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 Business Travelers Frequent Online Travel Agencies, 
But Prefer Airline and Lodging Web Sites, 
According to Keynote Study
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Often Use Online Travel Agencies as an Information Resource
and then Proceed Directly to Specific Air or Hotel Web Sites

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SAN MATEO, Calif., — November 17, 2004 — Although business travelers at companies with unmanaged or lightly managed travel policies pay more frequent visits to online travel agencies, they prefer the online experience provided by airline and lodging Web sites, according to a new study. The syndicated research study released by Keynote Systems (Nasdaq “KEYN”), The Internet Performance Authority®, is the first to examine the actual online habits and behavior of business travelers as they plan for and book travel.

The Keynote Open Web Research (OWR) for Business Travel is based on research with 1,500 business travelers as they interacted with dozens of leading travel Web sites. In addition to traditional opinion data, Keynote’s proprietary research technology allows for the collection of detailed qualitative and behavioral data as users surf and perform tasks on the Web.

The study focused on business travelers whose travel was unmanaged or lightly managed by their company.

Online Travel Agencies vs. Airlines and Hotel Web Sites

“The online agencies excel with travelers in general and clearly attract the most online visitors, but business travelers are actually more satisfied with the online experience and services of airline and lodging Web sites,” said Dr. Bonny Brown, director of research and public services for Keynote. “This differs from all other Keynote studies in the travel industry where the online agencies consistently outperformed supplier sites. Business travelers have a distinctly different view on researching and booking travel than do other travelers, and this presents a significant opportunity for travel suppliers such as airlines and hotels.”

According to the study, business travelers often use online travel agencies as an information resource and then proceed directly to specific air, hotel or rental car Web sites. Business travelers prefer the online experience of supplier sites, as evidenced by higher customer satisfaction and purchase impact rates, because supplier sites offer more services and options than online agency sites. For instance, business travelers find it easier to determine flight schedules on airline Web sites such as American Airlines and AmericaWest, as opposed to online agency sites.

When booking hotel rooms, Internet access is a key decision driver and highly-ranked hotel sites such as Hilton and Starwood allow you to determine which specific hotels have high-speed Internet access, whereas most online agencies do not offer similar information.

Price and Selection Top Purchase Drivers

In general, the price of a travel service and the selection available on a site are the top drivers for business travelers in determining where to purchase online, with air and lodging supplier sites the clear leaders in pricing satisfaction and the online agencies the clear leaders in selection. JetBlue and Southwest Airlines were ranked as the sites offering the best prices; whereas Expedia was consistently ranked as providing the best selection.

More than 85 percent of business travelers participating in the study mentioned price as a leading consideration, and 48 percent indicated that loyalty programs were a “very important” or “extremely important” consideration. For lodging, price and proximity of the hotel to business/meeting location were equally matched as leading considerations, cited by nearly 80 percent of business travelers. High-speed Internet access was mentioned as a “very important” or “extremely important” consideration by 53 percent of business travelers. A complete list of the leading factors driving purchase decisions is included in the full Keynote report.

“In general, travel sites have an opportunity to capture more of the unmanaged travel market and especially to increase sales of travel packages, such as air and hotel combinations, but to do so they need to more clearly demonstrate to customers that they are getting good value,“ said Brown.

Frequency of Travel Strongly Influences Purchase Decisions

However, the Keynote study found significant differences in the priorities business travelers place on price – and other considerations, such as loyalty programs and brand loyalty – based on the frequency with which they travel and the size of their business. Price decreases in importance the more frequently a businessperson travels, and also for travelers from larger businesses. Loyalty programs, specifically air mileage programs, are significantly more important to frequent business travelers – those traveling at least once every eight weeks – equaling price as the top consideration for these travelers.

Price was of increased importance to less frequent travelers and to those travelers whose travel purchases were unmanaged by their companies. Small business employees were much more likely to consider low cost air carriers such as JetBlue and Southwest Airlines.

Profile of the Unmanaged/Lightly Managed Business Traveler

Overall, business travelers start their research and booking process with a better idea of what they want and what sites they will visit than do leisure travelers, according to the study. More than 40 percent of business travelers start their search at a specific online agency, with Expedia the leading destination followed by Travelocity and Orbitz. Approximately 20 percent of business travelers start their search at a supplier site, with airline sites being the leading destination in this group. Another 20 percent start their process by visiting a search engine, with up to 40 percent visiting a search engine at some point during their planning, and Google being the leading site followed by Yahoo!

The majority of business travelers visit only one type of travel site, either choosing to do business only with online agencies -- or going directly to supplier sites and bypassing the online agencies all together. However, more than 35 percent of business travelers visit multiple types of sites during their planning and booking process.

One in three (33%) business travelers have made the trip they are taking before. Half of all business travelers are planning a billable trip, such as visiting a customer or client, with employees of large businesses significantly more likely to be taking such a trip. One-third (33%) of business travelers are traveling to attend a trade show or conference, with mid-size business employees more likely to be taking such a trip.

The American Airlines, Cheap Tickets, Delta, Hertz, Hilton, Hotels.com, Hotwire, Expedia, Marriott, Orbitz, Priceline, Southwest Airlines, Travelocity, United and Yahoo! travel Web sites were among those evaluated during this study. Other Keynote syndicated research (formerly known as Vividence syndicated research) in the travel industry includes specific examinations of the leading online lodging, cruise, rental car and travel package Web sites.

The entire report, Keynote Open Web Research (OWR) for Business Travel, is a 100+ page examination of the business travel industry containing hundreds of additional data points and a detailed analysis of the findings. For information about purchasing the full report, visit http://www.keynote.com/syndicated.html

“We expect to see travel companies across the board improve their online services, addressing the needs and preferences of these increasingly important customers,” said Brown. “There is obviously a critical need for travel companies to learn what their competitors are doing right online and to match that service.”

About Keynote
Founded in 1995, Keynote Systems (Nasdaq “KEYN”), The Internet Performance Authority®, is the worldwide leader in e-business performance management services. Over 2,100 corporate IT departments and 19,000 individual subscribers rely on Keynote’s growing range of measurement and monitoring, service level and customer experience management services to improve e-business performance by reducing costs, improving customer satisfaction and increasing profitability.


 
Contact:
Keynote Systems, Inc.
Dan Berkowitz
(650) 403-3305
dberkowitz@keynote.com
 www.keynote.com
Also See: Poll Shows Hotel Company Operated Web Sites Have Room to Improve / May 2004
Hotel Chain Best-rate Guarantees Taking Hold; Third-party Travel Sites No Longer the Place to Look for the Best Discounts / July 2004


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