2012F North American Travel Market - Sector Breakdown (%), 2008 North American Travel Market - Sector Breakdown (%), 2002-2012F North American Travel Market - Y-o-Y Growth by Sector, 2002-2012F North American Travel Market - CAGR by Sector, 2002-2007 and 2008-2012F Online Penetration of the North American Travel Market, 2002-2012F Value of North American Travel Market - Online vs. Offline, 2002-2012F Sector Breakdown of North American Online Travel Market (%), 2008 Sector Breakdown of North American Online Travel Market (%), 2002-2012F North American Online Travel Market - CAGR by Sector, 2002-2007 and 2008-2012F Online/Offline Distribution Values - North American Airline Market, 2002-2012F Online/Offline Distribution Values - North American Hotel Market, 2002-2012F Online/Offline Distribution Values - North American Car Rental Market, 2002-2012 Online/Offline Distribution Values - North American Bus Market, 2002-2012F Online/Offline Distribution Values - North American Cruise Market, 2002-2012F Online/Offline Distribution Values - North American Railway Market, 2002-2012F Online/Offline Distribution Values - North American Package Market, 2002-2012F Value of the North American Travel Market - Domestic vs. Outbound, 2002-2012F North American Travel Market - Domestic vs. Outbound (%), 2008 North American Travel Market - Domestic vs. Outbound (%), 2002-2012F North American Travel Market - Y-o-Y Growth Domestic vs. Outbound (%), 2002-2012F Spend per Trip (North America Averages) - Domestic vs. Outbound, 2002-2012F North American Online Travel Market - Domestic vs. Outbound (%), 2002-2012F North American Online Travel Market - Domestic vs. Outbound (%), 2008 Value of the North American Online Travel Market - Domestic vs. Outbound, 2002-2012F North American Online Travel Market - Y-o-Y Growth Domestic vs. Outbound (%), 2002-2012F North American Domestic Online Travel Market - Sector Breakdown (%), 2002-2012F North American Domestic Online Travel Market - Sector Breakdown (%), 2008 North American Domestic Online Travel Market - Sector Breakdown Values (US$), 2002-2012F North American Outbound Online Travel Market - Sector Breakdown (%), 2002-2012F North American Outbound Online Travel Market - Sector Breakdown (%), 2008 North American Outbound Online Travel Market Value - Sector Breakdown (US$), 2002-2012F US vs. Canada Total Volume of Travel, 2002-2012F US vs. Canada Total Volume of Travel (%), 2002-2012F US Volume of Domestic Trips, 2002-2012F US Volume of Outbound Trips, 2002-2012F Canada Volume of Domestic Trips, 2002-2012F Canada Volume of Outbound Trips, 2002-2012F Value of the North American Travel Market - US vs. Canada, 2002-2012F North American Travel Market - US vs. Canada (%), 2002-2012F Average Spend per Person per Trip - US and Canada, 2002-2012F North American Online Travel Market - US vs.Canada (%), 2002-2012F Value of the North American Online Travel Market, US vs. Canada, 2002-2012F Online Penetration Comparison of the US and Canadian Gross Travel Markets, 2002-2012F Online Penetration of the US Gross Travel Market, 2002-2012F

© EyeforTravel Research. All rights reserved.

31 31 32 32 33 33 34 34 35 36 36 37 38 39 39 40 41 41 41 42 42 42 43 43 44 44 45 45 46 47 47 47 48 49 49 50 50 50 51 52 52 53 53 53 54 55 55 56 56 57 58

5

List of Figures

Figure 1.52: Figure 1.53: Figure 1.54: Figure 1.55: Figure 1.56: Figure 1.57: Figure 1.58: Figure 1.59: Figure 1.60: Figure 1.61: Figure 1.62: Figure 1.63: Figure 1.64: Figure 1.65: Figure 1.66: Figure 1.67: Figure 1.68: Figure 1.69: Figure 1.70: Figure 1.71: Figure 1.72: Figure 1.73: Figure 1.74: Figure 1.75: Figure 1.76: Figure 1.77: Figure 1.78: Figure 1.79: Figure 1.80: Figure 1.81: Figure 1.82: Figure 1.83: Figure 1.84: Figure 1.85: Figure 2.1: Figure 2.2: Figure 2.3: Figure 2.4: Figure 2.5: Figure 2.6: Figure 2.7: Figure 2.8: Figure 2.9: Figure 2.10: Figure 2.11: Figure 2.12: Figure 3.1.1: Figure 3.1.2: Figure 3.1.3: Figure 3.1.4: Figure 3.1.5: Figure 3.1.6: Figure 3.1.7: Figure 3.1.8: Figure 3.1.9: Figure 3.1.10:

6

Online Penetration of the Canadian Gross Travel Market, 2002-2012F Value of the US Gross Travel Market, 2002-2012F Value of the US Online Travel Market, 2002-2012F US Travel Market - Domestic vs. Outbound (%), 2002-2012F Value of US Gross Travel Market - Domestic vs. Outbound, 2002-2012F Outbound Travel Destination Trends, 2002-2012F Value of US Online Travel Market - Domestic vs. Outbound, 2002-2012F US Online Travel Market - Domestic vs. Outbound (%), 2002-2012F Online Penetration Comparison of US Domestic and Outbound Travel Markets, 2002-2012F US Travel Market - Sector Breakdown (%), 2002-2012F US Travel Market - Sector Breakdown (%), 2008 US Travel Market - Sector Breakdown (US$), 2002-2012F US Travel Market - Y-o-Y Growth by Sector, 2002-2012F US Online Travel Market - Sector Breakdown (%), 2002-2012F US Online Travel Market - Sector Breakdown (%), 2008 US Online Travel Market - Sector Breakdown (US$), 2002-2012F US Online Travel Market - Y-o-Y Growth by Sector, 2002-2012F Sector Online Penetration, 2002-2012F Value of the Canadian Gross Travel Market, 2002-2012F Canadian Travel Market - Domestic vs. Outbound (%), 2002-2012F Value of the Canadian Travel Market - Domestic vs. Outbound, 2002-2012F Value of the Canadian Online Travel Market, 2002-2012F Canadian Online Travel Market - Domestic vs. Outbound (%), 2002-2012F Online Penetration Comparison of Domestic and Outbound Canadian Travel Market, 2002-2012F Value of the Canadian Online Travel Market – Domestic vs. Outbound, 2002-2012F Canadian Travel Market - Sector Breakdown (%), 2002-2012F Canadian Travel Market - Sector Breakdown (%), 2008 Canadian Travel Market - Sector Breakdown (CAD $), 2002-2012F Canadian Travel Market - Y-o-Y Growth by Sector, 2002-2012F Canadian Online Travel Market - Sector Breakdown (%), 2002-2012F Canadian Online Travel Market - Sector Breakdown (%), 2008 Sector Online Penetration, 2002-2012F Canadian Online Travel Market - Y-o-Y Growth by Sector, 2002-2012F Canadian Online Travel Market - Sector Breakdown (CAD $), 2002-2012F Internet User Penetration - US vs. Canada (%), 2000-2007 Total Volume of Internet User - US vs. Canada, 2000-2007 Broadband Subscriber Penetration - US vs. Canada (%), 2000-2007 Financial Cards per Capita US vs. Canada, 2000-2007 US Travel Payment Methods, 2007 “I don’t like Giving out my Credit Card Number or Personal Information Online” Canadians that Have Ordered the Following Products Online in the Last 12 Months, 2005 and 2007 Consumer Confidence Index US vs. Canada, 2002-2008 Most Popular Outbound Destinations for US Travellers, 2006-2007 Most Popular Outbound Destinations for Canadian Travellers, 2006-2007 Top US States by Canadian Visits, 2007 Canadian Traveller Spending by US State, 2007 Value of the North American Airline Market, 2002-2012F Online Penetration of the North American Airline Market, 2002-2012F Value of North American Airline Market - Online vs. Offline, 2002-2012F North American Online Airline Market as % of Total North American Online Travel Market Value of the North American Online Airline Market Value, 2002-2012F North American Airline Market - Domestic vs. Outbound (%), 2002-2012F Value of North American Gross Airline Market - Domestic vs. Outbound, 2002-2012F North American Online Airline Market - Domestic vs. Outbound (%), 2002-2012F Value of North American Online Airline Market - Domestic vs. Outbound, 2002-2012F North American Online Airline Market - US vs. Canada (%), 2002-2012F

© EyeforTravel Research. All rights reserved.

58 59 59 60 61 62 62 63 63 64 65 65 65 66 66 67 67 67 68 69 69 70 71 71 72 73 73 74 74 75 75 76 76 76 77 77 78 78 79 80 81 81 82 82 83 83 85 85 86 86 87 87 88 88 89 89

Figure 3.1.11: Figure 3.1.12: Figure 3.1.13: Figure 3.1.14: Figure 3.1.15: Figure 3.1.16: Figure 3.1.17: Figure 3.1.18: Figure 3.1.19: Figure 3.1.20: Figure 3.1.21: Figure 3.1.22: Figure 3.1.23: Figure 3.1.24: Figure 3.1.25: Figure 3.1.26: Figure 3.1.27: Figure 3.1.28: Figure 3.1.29: Figure 3.1.30: Figure 3.1.31: Figure 3.1.32: Figure 3.1.33: Figure 3.1.34: Figure 3.1.35: Figure 3.1.36: Figure 3.1.37: Figure 3.1.38: Figure 3.1.39: Figure 3.1.40: Figure 3.1.41: Figure 3.1.42: Figure 3.1.43: Figure 3.1.44: Figure 3.1.45: Figure 3.1.46: Figure 3.1.47: Figure 3.1.48: Figure 3.1.49: Figure 3.1.50: Figure 3.1.51: Figure 3.1.52: Figure 3.1.53: Figure 3.1.54:

List of Figures

North America Online Travel Report 2009

Value of North American Online Airline Market - US vs. Canada, 2002-2012F 90 Online Penetration Comparison of North American, US and Canadian Airline Markets, 2002-2012F 90 US Airline Market - Domestic vs. Outbound (%), 2002-2012F 91 Value of US Domestic Airline Market, 2002-2012F 91 US Domestic Airline Market - Traditional Airlines vs. Low Cost Carriers (%), 2002-2012F 92 Value of the US Domestic Airline Market - Traditional Airlines vs. Low Cost Carriers, 2002-2012F 92 Online Penetration of the US Airline Market, 2002-2012F 93 Value of the US Airline Market - Online vs. Offline, 2002-2012F 94 Online Penetration Comparison of Total, Domestic and Outbound US Airline Markets, 2002-2012F 95 Online Penetration of the US Domestic Airline Market, 2002-2012F 95 Online Penetration of the US Outbound Airline Market, 2002-2012F 95 Value of the US Online Airline Market - Domestic vs. Outbound, 2002-2012F 96 Value of the US Domestic Airline Market Value - Online vs. Offline, 2002-2012F 96 US Domestic Online Airline Market - Online Penetration of Traditional Airlines and Low Cost Carriers, 2002-2012F 97 US Domestic Online Airline Market - Traditional Airlines vs. Low Cost Carriers (%), 2002-2012F 97 US Domestic Online Airline Market Value - Traditional Airlines vs. Low Cost Carriers, 2002-2012 98 Value of the US Outbound Airline Market - Online vs. Offline, 2002-2012F 98 US Online Airline Market - Direct vs. Indirect Distribution (%), 2002-2012F 99 Value of the US Online Airline Market - Direct vs. Indirect Distribution, 2002-2012F 99 US Domestic Online Airline Market - Direct vs. Indirect Distribution, 2002-2012F 100 US Outbound Online Airline Market - Direct vs. Indirect Distribution, 2002-2012F 100 US Outbound Online Airline Market - Direct vs. Indirect Distribution (%), 2002-2012F 101 Value of the Canadian Gross Airline Market, 2002-2012F 102 Canadian Airline Market - Domestic vs. Outbound (%), 2002-2012F 103 Value of the Canadian Airline Market - Domestic vs. Outbound, 2002-2012F 103 Canadian Domestic Airline Market - Traditional Airlines vs. Low Cost Carriers (%), 2002-2012F 104 Value of the Canadian Domestic Airline Market - Traditional Airlines vs. Low Cost Carriers, 2002-2012F 105 Online Penetration of the Canadian Airline Market, 2002-2012F 106 Value of the Canadian Airline Market - Offline vs. Online, 2002-2012F 107 Airline Sector Contribution to Canadian Total, Domestic and Outbound Online Travel Markets, 2002-2012F 108 Online Penetration Comparison of Total, Domestic and Outbound Canadian Online Airline Markets, 2002-2012F 108 Online Penetration of the Domestic Canadian Travel Market, 2002-2012F 109 Online Penetration of the Outbound Canadian Travel Market, 2002-2012F 109 Value of the Canadian Domestic Airline Market - Online vs. offline, 2002-2012F 110 alue of the Canadian Outbound Airline Market - Online vs. offline, 2002-2012F 110 Canadian Online Airline Market Value - Domestic vs. Outbound, 2002-2012F 111 Canadian Online Airline Market - Domestic vs. Outbound (%), 2002-2012F 112 Canadian Domestic Airline Market - Traditional Airlines vs. Low Cost Carriers (%), 2002-2012F 112 Online Penetration of Traditional Airline & Low Cost Carrier Canadian Domestic Airline Markets, 2002-2012F 113 Value of Canadian Domestic Online Airline Market - Traditional Airlines vs. Low Cost Carriers, 2002-2012F 113 Canadian Online Airline Market - Direct vs. Indirect Distribution %, 2002-2012F 114 Value of Canadian Online Airline Market - Direct vs. Indirect Distribution, 2002-2012F 115 Canadian Domestic Online Airline Market - Direct vs. Indirect Distribution (%), 20022012F 116 Canadian Outbound Online Airline Market - Direct vs. Indirect Distribution (%), 2002-2012F 116

© EyeforTravel Research. All rights reserved.

7

List of Figures

Figure 3.1.55: Figure 3.1.56: Figure 3.2.1: Figure 3.2.2: Figure 3.2.3: Figure 3.2.4: Figure 3.2.5: Figure 3.2.6: Figure 3.2.7: Figure 3.2.9: Figure 3.2.10: Figure 3.2.11: Figure 3.2.12: Figure 3.2.13: Figure 3.2.14: Figure 3.2.15: Figure 3.2.16: Figure 3.2.17: Figure 3.2.18: Figure 3.2.19: Figure 3.2.20: Figure 3.2.21: Figure 3.2.22: Figure 3.2.23: Figure 3.2.24: Figure 3.2.25: Figure 3.2.26: Figure 3.2.27: Figure 3.2.28: Figure 3.2.29: Figure 3.2.30: Figure 3.2.31: Figure 3.2.32: Figure 3.2.33: Figure 3.2.34: Figure 3.2.35: Figure 3.2.36: Figure 3.2.37: Figure 3.2.38: Figure 3.2.39: Figure 3.2.40: Figure 3.2.41: Figure 3.2.42: Figure 3.2.43: Figure 3.2.44: Figure 3.2.45: Figure 3.2.46:

8

Value of Canadian Domestic Online Airline Market - Direct vs. Indirect Distribution, 2002-2012F Value of Canadian Outbound Online Airline Market - Direct vs. Indirect Distribution, 2002-2012F Value of North American Gross Hotel Market, 2002-2012F Online Penetration of the North American Hotel Market, 2002-2012F Value of the North American Hotel Market, Offline vs. Online, 2002-2012F North American Online Hotel Market as % of Total North American Online Travel Market Value of North American Online Hotel Market, 2002-2012F North American Hotel Market - Domestic vs. Outbound (%), 2002-2012F Value of North American Hotel Market - Domestic vs. Outbound, 2002-2012F Value of North American Online Hotel Market - Domestic vs. Outbound, 2002-2012F North American Hotel Market - US vs. Canada (%), 2002-2012F Value of North American Hotel Market - US vs. Canada, 2002-2012F North American Online Hotel Market - US vs. Canada (%), 2002-2012F Online Penetration Comparison of North American, US and Canadian Hotel Markets, 2002-2012F Value of the North American Online Hotel Market - US vs. Canada, 2002-2012F US Hotel Market - Domestic vs. Outbound (%), 2002-2012F Value of the US Hotel Market - Domestic vs. Outbound, 2002-2012F Online Penetration of the US Hotel Market, 2002-2012F Value of the US Hotel Market - Online vs. Offline, 2002-2012F US Gross, Domestic and Outbound Online Hotel Markets as % of Respective Online Travel Market, 2002-2012F Value of the US Online Hotel Market - Domestic vs. Outbound, 2002-2012F Online Penetration Comparison of Total, Domestic and Outbound US Hotel Markets, 2002-2012F Value of the US Online Domestic Hotel Market - Online vs. Offline, 2002-2012F Online Penetration of the US Domestic Hotel Market, 2002-2012F Value of the US Online Outbound Hotel Market - Online vs. Offline, 2002-2012F Online Penetration of the US Outbound Hotel Market, 2002-2012F US Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the US Online Hotel Market, Direct vs. Indirect, 2002-2012F US Domestic Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F US Outbound Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the US Domestic Online Hotel Market Value, Direct vs. Indirect Distribution, 2002-2012F Value of the US Outbound Online Hotel Market Value, Direct vs. Indirect Distribution, 2002-2012F Canadian Hotel Market - Domestic vs. Outbound (%), 2002-2012F Value of the Canadian Hotel Market - Domestic vs. Outbound, 2002-2012F Online Penetration of the Canadian Hotel Market, 2002-2012F Value of the Canadian Hotel Market, Offline vs. Online, 2002-2012F Online Penetration of the Canadian Domestic Hotel Market, 2002-2012F Online Penetration of the Canadian Outbound Hotel Market, 2002-2012F Canadian Gross, Domestic and Outbound Online Hotel Markets as % of Respective Online Travel Market, 2002-2012F Value of the Canadian Online Hotel Market - Domestic vs. Outbound, 2002-2012F Value of the Canadian Domestic Hotel Market - Offline vs. Online, 2002-2012F Value of the Canadian Outbound Hotel Market - Offline vs. Online, 2002-2012F Canadian Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the Canadian Online Hotel Market, Direct vs. Indirect, 2002-2012F Canadian Domestic Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F Canadian Outbound Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the Canadian Domestic Online Hotel Market, Direct vs. Indirect Distribution, 2002-2012F

© EyeforTravel Research. All rights reserved.

117 118 119 120 120 120 121 122 122 123 124 124 125 125 126 127 128 128 129 130 130 131 132 132 132 133 134 134 135 135 136 136 138 139 139 140 141 141 142 143 143 144 144 145 146 146 147

Figure 3.2.47: Figure 3.3.1: Figure 3.3.2: Figure 3.3.3: Figure 3.3.4: Figure 3.3.5: Figure 3.3.6: Figure 3.3.7: Figure 3.3.8: Figure 3.3.9: Figure 3.3.10: Figure 3.3.11: Figure 3.3.12: Figure 3.3.13: Figure 3.3.14: Figure 3.3.15: Figure 3.3.16: Figure 3.3.17: Figure 3.3.18: Figure 3.3.19: Figure 3.3.20: Figure 3.3.21: Figure 3.3.22: Figure 3.3.23: Figure 3.3.24: Figure 3.3.25: Figure 3.3.26: Figure 3.3.27: Figure 3.3.28: Figure 3.3.29: Figure 3.3.30: Figure 3.3.31: Figure 3.3.32: Figure 3.3.33: Figure 3.3.34: Figure 3.3.35: Figure 3.3.36: Figure 3.3.37: Figure 3.3.38: Figure 3.3.39: Figure 3.3.40: Figure 3.3.41: Figure 3.3.42: Figure 3.3.43: Figure 3.3.44:

List of Figures

North America Online Travel Report 2009

Value of the Canadian Outbound Online Hotel Market, Direct vs. Indirect Distribution, 2002-2012F 147 Value of the North American Gross Car Rental Market, 2002-2012F 149 North American Car Rental Market - Domestic vs. Outbound (%), 2002-2012F 149 Value of North American Gross Car Rental Market - Domestic vs. Outbound, 2002-2012F 150 Online Penetration of the North American Car Rental Market, 2002-2012F 151 Value of the North American Online Car Rental Market, 2002-2012F 151 Value of the North American Offline Car Rental Market, 2002-2012F 152 Online Penetration of the North American Domestic Car Rental Market, 2002-2012F 152 Value of North American Domestic Car Rental Market - Offline vs. Online, 2002-2012F 153 Online Penetration of the North American Outbound Car Rental Market, 2002-2012F 153 Value of North American Outbound Car Rental Market - Offline vs. Online, 20022012F 154 North American Car Rental Market - US vs. Canada (%), 2002-2012F 155 Value of the North American Car Rental Market - US vs. Canada, 2002-2012F 155 North American Online Car Rental Market - US vs. Canada (%), 2002-2012F 156 Value of the North American Online Car Rental Market - US vs. Canada, 2002-2012F 156 Car Rental Sector Contribution to Total North American, US and Canadian Online Travel Markets, 2002-2012F 157 US Car Rental Market - Domestic vs. Outbound (%), 2002-2012F 158 Value of the US Car Rental Market - Domestic vs. Outbound, 2002-2012F 158 Car Rental Sector Contribution to US Total, Domestic and Outbound Travel Markets, 2002-2012F 159 US Car Rental Market - Online vs. Offline (%), 2002-2012F 160 Value of the US Car Rental Market - Online vs. Offline, 2002-2012F 160 Online Penetration Comparison of Total, Domestic and Outbound US Car Rental Market, 2002-2012F 161 Car Rental Sector Contribution to US Total, Domestic and Outbound Online Travel Markets, 2002-2012F 162 US Online Car Rental Market, Domestic vs. Outbound (%), 2002-2012F 162 Value of US Online Car Rental Market - Domestic vs. Outbound, 2002-2012F 163 Online Penetration of the US Domestic Car Rental Market, 2002-2012F 163 Value of US Domestic Car Rental Market - Online vs. Offline, 2002-2012F 164 Online Penetration of the US Outbound Car Rental Market, 2002-2012F 164 Value of US Outbound Car Rental Market - Online vs. Offline, 2002-2012F 164 US Online Car Rental Market - Direct vs. Indirect Distribution (%), 2002-2012F 165 Value of the US Online Car Rental Market, Direct vs. Indirect Distribution, 2002-2012F 165 US Domestic Online Car Rental Market, Direct vs. Indirect Distribution (%), 2002-2012F 166 US Outbound Online Car Rental Market, Direct vs. Indirect Distribution (%), 2002-2012F 167 Value of the US Domestic Online Car Rental Market, Direct vs. Indirect Distribution, 2002-2012F 167 Value of the US Outbound Online Car Rental Market, Direct vs. Indirect Distribution, 2002-2012F 168 Canadian Car Rental Market - Domestic vs. Outbound (%), 2002-2012F 169 Value of the Canadian Car Rental Market - Domestic vs. Outbound, 2002-2012F 170 Online Penetration of the Canadian Car Rental Market, 2002-2012F 170 Value of the Canadian Car Rental Market, Online vs. Offline, 2002-2012F 171 Online Penetration Comparison of Total, Domestic and Outbound Canadian Car Rental Market, 2002-2012F 172 Car Rental Sector Contribution to Canadian Total, Domestic and Outbound Online Travel Markets, 2002-2012F 172 Canadian Online Car Rental Market - Domestic vs. Outbound Distribution (%), 20022012F 173 Value of the Canadian Online Car Rental Market - Domestic vs. Outbound Distribution, 2002-2012F 173 Value of the Canadian Domestic Car Rental Market - Online vs. Offline, 2002-2012F 174 Online Penetration of the Canadian Domestic Car Rental Market, 2002-2012F 175

© EyeforTravel Research. All rights reserved.

9

List of Figures

Figure 3.3.45: Figure 3.3.46: Figure 3.3.47: Figure 3.3.48: Figure 3.3.49: Figure 3.3.50: Figure 3.3.51: Figure 3.3.52: Figure 3.4.1: Figure 3.4.2: Figure 3.4.3: Figure 3.4.4: Figure 3.4.5: Figure 3.4.6: Figure 3.4.7: Figure 3.4.8: Figure 3.4.9: Figure 3.4.10: Figure 3.4.11: Figure 3.4.12: Figure 3.4.13: Figure 3.4.14: Figure 3.4.15: Figure 3.4.16: Figure 3.4.17: Figure 3.4.18: Figure 3.4.19: Figure 3.5.1: Figure 3.5.2: Figure 3.5.3: Figure 3.5.4: Figure 3.5.5: Figure 3.5.6: Figure 3.5.7: Figure 3.5.8: Figure 3.5.9: Figure 3.5.10: Figure 3.5.11: Figure 3.5.12: Figure 3.5.13: Figure 3.5.14: Figure 3.5.15: Figure 3.5.16: Figure 3.5.17: Figure 3.5.18: Figure 3.5.19: Figure 3.5.20: Figure 3.5.21: Figure 3.5.22: Figure 3.5.23:

10

Value of the Canadian Outbound Car Rental Market - Online vs. Offline, 2002-2012F Online Penetration of the Canadian Outbound Car Rental Market, 2002-2012F Canadian Online Car Rental Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the Canadian Online Car Rental Market - Direct vs. Indirect Distribution, 2002-2012F Canadian Domestic Online Car Rental Market - Direct vs. Indirect Distribution (%), 2002-2012F Canadian Outbound Online Car Rental Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the Canadian Domestic Online Car Rental Market - Direct vs. Indirect Distribution, 2002-2012F Value of the Canadian Outbound Online Car Rental Market - Direct vs. Indirect Distribution, 2002-2012F Value of the North American Gross Rail Market, 2002-2012F North American Rail Market, Domestic vs. Outbound (%), 2002-2012F Value of the North American Rail Market, Domestic vs. Outbound, 2002-2012F Online Penetration of the North American Rail Market, 2002-2012F Value of the North American Online Rail Market, 2002-2012F Online Penetration of the North American Domestic Rail Market, 2002-2012F North American Online Rail Market - US vs. Canada (%), 2002-2012F Value of the North American Rail Market - US vs. Canada, 2002-2012F Value of the North American Online Rail Market - US vs. Canada, 2002-2012F US Rail Market - Domestic vs. Outbound (%), 2002-2012F Value of the US Rail Market - Domestic vs. Outbound, 2002-2012F Online Penetration of the US Rail Market, 2002-2012F Value of the US Rail Market - Online vs. Offline, 2002-2012F Online Penetration of the US Domestic Rail Market, 2002-2012F Canadian Rail Market - Domestic vs. Outbound (%), 2002-2012F Value of the Canadian Rail Market - Domestic vs. Outbound, 2002-2012F Online Penetration of the Canadian Rail Market, 2002-2012F Value of the Canadian Rail Market - Online vs. Offline, 2002-2012F Online Penetration of the Canadian Domestic Rail Market, 2002-2012F Value of the North American Gross Cruise Market, 2002-2012F North American Cruise Market - US vs. Canada (%), 2002-2012F Value of the North American Cruise Market, US vs. Canada, 2002-2012F Online Penetration of the North American Cruise Market, 2002-2012F Value of the North American Online Cruise Market, 2002-2012F Value of the North American Online Cruise Market - US vs. Canada, 2002-2012F North American Online Cruise Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the North American Online Cruise Market - Direct vs. Indirect Distribution, 2002-2012F US Cruise Market - Domestic vs. Outbound (%), 2002-2012F Value of the US Cruise Market - Domestic vs. Outbound, 2002-2012F Cruise Sector Contribution to US Total, Domestic and Outbound Travel Markets, 2002-2012F Online Penetration of the US Cruise Market, 2002-2012F Value of the US Cruise Market - Online vs. Offline, 2002-2012F Online Penetration Comparison of the US Gross, Domestic and Outbound Cruise Market, 2002-2012F US Online Cruise Market - Domestic vs. Outbound (%), 2002-2012F Value of the US Online Cruise Market - Domestic vs. Outbound, 2002-2012F Online Penetration of the US Domestic Cruise Market, 2002-2012F Value of the US Domestic Cruise Market - Online vs. Offline, 2002-2012F Online Penetration of the US Outbound Cruise Market, 2002-2012F Value of the US Outbound Cruise Market - Online vs. Offline, 2002-2012F US Online Cruise Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the US Online Cruise Market - Direct vs. Indirect Distribution, 2002-2012F Value of the US Domestic Online Cruise Market - Direct vs. Indirect Distribution, 2002-2012F

© EyeforTravel Research. All rights reserved.

175 175 176 176 177 177 178 178 180 180 181 181 182 182 183 183 184 185 185 186 186 187 188 188 189 190 190 192 193 193 194 195 195 196 197 198 198 199 199 200 200 201 201 202 202 203 203 203 204 204

Figure 3.5.24: Figure 3.5.25: Figure 3.5.26: Figure 3.5.27: Figure 3.5.28: Figure 3.5.29: Figure 3.5.30: Figure 3.5.31: Figure 3.5.32: Figure 3.5.33: Figure 3.5.34: Figure 3.5.35: Figure 3.5.36: Figure 3.5.37: Figure 3.5.38: Figure 3.6.1: Figure 3.6.2: Figure 3.6.3: Figure 3.6.4: Figure 3.6.5: Figure 3.6.6: Figure 3.6.7: Figure 3.6.8: Figure 3.6.9: Figure 3.6.10: Figure 3.6.11: Figure 3.6.12: Figure 3.6.13: Figure 3.6.14: Figure 3.6.15: Figure 3.6.16: Figure 3.6.17: Figure 3.6.18: Figure 3.6.19: Figure 3.6.20: Figure 3.6.21: Figure 3.7.1: Figure 3.7.2: Figure 3.7.3: Figure 3.7.4: Figure 3.7.5: Figure 3.7.6: Figure 3.7.7: Figure 3.7.8: Figure 3.7.9: Figure 3.7.10: Figure 3.7.11: Figure 3.7.12: Figure 3.7.13: Figure 3.7.14: Figure 3.7.15:

US Domestic Online Cruise Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the US Outbound Online Cruise Market - Direct vs. Indirect Distribution, 2002-2012F US Outbound Online Cruise Market - Direct vs. Indirect Distribution (%), 2002-2012F Canadian Cruise Market - Domestic vs. Outbound (%), 2002-2012F Value of the Canadian Cruise Market - Domestic vs. Outbound, 2002-2012F Online Penetration of the Canadian Cruise Market, 2002-2012F Value of the Canadian Cruise Market - Online vs. Offline, 2002-2012F Canadian Online Cruise Market - Domestic vs. Outbound (%), 2002-2012F Value of the Canadian Online Cruise Market - Domestic vs. Outbound, 2002-2012F Value of the Domestic Canadian Cruise Market - Online vs. Offline, 2002-2012F Value of the Outbound Canadian Cruise Market - Online vs. Offline, 2002-2012F Canadian Online Cruise Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the Canadian Online Cruise Market - Direct vs. Indirect Distribution, 2002-2012F Value of the Canadian Domestic Online Cruise Market - Direct vs. Indirect Distribution, 2002-2012F Value of the Canadian Outbound Online Cruise Market - Direct vs. Indirect Distribution, 2002-2012F Value of the North American Gross Bus Market, 2002-2012F North American Bus Market - US vs. Canada (%), 2002-2012F Value of the North American Bus Market - US vs. Canada, 2002-2012F Online Penetration of the North American Bus Market, 2002-2012F Value of the North American Online Bus Market, 2002-2012F North American Online Bus Market - US vs. Canada (%), 2002-2012F Value of the North American Online Bus Market - US vs. Canada, 2002-2012F US Bus Market - Domestic vs. Outbound (%), 2002-2012F Value of the US Bus Market - Domestic vs. Outbound, 2002-2012F Online Penetration of the US Bus Market, 2002-2012F Value of the US Bus Market - Online vs. Offline, 2002-2012F Online Penetration of the US Domestic Bus Market, 2002-2012F US Online Bus Market - Direct vs. Indirect Distribution (%), 2002-2012F alue of the US Online Bus Market - Direct vs. Indirect Distribution, 2002-2012F Canadian Bus Market - Domestic vs. Outbound (%), 2002-2012F Value of the Canadian Bus Market - Domestic vs. Outbound, 2002-2012F Online Penetration of the Canadian Bus Market, 2002-2012F Value of the Canadian Bus Market, Online vs. Offline, 2002-2012F Online Penetration of the Canadian Domestic Bus Market, 2002-2012F Canadian Online Bus Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the Canadian Online Bus Market - Direct vs. Indirect Distribution, 2002-2012F Value of the North American Gross Package Market, 2002-2012F North American Package Market - Domestic vs. Outbound (%), 2002-2012F Value of the North American Package Market - Domestic vs. Outbound, 2002-2012F North American Package Market - US vs. Canada (%), 2002-2012F Value of the North American Package Market - US vs. Canada, 2002-2012F Online Penetration of the North American Package Market, 2002-2012F Value of the North American Online Package Market, 2002-2012F North American Online Package Market - Domestic vs. Outbound (%), 2002-2012F Value of the North American Online Package Market - Domestic vs. Outbound, 2002-2012F North American Online Package Market - US vs. Canada (%), 2002-2012F Value of the North American Online Package Market - US vs. Canada, 2002-2012F North American Online Package Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the North American Online Package Market - Direct vs. Indirect Distribution, 2002-2012F US Package Market - Package vs. Non-Package Travel (%), 2002-2012F US Package Market - Domestic vs. Outbound (%), 2002-2012F

© EyeforTravel Research. All rights reserved.

List of Figures

North America Online Travel Report 2009

205 205 205 206 207 208 208 209 209 210 210 211 211 212 212 213 213 214 215 215 216 216 217 218 218 219 219 220 220 221 222 223 223 224 225 225 226 226 227 227 228 229 229 230 230 231 231 232 233 233 234

11

List of Figures

Figure 3.7.16: Figure 3.7.17: Figure 3.7.18: Figure 3.7.19: Figure 3.7.20: Figure 3.7.21: Figure 3.7.22: Figure 3.7.23: Figure 3.7.24: Figure 3.7.25: Figure 3.7.26: Figure 3.7.27: Figure 3.7.28: Figure 3.7.29: Figure 3.7.30: Figure 3.7.31: Figure 3.7.32: Figure 3.7.33: Figure 3.7.34: Figure 3.7.35: Figure 3.7.36: Figure 3.7.37: Figure 3.7.38: Figure 3.7.39: Figure 3.7.40: Figure 3.7.41: Figure 3.7.42: Figure 3.7.43: Figure 3.7.44: Figure 3.7.45: Figure 3.7.46: Figure 4.1: Figure 4.2: Figure 4.3: Figure 4.4: Figure 4.5: Figure 4.6: Figure 4.7: Figure 4.8: Figure 4.9: Figure 4.10: Figure 4.11: Figure 4.12: Figure 4.13:

12

Value of the US Package Market - Domestic vs. Outbound, 2002-2012F Online Penetration of the US Package Market, 2002-2012F Value of the US Package Market - Online vs. Offline, 2002-2012F US Online Package Market - Domestic vs. Outbound (%), 2002-2012F Value of the US Online Package Market - Domestic vs. Outbound, 2002-2012F Online Penetration of the US Domestic Package Market, 2002-2012F Value of the US Domestic Online Package Market - Online vs. Offline, 2002-2012F Online Penetration of the US Outbound Package Market, 2002-2012F Value of the US Outbound Online Package Market - Online vs. Offline, 2002-2012F US Package Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the US Package Market - Direct vs. Indirect Distribution, 2002-2012F US Domestic Package Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the US Domestic Package Market - Direct vs. Indirect Distribution, 2002-2012F US Outbound Package Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the US Outbound Package Market - Direct vs. Indirect Distribution, 2002-2012F Canadian Package Market - Domestic vs. Outbound (%), 2002-2012F Value of the Canadian Package Market - Domestic vs. Outbound, 2002-2012F Online Penetration of the Canadian Package Market, 2002-2012F Value of the Canadian Package Market - Online vs. Offline, 2002-2012F Canadian Online Package Market - Domestic vs. Outbound (%), 2002-2012F Value of the Canadian Online Package Market - Domestic vs. Outbound, 2002-2012F Online Penetration of the Canadian Domestic Package Market, 2002-2012F Online Penetration of the Canadian Outbound Package Market, 2002-2012F Value of the Canadian Domestic Package Market - Online vs. Offline, 2002-2012F Value of the Canadian Outbound Package Market - Online vs. Offline, 2002-2012F Canadian Online Package Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the Canadian Online Package Market - Direct vs. Indirect Distribution, 2002-2012F Canadian Domestic Online Package Market - Direct vs. Indirect Distribution (%), 2002-2012F Canadian Outbound Online Package Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the Canadian Domestic Online Package Market - Direct vs. Indirect Distribution, 2002-2012F Value of the Canadian Outbound Online Package Market - Direct vs. Indirect Distribution, 2002-2012F North American Online Travel Market - Direct vs. Indirect Distribution (%), 2002-2012F Value of the North American Online Travel Market - Direct vs. Indirect Distribution, 2002-2012F Value of the North American Online Travel Market Sector Breakdown (US$ million) - Direct vs. Indirect, 2008 North American Online Travel Agent Market - Sector Breakdown (%), 2002-2012F Value of the North American Online Travel Agent Market - Sector Breakdown, 2002-2012F US Online Travel Market - Direct vs. Indirect, 2002-2012F Canadian Online Travel Market - Direct vs. Indirect, 2002-2012F North American Online Airline Market - Direct vs. Indirect as % and value, 2002-2012F North American Online Hotel Market - Direct vs. Indirect as % and value, 2002-2012F North American Online Car Rental Market - Direct vs. Indirect as % and value, 2002-2012F North American Online Bus Market - Direct vs. Indirect as % and value, 2002-2012F North American Online Cruise Market - Direct vs. Indirect as % and value, 20022012F North American Online Rail Market - Direct vs. Indirect as % and value, 2002-2012F

© EyeforTravel Research. All rights reserved.

234 235 236 237 237 238 238 239 239 240 240 241 241 241 242 243 244 245 245 246 246 247 247 248 248 249 249 250 250 251 251 253 253 254 255 255 256 256 257 257 258 258 258 259

Figure 4.14: Figure 4.15: Figure 4.16: Figure 4.17: Figure 4.18: Figure 4.19: Figure 4.20: Figure 4.21: Figure 4.22: Figure 4.23: Figure 4.24: Figure 4.25: Figure 4.26: Figure 4.27: Figure 4.28: Figure 4.29: Figure 4.30: Figure 4.31: Figure 4.32: Figure 4.33: Figure 4.34: Figure 4.35: Figure 4.36: Figure 4.37: Figure 4.38: Figure 4.39: Figure 4.40: Figure 4.41: Figure 4.42: Figure 4.43: Figure 4.44: Figure 4.45: Figure 4.46: Figure 4.47: Figure 4.48:

North American Online Package Market - Direct vs. Indirect as % and value, 20022012F Value of the US Online Travel Market - Direct vs. Indirect Distribution, 2002-2012F Value of the US Online Travel Market Sector Breakdown (US$ million) Direct vs. Indirect, 2008 US Online Travel Agent Market Sector Breakdown (%), 2008 US Domestic Online Travel Market - Direct vs. Indirect (%), 2002-2012F Value of the US Domestic Online Travel Market - Direct vs. Indirect, 2002-2012F US Outbound Online Travel Market - Direct vs. Indirect (%), 2002-2012F Value of the US Outbound Online Travel Market - Direct vs. Indirect, 2002-2012F Indirect US Online Airline Market - Domestic vs. Outbound (%), 2002-2012F Value of the Indirect US Online Airline Market - Domestic vs. Outbound, 20022012F Indirect US Online Hotel Market - Domestic vs. Outbound (%), 2002-2012F Value of the Indirect US Online Hotel Market - Domestic vs. Outbound, 2002-2012F Indirect US Online Car Rental Market - Domestic vs. Outbound (%), 2002-2012F Value of the Indirect US Online Car Rental Market - Domestic vs. Outbound, 20022012F Indirect US Online Cruise Market - Domestic vs. Outbound (%), 2002-2012F Value of the Indirect US Online Cruise Market - Domestic vs. Outbound, 2002-2012F Indirect US Online Package Market - Domestic vs. Outbound (%), 2002-2012F Value of the Indirect US Online Package Market - Domestic vs. Outbound, 20022012F Value of the Canadian Online Travel Market - Direct vs. Indirect Distribution, 20022012F Value of the Canadian Online Travel Market Sector Breakdown (US$ million) - Direct vs. Indirect, 2008 Canadian Online Travel Agent Market Sector Breakdown (%), 2008 Canadian Domestic Online Travel Market - Direct vs. Indirect (%), 2002-2012F Canadian Domestic Online Travel Market Y-o-Y Growth, Direct vs. Indirect, 20022012F Canadian Outbound Online Travel Market - Direct vs. Indirect (%), 2002-2012F Canadian Domestic Online Travel Market Y-o-Y Growth - Direct vs. Indirect, 20022012F Indirect Canadian Online Airline Market - Domestic vs. Outbound (%), 2002-2012F Value of the Indirect Canadian Online Airline Market - Domestic vs. Outbound, 20022012F Indirect Canadian Online Hotel Market - Domestic vs. Outbound (%), 2002-2012F Value of the Indirect Canadian Online Hotel Market - Domestic vs. Outbound, 20022012F Indirect Canadian Online Car Rental Market - Domestic vs. Outbound (%), 20022012F Value of the Indirect Canadian Online Car Rental Market - Domestic vs. Outbound, 2002-2012F Indirect Canadian Online Cruise Market - Domestic vs. Outbound (%), 2002-2012F Value of the Indirect Canadian Online Cruise Market - Domestic vs. Outbound, 20022012F Indirect Canadian Online Package Market - Domestic vs. Outbound (%), 2002-2012F Value of the Indirect Canadian Online Package Market - Domestic vs. Outbound, 2002-2012F

© EyeforTravel Research. All rights reserved.

List of Figures

North America Online Travel Report 2009

259 260 261 261 263 263 264 264 265 265 266 266 267 267 268 268 269 269 270 271 271 273 273 273 274 275 275 276 277 277 278 279 279 280 280

13

18

© EyeforTravel Research. All rights reserved.

Executive Summary

North America Online Travel Report 2009

Executive Summary > North American Travel Market Overview 2009 to be the first year this decade that a decline in travel expenditure is expected in the region The value of the North American travel market reached an estimated US$389,376 million in 2008 and a further 16% increase in volume is expect by 2012, but growth has slowed. 2009 is expected to be the first year this decade for a decline in the total value of travel expenditure and we forecast a recovery in 2010. Fastest growth in Hotel and Cruise sectors Airlines continue to account for the largest proportion of travel spend, followed by Hotels. In 2008 these sectors accounted for 35% and 25% of the total market respectively. Fastest growth has been in the Hotel and Cruise sectors. Online penetration of North American travel market reaches 35% Distribution trends within the North American market reveal some particularly interesting patterns. Whilst offline channels continue to account for the majority of travel spend online channel have been rapidly gaining share. In 2008 the online penetration of the North American travel market reached about 35% of the value. By 2012 we are expecting almost half of travel expenditure to be online. Growth rates of the online channel are expected to be lower than previous years but between 2008 and 2012 a total growth in value of almost 50% is forecast. The online travel market by 2012 is predicted to reach a value of US$201,382 million. That is an additional US$57,498 million annually to be circulated online by the end of 2012. All growth is online While the gross travel market experiences a relatively stagnant period, amongst this, the online travel market is showing very healthy growth and continuing to erode offline share. This illustrates the growing importance of online channels and the resilience to the economic downturn. The Airline sector dominates the online travel market (56%) and online expenditure on Airline products reached US$75,964 million in 2008. The value of the online travel market is forecast to grow in value by 44% between 2008 and 2012. The Hotel sector accounts for 32% of the total online travel market and US$42,831 million in 2008. Growth by 2012 is forecast to be up by a value of over 50%. The Car Rental sector is the next largest sector accounting for 7.7% and a value of US$10,389 million (2008).

© EyeforTravel Research. All rights reserved.

19

Executive Summary

Growth in the value of the outbound travel market has been higher than the domestic travel market, but in 2009 a decline of 4.8% is expected in the outbound market for the first time. Good recovery is forecast for 2010. Domestic travel accounts for around 64% of the total online travel market and outbound 36%. Outbound travel products for North American consumers have performed well online and increased in share from 28% in 2002. From 2010 we expect grow in both domestic and outbound online markets to hit double digit figures again. Canada increases it significance in the North American travel market but US spend more per trip Canadian travellers accounted for 9.4% of total North American travel trips in 2002 and by 2012 we expect this to increase to 11.3%. Canada has out performed the US from a volume growth perspective. Canada is expected to grow by 1.8% in 2009, while the US experiences a decline of around 1%. In value terms, the US contributes 90% to the North American market and this is expected to remain relatively consistent during the review period in this report. US travellers have a higher spend per trip than Canadian travellers. US online travel market valued at US$123,346 million in 2008 The US accounts for 91% of the total North American online travel market. The US online travel market reached an estimated value of US$123,346 million in 2008 and Canada US$12,252 million (CAD $12,869 million). The US online market is slightly more advanced than Canada but penetration is relatively similar. 35.2% of US travel expenditure was online in 2008 against a 31.5% penetration for Canada. By 2012 we forecast 44.8% of all US travel expenditure to be online and 42% of Canadian. A continuously changing travel distribution landscape The contrast between the performances of online and offline channels is enormous. Online channels have been remarkably productive and growth rates have remained in double digit figures for every year reviewed in the report – with the exception of 2009 when annual growth is expected to fall to a level of 6.3% (still well above growth levels for the offline market for the entire period). Put alongside offline productivity, the 5.2% decline in the offline market for 2009 makes a very strong statement. The online channels certainly now seem strong despite times of instability. US outbound travel market is growing Just under 70% of US travel expenditure is currently on domestic travel. Outbound travel is growing well and at higher rates than the more mature domestic market. 2009 is however expected to result in an estimated 4.8% decline. Mexico and Canada are receiving the most outbound travellers, followed by the UK. Growth has been strongest in Germany

20

© EyeforTravel Research. All rights reserved.

Executive Summary

North America Online Travel Report 2009

and Japan. A slightly higher proportion of domestic travel is bought online in comparison to outbound travel, but only marginally. Canadian travel market reaches US$38,869 million (CAD $40,825 million) in 2008 By 2012 the Canadian travel market is expected to be 73% larger in size than it was in 2002. The Canadian market is very different from the US in that outbound travel accounts for the majority of the Canadian travel market. In 2008 outbound travel contributed around 67% to the total Canadian travel market. Annual growth has generally been higher for outbound travel and a 5.5% CAGR is expected for the 2007-2012 review period. Canadian online travel market valued at US$1,986 million (2008) Online channels are also becoming increasingly significant for the Canadian travel market. Online penetration has jumped from 11% in 2002 to around 32% in 2008. Growth is expected to slow but continue to expand and penetrate around 42% of the market by 2012. The online travel market is divided fairly evenly between domestic and outbound markets, despite the domination of the outbound segment in the gross market. The domestic market has a higher online penetration and when in 2012 we forecast that 60% of domestic travel will be purchased online, 33% of the outbound segment will be online. Growth online for both has been remarkable though. Airline products make up a significant 61% of the Canadian online travel market and the data reveals that there is a lot of room for growth for some of the travel sectors. > Airline Sector Airline sector to continue to grow in size through 2009 The North American Airline market reached a value of US$136,638 million in 2008 and growth is expected to slow but remain positive in the next few years. The domestic market accounts for the majority of the North American Airline sector but only marginally. The Canadian travel market has increased its share of the total North American airline market and accounted for around 12% in 2008, up from 7.7% in 2002. LCCs are growing their share in both markets and in the US reached about one third in 2008. During ten year period to 2012, Canadian Airline market to double in size In 2008 the Canadian Airline market reaches a value of US$16,548 million (CAD $17,381 million). The Airline sector accounts for around 43% of total Canadian travel market. Outbound travel dominates and accounts for 74% of the total Canadian Airline market (2008). Growth is expected to be lower in 2009 but still positive. Traditional airlines make up the majority of the market and recently regained some lost share. Following stronger growth from Traditional Airlines in 2002-2007, the reverse picture is predicted for the upcoming period and LCCs are forecast to grow at higher rates in the 2007-2012 period. The Traditional segment experienced a 4.8% decline in 2008.

© EyeforTravel Research. All rights reserved.

21

Executive Summary

Growth of online Airline market remarkable Online channels have played a major part in the distribution of Airline products to North American travel consumers. Online penetration in the North American Airline market has reached 56% and expected to expand further to around 68% by 2012. The Airline sector accounts for over half of the total North American online travel market. Online penetration of US airline market increased to 54% in 2008 which was a value of US$68,490 million. The convergence of offline/online distribution occurred in 2006/07 and in 2009 we expect 60% of US airline expenditure to be on online, growing to about 70% by 2012. Online penetration is marginally higher in the domestic market to the outbound airline market. Online penetration in the Canadian market is 20% lower than the US In 2008, approximately 45% of the expenditure on Airline products by Canadian consumers was online. This is forecast to jump to 49% in 2009. Online channels will continue to grow in significance. In the Canadian market, negative growth in offline channels is calculated for most years under review and so there is certainly an increasing importance towards online channels. Online penetration rates for domestic/outbound is significantly different – 77% of domestic Airlie product expenditure is online and 34% of outbound (2008). Growth online for both sub-sectors (Traditional and LCC) are expected to withstand the pressures from the current economic climate and power forward to reach record levels. Online expenditure outweighs offline expenditure in the outbound Airline market for the first time in 2008 Growth in outbound Airline expenditure by North American consumers via online channels has been significant at a 26.3% CAGR (2002-2007) against a -3.1% CAGR for the value of offline channels. In 2008 online expenditure on outbound Airline products outweighed the offline expenditure for first time when online penetration reached 53.2%. With this pattern continuing, by 2012 we expect the online penetration of the outbound segment to reach 66.3%. Direct distribution constantly growing within US and Canadian online Airline markets In 2009 approximately 66% of online expenditure by US consumers was Direct with suppliers. This trend is expected to continue. OTAs are still playing a vital part in the travel supply chain and generated US$45,141 million in 2008 (34% of market). OTAs have a higher penetration in the outbound airline segment – 10% more. The role of OTAs in the Canadian online Airline sector has declined and direct bookings reached US$5,818 million (CAD $6,110 million) in 2008. During the 2002-2007 review period, Direct distribution grew at a 37.1% CAGR and by 2012 we forecast 82% of expenditure to be Direct. OTAs have held their share of the outbound market better than

22

© EyeforTravel Research. All rights reserved.

Executive Summary

North America Online Travel Report 2009

the domestic market and in value terms growth of indirect channels for outbound market has been more impressive.

> Hotel Sector Dip in the North American Hotel market forecast for 2009 The North American Hotel market reached an estimated US$97,751 million in 2008, up 4.2% from 2007. Despite dip in 2009 (-3.6%), the Hotel market is reported to have performed well and by 2012 we expect the size to almost double from 2002 levels. Positive growth is expected to return again in 2010 and annual growth of around 7% is expected for the next three years. US and Canadian Hotel markets expected to experience a decline – but in different years The US Hotel market has reported slightly higher rates of growth than the Canadian market during the full review period of this report. Both markets are expected to take a hit from economic pressures but the Canadian market registered a 2.5% decline in 2008 when the US increased by 5.8%. Then when the Canadian market returns to positive growth with a 1.8% increase forecast in 2009, the US is expected to decline by 3.4%. By 2010 both markets are forecast to pick up and growth between 6% and 8% is expected. US outbound Hotel market feeling the impact US consumers have increased their expenditure on Hotel products consistently during the review period and the sector share of the total US travel market has also increased. The value of the US Hotel market reached an estimated US$87,958 million in 2008, up 5.6% from 2007, but a 3.4% decline is expected for 2009. Growth is higher in the outbound market in comparison to the domestic market for all years under review except 2008 and 2009. Canadian domestic Hotel market took a bigger hit in 2008 The Canadian Hotel market accounts for about quarter of Canadian travel market. The market valued reached an estimated US$9,793 million in 2008 (CAD$10,285 million). This represents a 2.5% decline from 2007 but growth is expected to return in 2009 at 1.8%. The Hotel market is divided fairly evenly between the domestic and outbound Hotel segments (outbound was around 52% in 2008). The decline of the Hotel market in 2008 included a larger decline for the domestic segment. North American consumers buy more and more Hotel products online Online penetration rates of the Hotel market are slightly below the Airline sector, but relative to all other Travel sectors, the online Hotel market has performed very well. The

© EyeforTravel Research. All rights reserved.

23

Executive Summary

growing confidence of North American consumers is clearly reflected in the figures. Growth of the online Hotel market has been at a 25.3% CAGR (2002-2007) and although it is expected to slow we forecast double digit rates. Whilst the online Hotel market is predicted to be impacted by economic pressures and forecast to record the lowest actual growth rate in the review period in 2009 (annual growth of 3.7%) we do continue to see growth. By 2010 growth is expected to return to a healthy level of 14.8% and maintained above 13% for the following 2 years. Largest plunge yet for the offline US Hotel market (-9%) expected in 2009 The expansion of online hotel market been impressive in the US market. The offline Hotel market is expected to take a large plunge in 2009. Growth is accounted for by online channels and although growth online is expected to slow from previous years, a 3.5% annual increase is predicted nonetheless. Online channels increasingly vital in any Hotel distribution strategy targeting the region but maintaining the efficiency and integration of both channels remains important Growth in online expenditure has been double the growth of offline channels. The Hotel market is a significant sector online, accounting for around one third of the total North American online travel market. Outbound Hotels have performed particularly well in recent years and in 2008 made up around 27% of the total online Hotel market. Online/Offline gap for US Hotel market forecast to close by 2010 In 2008, 44.6% of the total expenditure by US travellers on Hotel products was online. This equated to a value of US$39,268 million, an increase of 13.7% from 2007. In 2010 we forecast the online penetration to exceed the 50% mark. It is very clear from the data that growth online has well exceeded growth offline. During 2002-2007 the offline market edged up at a 2.7% CAGR when the online market grew at a 24% CAGR. In the 2007-2012 review period, all growth is expected to be online as offline is predicted to experience a -2% CAGR. Canadian online Hotel market growing faster than the US – but sizes very different The Online Canadian Hotel market has grown relatively faster than the US but understandably values are very different due to the sheer size of the US market. The US online Hotel market was valued at an estimated US$39,268 million in 2008 and Canada US$3,563 million (CAD $3,742 million). Actual growth rates are expected to be higher for Canada. Online penetration soars in the Canadian Hotel market The online penetration in the Canadian Hotel market has continuously increased. In 2008 penetration reached 36.3%, a significant shift from 10% in 2002. During 2002-2007 the

24

© EyeforTravel Research. All rights reserved.

Executive Summary

North America Online Travel Report 2009

offline market displayed basically stagnant growth rates with a 0% CAGR and against this the online market grew at a 32.5% CAGR. In 2008 the only decline was accounted for by the offline channels with an 8.4% fall in value when the online market increased in value by almost 10%. Further decreases in the value of the offline market are expected. Online penetration rates are similar in the domestic and outbound segments, just slightly higher for the domestic market but values are almost equal. Positive growth is expected throughout 2009 and forecast annual growth of 13% for both segments. US outbound online Hotel market has grown five times the size during the 5 years to 2008 The US outbound online Hotel market has grown faster than the domestic market. The cross over point between online/offline distribution will arrive sooner for the outbound segment (in 2009) and this is particularly interesting having started at lower levels than the domestic market. Rapid growth has led to an expected 50.2% online penetration in 2009. The domestic market is forecast to catch up in 2010. Higher overall average growth is also expected for the outbound segment going forward, except 2009 when a decline of 4.3% expected. The domestic market has, however, not been static and has expanded to three times the size. OTAs lose share of the US Hotel market but gain good value US travel consumers make relatively good use of OTAs when purchasing Hotel products. In 2008 43% of expenditure was Indirect. The OTA share of the Hotel market has declined with Direct to consumer distribution strengthening, but OTAs are expected to hold a pretty good share. The value of Direct distribution grew at a 29.8% CAGR (2002-2007) and Indirect distribution grew at an 18.3% CAGR. Although OTAs have lost market share, their value has increased enormously, particularly for the outbound segment. Clear move towards Direct Hotel channels by Canadian consumers OTAs had good hold in the Canadian market in 2002 at around 54%. In 2008 there has been a shift in online distribution and 65% of expenditure went via Direct channels. The value of expenditure via Direct channels grew at a significant 41.7% CAGR (2002-2007) and although OTAs are losing market share the value of the Indirect market grew at a notable 22.8% CAGR as well. OTAs have held their share better in the outbound product segment.

> Car Rental Sector North American Car Rental market reaches US$26,282 million in 2008 The Car Rental sector accounts for around 6.8% of total North American travel market (2008), which is an estimated value of US$26,282 million and an increase of 1.6% on 2007. In 2009 a further 1.7% growth is forecast and a 3.5% CAGR for the 2007-2012

© EyeforTravel Research. All rights reserved.

25

Executive Summary

review period. The domestic market dominates at about 63%. The US market generated US$24,553 million in 2008 after modest growth of a 4.3% CAGR (2002-2007). The Canadian market generated US$1,880 million (CAD $1,896 million) in 2008 after a slightly higher growth of a 7.2% CAGR (2002-2007). In Canada the outbound market accounts for the majority whereas in the US the domestic market dominates. Online penetration of Car Rental market behind Airline and Hotel sectors Online distribution in the North American Car Rental market has increased but remains behind the Airline and Hotel developments. In 2008 online expenditure was around 39% for Car Rental and a value of US$11,157 million, this was an increase of 9% from 2007. By 2012 the sector is expected to reach the half way mark between online/offline distribution. Growth has been good with a 20.3% CAGR during 2002-2007 and although expected to slow in the upcoming period we forecast a 9.5% CAGR (2007-2012). Growth is expected to be particularly lower in 2009 but double digit growth forecast from 2010. Online growth for US Car Rental market drops for 2008/09 but still very positive Online penetration of the US Car Rental market reached 40% in 2008 and in fact most growth in the market has been online. During 2002-2007 the online market grew at a 19.4% CAGR and offline experienced an almost 1% decline. Similar trends are forecast for the latter review period. Besides 2008/09 online growth is recorded in double digit figures but in 2009 it is still expected to grow by 7.6% online. The US Car Rental market accounts for around 93% of the total North American online Car Rental market and reached a value of US$9,767 million in 2008 which was an increase from US$3,684 million in 2002. Annual growth in the US appears to be more erratic. Online penetration is higher in the US domestic market for Car Rental. Offline channels for the Canadian Car Rental market started weakening around 2007/08 The Canadian online Car Rental market reached an estimated value of US$622 million (CAD$653 million) in 2008 after a 30% CAGR during 2002-2007. which from US$99 million (CAD $155 million) showed slightly higher growth rates than the US. Online penetration in the Canadian Car Rental market reached 33% in 2008. The online market is forecast to grow in double digit figures for the upcoming period and a 14.3% CAGR is forecast. For Canada, online penetration is slightly higher in the outbound segment in comparison to the domestic segment. Direct online distribution dominates the Car Rental market Direct online distribution dominates the online Car Rental market in both markets and the proportion has increased. In 2008 66% was Direct in the US market. As with some other sectors, the OTAs have held their share better in the outbound market. In 2008 the Indirect Car Rental market in the domestic segment declined for the first time by 2.7%.

26

© EyeforTravel Research. All rights reserved.

Executive Summary

North America Online Travel Report 2009

Growth in the value is expected to pick up again in 2009 but higher growth is expected from Direct channels. Direct online distribution accounts for the majority of sales in the Canadian market as well.

> Rail Sector North American Rail market forecast to fall 5.1% in 2009 The Rail sector is a smaller part of the North American travel market and generated US$3,162 million in 2008. A decline of 5.1% is expected for 2009 and growth to return again in 2010. The Rail market is evenly split between domestic and outbound segments. Online Rail penetration low but shown good growth Online penetration of the Rail sector reached 22.3% in 2008. The online market is entirely accounted for by the domestic segment. The US market generated US$2,871 million in 2008 and the Canadian market US$290 million (CAD $305 million). All the online distribution of Rail products (not as part of packages) is considered Direct. > Cruise Sector 3.5% decline in the value of the North American Cruise market forecast for 2009 The Cruise sector makes up around 3% of the North American travel market. The value of the sector reached US$12,732 million in 2008 which was an increase of 1.2% on 2007. The growth of the Cruise sector has been relatively high in comparison to other sectors, but growth has slowed since 2007, and in 2009 a 3.4% decline is forecast. Canada has increased its significance in the North American Cruise market and grown its share from 2.2% in 2002 to 6.8% in 2008. Canada has therefore grown faster than the US but from smaller base numbers. For Canada specifically, the Cruise market has left a very positive period of growth for a short while and there was a 1.7% decline in 2008. The US is also expected to decline in 2009 by 2.8%. Online North American Cruise market to double in size by 2012 Online Cruise distribution is in its infancy when put along side other online travel sectors. The penetration has, however, grown from 4.1% in 2002 to 11.3% in 2008 and is expected to reach around 19% by 2012. The online/offline gap is therefore expected to remain to be wide. Nevertheless, although from small base numbers, very strong online growth rates have been reported and a 29.3% CAGR calculated for the 2002-2007 period. Between 2008 and 2012 we forecast the online Cruise market to double in size.

© EyeforTravel Research. All rights reserved.

27

Executive Summary

Canadian Cruise consumers enter the online marketplace In the past, all online North American Cruise revenue has been solely generated by US consumers. Until 2008, Canadian’s purchased all their Cruise products offline, but movement is now being seen in the Canadian online market. OTAs driven online Cruise market OTAs have really driven the development of online Cruise market in the entire region and generate about 94% of the online Cruise revenue. As with other sectors, Direct distribution is gradually increasing and this trend is expected to continue, however OTAs will continue to dominate. > Bus Sector Not huge movement reported in the Bus market The share of the Bus sector in the North American region is around 3% (2008), declining its share by approximately 1% during the review period. The value of the sector was valued at an estimated US$10,702 million in 2008 and although the Bus market has marginally grown in value, the total expenditure on Bus products has remained largely unchanged. Online channels generate less than 6% of gross Bus revenue Online revenues are lower in comparison to other sectors and 5.8% of Bus products were purchased online in 2008. By 2012 this is forecast to increase to just over 10%. The value of the online travel market in 2008 reached US$624 million. Direct channels have led the development of the online Bus market but OTAs are beginning to play a role.

> Package Sector Significant room for growth online in the Package market The Package sector accounts for about one quarter of the North American travel market (2008) and a value of US$101,979 million. In 2009 we are expecting a 3.9% decline in the value of the market but expect recovery by 2010. We highlight the need for developments in the online space within this sector. Online penetration in 2008 was 2.1%, up from 1% in 2002. By 2012 we do not forecast much movement and expect just 3% to be online by 2012. Direct distribution dominates the online marketplace for Packages but OTAs are expected to start to become more significant from 2009.

28

© EyeforTravel Research. All rights reserved.

Executive Summary

North America Online Travel Report 2009

> Online Travel Agents Landscape Revenue from Direct distribution to the North American market growing in most sectors Increasing Direct distribution has become the trend for most travel sectors in the North American market. OTAs have as a result gradually lost their share of the online market. In 2002 OTAs generated around 47% of online revenue from North American travel consumers and in 2008 this reduced to 35%. By 2012 this is expected to reduce further to 31%. In value terms, the Indirect market has grown in size alongside growing online markets in general and a 17.5% CAGR was calculated for the 2002-2007 review period. In 2008 the value of the Indirect market reached US$47,841 million. So growth has been healthy for the OTA sector but we do forecast the biggest dip for the market in 2009; 1.9% growth is expected for the Indirect market and 8.4% growth for Direct channels. In 2010 we expect to see good growth return and forecast a 9% growth for that year. Airline products dominate OTA revenue Airline products make up the majority of OTA revenue and accounted for around 52% in 2008. This is largely accounted for the sheer size of the online Airline market. Hotel products are also very dominant. Expenditure on Bus, Rail and Package products is mainly channelled direct to suppliers. Nevertheless, these sectors have edged up their share in OTA revenues marginally and have as a consequence eroded some of the Airline share. The share of OTAs in the Canadian market is more pronounced that in the US. In 2008 25% of the Canadian online market was Indirect and 36% of the US market.

© EyeforTravel Research. All rights reserved.

29

30

© EyeforTravel Research. All rights reserved.