11 October 2012

A PhoCusWright Presentation

(Im)Maturity & Mayhem

The Online Travel Landscape
Abacus International Conference 2012 Seoul

Douglas Quinby Senior Director, Research

When the Economy Stumbles So Too Does Online Travel

2009
U.S. GDP U.S. Travel Market (Industry Revenues) U.S. Online Travel

-3.50% -5%

-15%

Source: PhoCusWrights U.S. Online Travel Overview Eleventh Edition; World Bank
2012 PhoCusWright Inc. All Rights Reserved. 4

The Partys Over

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But Not in APAC

Still Party Time in APAC for Online Travel

2009
APAC Total Travel Market APAC Online Travel Market 12%

-5%
Source: PhoCusWrights Asia Pacific Online Travel Overview, Fifth Edition September, 2012
2012 PhoCusWright Inc. All Rights Reserved. 7

Agenda Asia Pacific in Perspective Merchandizing and retailing Social Mobile

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Total Travel Market Gross Bookings (US$B) by Region, 2009 & 2012
350 300 250 200 150
100 2009 2012

50 Europe U.S. Asia Pacific Eastern Europe Latin America

Note: 2012-2013 projected. Source: PhoCusWright's Global Online Travel Overview; PhoCusWright's Asia Pacific Online Travel Overview Fifth Edition; PhoCusWrights Eastern Europe Online Travel Overview, July 2012
2012 PhoCusWright Inc. All Rights Reserved. 9

Total Travel Market Gross Bookings (US$B) by Region, 2009 & 2012
350 300 250 200 150
100 2009 2012

Online Travel Market

50 Europe U.S. Asia Pacific Eastern Europe Latin America

Note: 2012 projected. Source: PhoCusWright Inc. 2012 PhoCusWright Inc. All Rights Reserved. 10

Online Penetration of Total Travel Market by Region, 2006-2013

U.S. 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 2006 2007 2008 2009 2010 2011 2012 2013 Europe Asia

Source: PhoCusWrights Asia Pacific Online Travel Overview Fifth Edition, September 2012
2012 PhoCusWright Inc. All Rights Reserved. 11

Asia Pacific Total and Online Leisure/Unmanaged Business Travel Market Annual Change, 2009-2013
Online Growth 35% 30% 25%
20%

Total Market Growth

15% 10% 5% 0% -5% -10% 2009 2010 2011 2012 2013

Source: PhoCusWrights Asia Pacific Online Travel Overview Fifth Edition, September 2012
2012 PhoCusWright Inc. All Rights Reserved. 12

Online Penetration Across Asia Pacific, 2012

50% 40% 30% 20% 10% 0% U.S. ANZ India Japan Southeast Asia China 42% 39%

34%

32% 22% 13%

Source: PhoCusWrights Asia Pacific Online Travel Overview Fifth Edition, September 2012
2012 PhoCusWright Inc. All Rights Reserved. 14

Retailing & Merchandizing

Mobile Social

Data, Data, Data! Personalization

2012 PhoCusWright Inc. All Rights Reserved.

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Retailing Unleashed

How do you grow in a no-growth environment?

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Travelers Posted Some 1.5 Million Reviews of U.S. Chain Properties in 2011
200 180 160 140 120 100 80 60 40 20 0 75% more in 2011 vs. 2008 Review Volume (000s) Room Demand (M)

Source: Smith Travel Research, Circos Brand Karma and PhoCusWrights Social Media in Travel 2012
2012 PhoCusWright Inc. All Rights Reserved. 20

Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov

2008

2009

2010

2011

Share of Online Reviews by OTAs and Traveler Review Sites, 2008 & 2011

29% 47%

71% 53%

2008 OTAs

2011 Traveler Review Sites

Source: Circos Brand Karma and PhoCusWrights Social Media in Travel 2012
2012 PhoCusWright Inc. All Rights Reserved. 21

Two sets of traveler reviews and aggregate scores!

Using data streams to drive customer urgency

Analytics

Image Sources: ClearTrip MakeMyTrip

Social (Is Not a Trend)

Even Grandma Is on Facebook

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Interest in Travel Activities Through Social Networks by Market

Share my travel experiences Plan trips with my friends/family Get advice from friends about travel products
Keep up with travel companies

I have no interest in using social networks for travel-related activities 0%

U.S. U.K.

10%

20%
India

30%
Russia

40%
Brazil

50%

60%

Germany

Question: Please select the travel -related activities you do or interested in doing through an online social network? Base: Discretionary travelers who use social networks Source: PhoCusWright Inc.
2012 PhoCusWright Inc. All Rights Reserved. 31

Mobile Is Trending Everything

(Im)Maturity

Online Travel: Just Getting Started

Higher

U.S. Big Data/ Analytics

Search Merchandizing

Booking

Market Penetration

Mobile

Social Personalization
UKR
BUL RUS

Lower Lower
Source: PhoCusWright Inc.

Maturity

Higher

Thank You!
Questions? Douglas Quinby, Senior Director, Research PhoCusWright dquinby@phocuswright.com Twitter: @Douglas_Quinby

Go to
www.phocuswright.com

for more information!