PhoCusWright and Compete suggest travel supplier and other online travel sites are bucking the broader travel industry downturn, but can travel affiliates claim the same?   According to the just published Online Traffic and Conversion Report, a new study conducted by PhoCusWright (PCW) in partnership with Compete Inc., transactional website monthly traffic and conversion rates are up in almost all travel categories in the second quarter of 2009, compared to the same quarter of previous years.

In the press release announcing the study, PhoCusWright cites several statistics which show that travel suppliers achieved strong year-over-year growth, while online travel agencies (OTAs) experienced a more patchy performance.

For example, PCW estimates monthly visitors to cruise line websites is up a whopping 19%, while hotel chains saw a 13% jump in traffic (or monthly unique visitors).  OTAs, on the other hand, showed a “…slight increases in hotel and car rental visitor volume in the first half of 2009 compared to 2008 and 2007,” while the OTA air category was “… the only category to show a decline in traffic from 2008 through 2009, was down 15%.”  PhoCusWright pointed out, however, that this latter statistic was not reflective of a “weak [OTA] performance,” as OTA air conversions “…increased significantly over the same period of time.”

With respect to the conversion dynamic, ‘looker to booker’ conversion rates (which PCW defines as the percentage of monthly unique visitors who complete a transaction within the month) varied widely both among travel suppliers and in comparison to OTAs.  For example, they note that in 2009, car rental suppliers converted 19.7% of all their shoppers, while cruise lines achieved a dismal 0.2% conversion rate.  PCW also points out that, in general, travel suppliers achieved a higher conversion rate that OTAs, although PCW admits that “…OTA conversion levels show a general upward trend in 2009.”

Commenting on the study’s conclusions and recommendations in the accompanying press release, Carroll Rheem, Director, Research at PhoCusWright says: “The reliance that consumers have on travel Web sites has not weakened one bit…Online channels are attracting, engaging and inspiring travelers who recognize that this year is actually a fantastic time to take a trip. Consumers are certainly spending less, but they are not giving up travel, nor are they turning away from the Web sites that offer them the selection and convenience they value.”

Rheem goes on to say that “The online travel ecosystem now supports a diverse variety of transactional and informational sites-each playing a role in how consumers research, shop for and purchase travel.”  TravelDividends assumes that PhoCusWright and Compete include travel affiliates within the online travel ecosystem, particularly as she goes on to state that “Understanding the intricate relationships that connect all travel sites is essential to setting the right strategic path.”

We wholeheartedly agree with Rheem’s last point, particularly as it relates to the ‘strategic path’ taken by those travel suppliers that offer travel affiliate programs and the many travel affiliates that work symbiotically with these travel vendors.  Arguably, travel is the most competitive segment in the online space, and to remain viable, let alone successful, travel companies (whether they are travel suppliers, travel retailers or travel affiliates) have to be at the cutting edge of creativity, ingenuity and innovation.

In our view, travel affiliates and travel suppliers need to understand each other’s competencies, complement the other in terms of skill sets or capabilities where necessary, and assure there is alignment in terms of mutual vision as well as business objectives.  If travel affiliates and travel suppliers get these key success factors right, they’re a cinch to make smart and efficient online ad placement, marketing and partnership decisions. Lacking these, it’s a ‘path’ that ultimately leads to failure.

What are your thoughts on PhoCusWright’s and Compete’s latest survey?  How has your travel affiliate program performed this year…better, about the same or worse than last year?  If you are a travel affiliate, what would you suggest your travel supplier partners do to make their travel affiliate programs more successful?  Likewise, as a travel supplier, how can travel affiliates improve their performance with respect to your travel affiliate programs?

You can post a comment or send us an email with your thoughts and suggestion. As always, TravelDividends appreciate your feedback.

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