Travel digital iq 2011

®

SCOTT GALLOWAY
Travel
NYU Stern

A P R I L 2 6 , 2 0 11
A ThInk TAnk
for DIGITAL InnOVATIOn

© L2 2011 L2ThinkTank.com

05.20.11
CLInIC nYU Stern

Emerging Digital
Media Platforms
The Long Tail of Social Media
While Facebook dominates the social media landscape, a multitude of other digital
platforms have emerged that provide fertile ground for brands to:

• Reach new consumers

• Run creative experiments

• Explore new forms of digital expression and consumer
online behavior

These platforms range from the bold experiments of incumbent behemoths (Facebook
Places and Google’s Boutiques.com) to smaller players who are gaining traction
(Foursquare and Tumblr) to new entrants with small, passionate user bases (Pinterest,
GetGlue, and Layar).

This half-day intensive Clinic will help managers and senior marketers identify the
relevant platforms for their brands and prioritize incremental investment in the long-tail
of social media. http://L2EmergingMedia.eventbrite.com/

DiGiTAL iQ Index ®:

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InTRODUCTIOn

Killer App: The internet
Massive choice coupled with a product that can be distilled to zeroes and ones makes
the Internet a killer app for the travel industry.

While e-com’s share of U.S. retail stands at 5.9 percent, travel garners 38 percent of revenue
from the ether.1 The browser is the booking agent of choice for 87 million Americans, however
the industry dedicates a meager seven percent of its marketing budgets to digital channels.2
Many iconic travel brands struggle to leverage the online environment.

The Social Web The Empire Strikes Back
The rise of social media presents a fresh set of opportunities Brands are starting to fight back. From Delta’s fully integrated
and challenges to hotels, airlines, and cruise lines. Although Facebook booking to Four Seasons’ active customer service
two thirds of customers are influenced by online user reviews, via Twitter, brands are beginning to recapture lost ground and
only nine percent of the brands in the Index offer reviews, or move to the center of the customer conversation.
any form of user-generated content, on their sites. Social-shar-
In December 2010, American Airlines announced it would by-
ing tools, live chat, and customer service via social media are
pass the central reservation system that supplies flight informa-
more common, but are still employed by less than half of the 89
tion to popular OTAs, opting to develop its own technology that
brands analyzed. As brands debate the merits of transparency,
provides additional customization for passengers and travel
online travel agents (OTAs) and comparison engines, includ-
agents. Expedia responded by indicating that it would not be
ing Expedia, Orbitz, TripAdvisor, and Kayak, fill the void with
renewing its contract with the airline and refused to integrate
authentic reviews and pricing clarity. Brands have paid a steep
the new system. Although the two parties came to an agree-
price for staring at their navels while intermediaries give the
ment in early April, the dispute is a signal that brands will not
consumer what they want. Of the 10 most-trafficked travel sites,
just roll over online.
only one, Southwest, belongs to a supplier.

1. U.S. Department of Commerce, February 2011
2. eMarketer, April 2011

© L2 2011 L2ThinkTank.com 3


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InTRODUCTIOn

Digital iQ = Shareholder Value
TRAVEL BOOkInG
Our thesis is that digital competence is inextricably linked to
Online Marketing Share by Channel 1
shareholder value in the travel industry. Key to managing and
developing a competence is an actionable metric. This study
attempts to quantify the digital competence of 89 global airline, 100% = BRAND
69% 67% 66% 59% 56% 54% 41% 44% 44% WEBSITE
hotel, and cruise brands. Our aim is to provide a robust tool to
= ONLINE TRAVEL
diagnose digital strengths and weaknesses and help managers AGENT (OTA)
at travel brands achieve greater return on incremental investment.
80%
Like the medium we are assessing, our methodology is dynamic,
and we hope you will reach out to us with comments that improve
our approach, investigation, and findings. You can contact me
at scott@stern.nyu.edu. 60%
59%
56% 56%
Sincerely,

46%
40% 44%
41%
SCOTT GALLOwAY
33% 34%
Founder, L2 31%
Clinical Professor of Marketing, NYU Stern
20%

0%
2008 2009 2010 2008 2009 2010 2008 2009 2010

AIRLINES HOTELS CRUISE LINES

1. “Nothing But Net,” J.P Morgan, January 2011
.



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ABOUT ThE RAnkInGS

C AT E G O R I E S M E T h O D O LO G Y

140+ Genius Site - 30%:
Digital competence is a point of competitive Effectiveness of brand site.
differentiation for these brands. Sites are more • Functionality & Content (75%)
than just transactional. These brands have • Site Technology
creatively engineered their messaging to reach • Site Search & Navigation
travelers on a variety of devices and online • Reservations
environments. • Flight/Hotel/Cruise Information
• Checkout & Special Offers
• Customer Service
110-139 Gifted • Rewards/Loyalty Programs
Sites are highly functional. These brands typically
• Brand Translation (25%)
are active in mobile and social media, are visible
• Aesthetics
on top search engines, and offer email marketing.
• Messaging & Interactivity

90-109 Average Digital Marketing - 30%:
Digital presence is functional yet predictable, Marketing efforts, off-site brand presence, and visibility on search engines.
and innovation efforts are uninspired and lack • Search: Traffic, SEM, SEO, Web Authority
ambition. Boilerplate marketing. • Email: Frequency, Content, Social Media Integration, Promotion
• Digital Marketing Innovation: Presence, Innovation
70-89 Challenged • Blog Presence: Mentions, Sentiment
These brands bare-bones sites provide only basic
functionality. Digital campaigns are an after- Social Media - 20%:
thought. Demonstrate an inability to activate their Brand presence, following, content, & influence on major social media platforms.
social communities and many are missing from • Facebook: Likes, Growth, Post Frequency, Ability to Transact, Responsiveness
mobile. • Twitter: Followers, Growth, Tweet Frequency, Online Voice
• YouTube: Views, Number of Uploads, Subscriber Growth, Content
<70 Feeble
These brands are digitally off the map. They are Mobile - 20%:
marked by poorly designed sites and a failure to Compatibility and marketing on smartphones and other mobile devices.
leverage digital to market to consumers. Mobile • Mobile Sites: Compatibility, Functionality, Ability to Transact
and social media are not meaningful elements • Smartphone Applications: Availability, Popularity, Functionality
of their strategies. • iPad Integration: Marketing, Applications



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D I G I TA L I Q R A n k I n G
AIRLINE HOTEL CRUISE

Rank Brand Category Digital iQ Class Description
From mile high check-ins on Foursquare to Facebook booking, Delta’s digital efforts are first
1 DELTA Airline 168 Genius
in class

2 SOuThWEST Airline 165 Genius SWA’s superior marketing translates across digital touch points; strongest site in the Index

Content-rich site, strong Twitter and Facebook following, and efficient mobile app help
3 AMERiCAn AiRLinES Airline 158 Genius
AA soar

4 W hOTELS hotel 149 Genius “Welcome to Wonderland” delivers W experience straight from your browser

Managing more than 530 properties on one site is no small feat; 22 percent ROI through
5 hiLTOn hotel 143 Genius
mobile channels

6 WESTin hotel 141 Genius Amazon storefront allows enthusiasts to purchase the Heavenly bed online

7 COnTinEnTAL Airline 140 Genius Facebook frequent flier enrollment and international mobile check-in give Continental lift

8 LuFThAnSA Airline 139 Gifted MySkyStatus posts your flight coordinates to Twitter or Facebook from the air

9 FOuR SEASOnS hotel 138 Gifted Luxury leader buttresses customer service excellence via Twitter

10 inTERCOnTinEnTAL hotel 137 Gifted Insider iPad app boasts local concierge recommendations for more than 120 destinations

10 JETBLuE Airline 137 Gifted 1.6 million Twitter followers may come for deals, but stay for responsive customer service

12 hYATT hotel 136 Gifted Site leads in function and findability

13 BRiTiSh AiRWAYS Airline 135 Gifted Carbon offset add-on when booking signals innovation around sustainability

Community reviews, YouTube videos, and mobile app offer consumers a buffet
13 ROYAL CARiBBEAn Cruise 135 Gifted
of digital options



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Everyonesanoriginal.com social community allows guests and employees to share their
15 FAiRMOnT hOTELS hotel 134 Gifted
stories, pictures, and videos

Social darling of the industry is not afraid to take risks; surprise campaign rewarded Twitterers
15 KLM Airline 134 Gifted
with personalized gifts while they waited to board

17 ShERATOn hotel 132 Gifted Sheratonbetterwhenshared.com features guest stories from across the globe

18 MARRiOTT hotel 131 Gifted A giant in search, but doesn’t score as well on social media platforms

19 CAThAY PACiFiC Airline 130 Gifted Prolific presence on YouTube boosts Asia’s airline leader; iPad app profiles airline employees

Facebook fan base increased almost 400 percent from February to mid-March on the wings
20 AiR FRAnCE Airline 129 Gifted
of F-Commerce

21 hOLLAnD AMERiCA Cruise 127 Gifted One of the few luxury cruise lines aggressively purchasing search terms on Bing

Extends a warm Aussie welcome to site visitors with top-notch customer service and
21 QAnTAS Airline 127 Gifted
informative airport guides

Brand is in transition and it shows; site’s strong transaction-functionality is handicapped
21 uniTED Airline 127 Gifted
by dated aesthetics

“LM 100” serve as brand ambassadors online, but Facebook presence doesn’t extend
24 LE MÉRiDiEn hotel 126 Gifted
to properties

24 ViRGin ATLAnTiC Airline 126 Gifted The Innovation Zone showcases the best in travel mobile apps

Scores points for mobile apps and Facebook responsiveness, but luxe feel fails
26 OMni hotel 124 Gifted
to translate online

27 MAnDARin ORiEnTAL hotel 122 Gifted Site customer service lags luxury peers, but makes up ground on social media

Rico campaign on YouTube is one of the most playful in the industry, but poor site
28 AiR nEW ZEALAnD Airline 119 Gifted
functionality keeps brand from taking off



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Limited social media presence hurts, but brand gets marks for destination guides and ability
28 LuxuRY COLLECTiOn hotel 119 Gifted
to search hotels by “pursuit”

28 ST. REGiS hotel 119 Gifted Individual properties are on Twitter, but the brand hasn’t checked in

28 uS AiRWAYS Airline 119 Gifted Highly functional but otherwise forgettable site

32 EMiRATES Airline 118 Gifted Brand YouTube channel includes link to booking

Social media sweetheart’s fanatical following on YouTube buttresses entire Disney
33 DiSnEY CRuiSE LinE Cruise 117 Gifted
travel empire

34 AiR CAnADA Airline 115 Gifted Connects Canada to the world, but is not connecting with passengers via social media

35 RiTZ-CARLTOn hotel 110 Gifted Interactive Facebook page garners five stars but bland site fails to deliver

Cabin Experience videos on site highlight each class of service, including menu
35 SinGAPORE AiRLinES Airline 110 Gifted
and entertainment options

37 nORWEGiAn CRuiSE LinE Cruise 109 Average Engages cruise community through user reviews and Facebook countdown clock

Facebook page has grown fast on heels of strong app that allows guests to interact with
37 SOFiTEL hotel 109 Average
individual properties

39 KiMPTOn hotel 106 Average Boutique chain scores innovation points offline, but is still figuring out social media

40 KOREAn AiR Airline 105 Average Features one of industry’s only video newsletters

41 WALT DiSnEY WORLD RESORT hotel 104 Average Social media presence brings Disney magic to life, but no photographs of rooms on site

Strong synergy between site, print, and social media but will need more than its
42 FROnTiER Airline 103 Average
“spokesanimal” mascots to woo fans online



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43 ViRGin AMERiCA Airline 102 Average Hip brand is not part of the cool crowd online

44 CunARD LinE Cruise 99 Average Facebook presence and YouTube videos suggest brand is willing to extend its regal heritage

Experience Etihad provides virtual tours of the luxury cabin, lounge, and transportation
45 ETihAD AiRWAYS Airline 98 Average
services

46 WALDORF ASTORiA hotel 96 Average Inconsistent site varies by property, but scores points for translating on a mobile device

47 ShAnGRi-LA hotel 95 Average Strong mobile and social media efforts keep brand out of the challenged ranks

48 SWiSSôTEL hotel 94 Average Facebook ski jump app attempts to tap into gamification phenomenon

49 LOEWS hotel 93 Average Seamless booking and strong customer service, but brand lacks digital differentiation

50 ThAi AiRWAYS Airline 92 Average Limited site functionality and social presence make Thai just average

51 JOiE DE ViVRE hotel 90 Average Attributes more than 1,000 bookings to tweets and Facebook posts

52 ThE LEADinG hOTELS hotel 89 Challenged Broken links show lack of digital leadership

53 SOuTh AFRiCAn AiRWAYS Airline 88 Challenged Poor technology and outdated information leaves site at the gate

54 JW MARRiOTT hotel 87 Challenged Limited social media outreach suggests brand forgot the turndown service

My Jumeirah virtual space allows guests to customize their travel and site
55 JuMEiRAh hotel 86 Challenged
browsing experience

55 LinDBLAD ExPEDiTiOnS Cruise 86 Challenged Clunky reservation system renders visitors queezy



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55 PEninSuLA hOTELS hotel 86 Challenged Visually appealing site falls flat on functionality

58 BAnYAn TREE hotel 84 Challenged Brand gets needed boost from high engagement and growth on Facebook

58 RELAiS & ChÂTEAux hotel 84 Challenged Site lacks functionality, but iPhone app delights

60 KEMPinSKi hotel 82 Challenged Europe’s oldest luxury hotel chain seems stuck in the digital Dark Ages

60 QATAR AiRWAYS Airline 82 Challenged Public company with a private Twitter account?

62 P&O CRuiSES Cruise 81 Challenged Cruise webcams score points for “Britain’s favorite cruise line”

62 RAFFLES hotel 81 Challenged Strong aesthetics provide only partial reprieve from dated and glitchy website

64 CRYSTAL CRuiSES Cruise 78 Challenged Brand site remains docked without e-commerce capability

64 SEABOuRn Cruise 78 Challenged Luxury feel but limited social media presence

66 MORGAnS hOTEL GROuP hotel 77 Challenged Lifestyle content differentiates brand; UrbanDaddy partnership amplifies message

66 OCEAniA CRuiSES Cruise 77 Challenged Average website functionality and limited social media usage places Oceania in steerage

66 REGEnT SEVEn SEAS CRuiSES Cruise 77 Challenged Subtle reservation box on site is easy on the eyes but loses points on conversion

66 WARWiCK inTERnATiOnAL hotel 77 Challenged Limited community suggests social media late arrival

70 COnRAD hotel 75 Challenged Fails to step out of shadow of larger Hilton brand online



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71 OBEROi hotel 74 Challenged No email opt-in limits online communication

71 PREFERRED hotel 74 Challenged Strong loyalty program fails to unite brand online

Generates more traffic than most luxury cruise lines, but without booking capability what
73 WinDSTAR CRuiSES Cruise 73 Challenged
is it worth?

74 OnE&OnLY hotel 72 Challenged Elegant site is hampered by poor functionality

75 SiLVERSEA CRuiSES Cruise 71 Challenged Social sharing hints at digital aptitude, but no booking capability causes IQ to sink

76 AZAMARA CLuB CRuiSES Cruise 68 Feeble Destinations dominate on gorgeous site, but social media efforts have yet to embark

77 TAJ GROuP OF hOTELS hotel 67 Feeble Lackluster social media impairs India’s luxury leader

78 PARK hYATT hotel 65 Feeble Limited stand-alone social media presence and hard-to-find site hinder differentiation online

79 ASiAnA Airline 64 Feeble Limited unique visitors and page rank hurt brand

80 ROCKRESORTS hotel 62 Feeble No customer loyalty program and limited social media use constrain hospitality online

81 SEADREAM YAChT CLuB Cruise 61 Feeble Mobile presence prevents shipwreck, but limited transaction-capability damages IQ

Inaccurate, text-heavy site coupled with social media absence leaves this brand trailing
82 REGEnT inTERnATiOnAL hotel 54 Feeble
its peers

Dated website and lack of social media presence limit brand in U.S. market, but mobile
83 AiR ChinA Airline 52 Feeble
effort provides a boost

84 PAn PACiFiC hotel 51 Feeble One of a handful of hotel brands that has ignored Twitter



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URL architecture assures each property can stand alone but fails to yield economies
85 ROSEWOOD hotel 50 Feeble
in search, traffic, or authority

86 hAinAn AiRLinES Airline 48 Feeble One of the few airlines with no mobile offering

87 ORiEnT-ExPRESS hotel 45 Feeble Without online upgrades hotel chain risks digital oblivion

88 JAPAn AiRLinES Airline 36 Feeble Outdated site and lack of social media leaves the brand sitting on the tarmac

89 SWAn hELLEniC Cruise 31 Feeble Facebook launch in February may put some needed wind in its sails



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kEY FInDInGS

Selling is Knowing A V E R A G E D I G I TA L I Q &
There is a direct relationship between the average Digital IQ PERCEnT OF BOOkInGS OnLInE
by category and the percentage of purchases made online. By Category
Nearly half of Airline bookings are made online. The 29 airlines
studied registered an average Digital IQ of 113, and 62 percent 120 60%
of brands were classified as Genius or Gifted. The Cruise
113
category lags the industry, and generates only nine percent of
its bookings online. Cruise lines posted an average Digital IQ 110 50%
48%
of 86 and six of the 16 brands in the Index do not provide basic
e-commerce capability.

100 40%
97

% of Bookings Online
Digital IQ Score
30%
90 30%
“ What’s next? Look for increased personalization of 86
consumer interactions with hospitality brands, based
upon past preferences and current online behavior.
This mass customization will cut across all digital media as the
80 20%
consumer researches, purchases, takes part in, and reflects upon the
travel experience. ”
—Stuart Levy | Assistant Professor, Dept. of Tourism & Hospitality
Management, The George Washington University School of Business 70 10%
9%

60 0%

AIRLINES HOTELS CRUISE LINES



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kEY FInDInGS D I G I TA L I Q D I S P E R S I O n

% of Organizations per Digital IQ Class

Bifurcation
GEniuS Delta
The dispersion of Digital IQ demonstrates that the prestige travel Lufthansa Le Méridien Southwest
DiGiTAL iQ
industry does not follow a traditional bell curve when it comes Four Seasons Virgin Atlantic 8% American
>140
InterContinental Omni W Hotels
to digital innovation. A remarkable 41 percent of brands were
JetBlue Mandarin Hilton
classified as Genius or Gifted, however an additional 43 percent Oriental Westin
were Challenged or Feeble. The dispersion of scoring suggests
Hyatt
Air New GiFTED Continental
British Airways
Zealand
the winners are pulling away from the losers when it comes to Royal
Caribbean Luxury
online aptitude. Collection
Fairmont Hotels
St. Regis
KLM
There is also a relationship between Digital IQ and the amount Sheraton
US Airways DiGiTAL iQ 33%
Emirates 110-139
of time users spend on the brand site. Genius and Gifted brands Marriott
Disney Cruise
Cathay Pacific Line
register average user time of 6.2 minutes and 4.9 minutes,
Air France Air Canada
respectively, while users spend only 3.4 minutes on the sites of Holland Ritz-Carlton
Feeble brands. America
Singapore
Qantas Norwegian Cunard
Airlines
United
AVERAGE Cruise Line Etihad Airways
Sofitel Waldorf Astoria
AVERAGE TIME On TRAVEL SITES
Kimpton Shangri-La
DiGiTAL iQ
by Digital IQ Class 17% Korean Air Swissôtel
The Leading Cruise Line 90-109
Walt Disney Loews
Hotels Morgans Hotel World Resorts
8 South African Group Thai Airways
Frontier
Airways Oceania Joie de Vivre
Virgin America

6.2
JW Marriott Cruises ChALLEnGED
Jumeirah Regent 7 Seas
6 Lindblad Cruises
Expeditions Warwick
4.9 International
Peninsula DiGiTAL iQ
4.2 Hotels Conrad Hotels 27%
4.0
Minutes

Banyan Tree & Resorts 70-89 Azamara Air China
4 3.4 Oberoi Cruises Pan Pacific
Relais &
Chateaux Preferred Taj Group of Rosewood
Hotels and Hotels Hotels
Kempinski
Resorts Park Hyatt
2 Qatar Airways Hainan Airlines
WindStar Asiana Airlines
P&O Cruises Cruises FEEBLE RockResorts
Orient-Express
Hotels
Raffles One&Only
International SeaDream Japan Airlines
Silversea Yacht Club
0 Crystal Cruises DiGiTAL iQ Swan Hellenic
Cruises 16% Regent
Genius Gifted Average Challenged Feeble Seabourn <70 International
Hotels



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kEY FInDInGS

Digital iQ = Pricing Power D I G I TA L I Q v s . Y E A R - O V E R -Y E A R C h A n G E I n
The recession forced the prestige hotel industry to slash its A V E R A G E D A I LY R O O M R AT E
room rates. Our analysis demonstrates a positive correlation (Hotels with Published Data: 2010 vs. 2009)
of 0.60 between Digital IQ and 2010 versus 2009 changes in
Average Daily Rate among the nine hotels with published data,
180
suggesting hotel brands that are more digitally competent have
been able to rebound faster.
Correlation = .60

160
innovation Silos?
Examination of Digital IQ across portfolio companies sug-
gests travel industry conglomerates are good at leveraging
140
economies of scale online across multiple brands. The average
Digital IQ dispersion of parent companies in the industry was
40 points, versus a dispersion of 77 points across parent com-

Digital IQ
panies in the 2010 Digital IQ Index®: Luxury and 47 points in the 120
2010 Digital IQ Index : Beauty.
®

With six brands in the study, Starwood highlights the benefits of
100
an organization-wide approach to digital. All of the company’s
brands sit on the same site platform, providing enhanced SEO,
cross-sell opportunities, and best-in-class customer service
without compromising the distinct identity of each hotel. Star- 80
wood has taken a similar approach on Facebook, where the
company boasts a page for nearly every property. Each page
highlights unique features of the property, brand, and desti-
60
nation while leveraging community engagement tactics and 0% 1% 2% 3% 4% 5% 6% 7% 8%
content from across the Starwood organization. % Change in Average Daily Rate



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kEY FInDInGS

A V E R A G E D I G I TA L I Q BY P O R T F O L I O C O M PA n Y

Organizations with More than One Brand

170
GENIUS

Disparity

30 Disparity

68 Disparity

140 Disparity Disparity
Disparity Disparity 13
Disparity 53 5 71 67
Disparity 44 AVG IQ
AVG IQ

134 Disparity

66
AVG IQ

131 132 24
GIFTED

Disparity

13
AVG IQ

110 114 AVG IQ
AVG IQ

109 111
AVG IQ
AVERAGE

105 AVG IQ

103 AVG IQ AVG IQ

101 102

90 AVG IQ

89
CHALLENGED

Disparity

23
70
AVG IQ

66
FEEBLE

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kEY FInDInGS

The hare
Although travel brands sped to the front of the pack with SITE CONTENT & TOOLS
commerce-enabled sites, analysis across airlines, cruise lines,
% of Brand Sites with and Without the Following Tools:
and hotels suggests progress in the digital medium has slowed.
Nearly 40 percent of travel brand sites fail to incorporate video.
Less than half provide an online customer loyalty or frequent flier Online
93% 7% = YES
program. Only 28 percent have some form of social sharing, and Booking
= NO
just 20 percent incorporate the Facebook Like button.
Video 62% 38%
While prestige travel is largely built around customer service,
only 17 percent of the brands in the study offer live chat.
Online Loyalty
Southwest, the leader in site scoring, provides a glimpse into Program 45% 55%
the future of brand travel sites, blending function, technology,
and community. Social
Sharing
28% 72%

Facebook
“Like” 20% 80%

“ Leading travel brands recognize the opportunity to
use digital and social media as more than a booking
Live Chat 17% 83%
channel. Genius brands use their websites and social
media communities to extend and enhance the customer service
experience; creating deeper connections with travelers and allowing User
Reviews 9% 91%
guests to experience the quality of their customer service before,
during and after their stay. ”
—Melissa Dowler | Chief Marketing Officer, ISM 0% 20% 40% 60% 80% 100%



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kEY FInDInGS

under Review
Although two-thirds of consumers report being influenced by I M PA C T O F S I T E F E AT U R E S O n T R A F F I C G R O w T h
traveler-generated ratings, only nine percent of the brands in
(March 2010–March 2011)
the study offer reviews on their sites.3 Even among those of-
fering reviews, most segregate them from the booking experi-
50%
ence or sanitize the feedback. Examples include Fairmont’s
Everyone’s an Original microsite or Kepinski Hotels, which
link to pages on TripAdvisor. Although laggard in other dimen-
sions, the Cruise category has been the first to embrace guest 40%
feedback, and four brands include user reviews. Traffic to sites
that incorporate user reviews grew 24 percent, versus seven
percent for those without reviews, suggesting user-generated
content provides more authenticity and traffic. 30%

Traffic Growth
The increasing Cost of Search 24%

Industry revenues are up significantly following the recession,
20%
but traffic to the 89 travel brand sites in the Index is down eight 17%
percent year-on-year. One of the reasons is the increasing cost
of paid search, one of the industry’s primary traffic drivers.
Of the brands in the Index, 72 percent engage in key-word
10%
purchase on Google, and 64 percent purchase terms on Bing. 7%
6%
Average cost-per-click search advertising was up 21.3 per-
cent in the travel industry January 2010 through January 2011,
suggesting it is becoming increasingly expensive for brands to 0%
compete for prime search engine real estate.4 Google’s April YES NO YES NO

acquisition of ITA, a software company that powers the majority
of flight fare search on brand sites and travel portals, provides
User Reviews Social Sharing
additional cause for pause, and many predict search engine
marketing pricing will continue to skyrocket.

3. “Top Traveler Technology Trends,” PhoCusWright, August 26, 2010
4. Company Blog, EfficientFrontier, February 4, 2011



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kEY FInDInGS
T O P 8 R E F E R R A L & D E S T I N AT I O N S I T E S : T R A V E L B R A N D S I T E S
The Online itinerary
Upstream and Downstream Traffic to and from
The average online consumer visits more than 20 sites while Social Media Sites, Online Travel Agents, and Competitor Sites
researching travel online.5 Examining the upstream and down-
stream referral sites across the 89 brands reveals that social
= SOCIAL MEDIA
media, online travel agents such as Travelocity and 100% SITE
Expedia, and competitor sites factor considerably into this = ONLINE TRAVEL
AGENTS (OTAs)
sample set. 90%
= COMPETITOR

In addition, brands are driving significant traffic to and from 81%
Facebook. Of the brands in the Index, 78 percent registered 80%
Facebook as a top-eight source of referral traffic, and on aver-
age Facebook drove seven percent of traffic to brand sites.
Even more staggering, 90 percent of the brands recorded
Facebook as a top destination site after leaving the brand site. 60%

52%
47%
“ While many travel sites have evolved into purely
transactional platforms, your customer may have 40%
just come from your competitor’s site. The best sites 35%
communicate a unique brand experience in a way that doesn’t inter-
29%
fere with the transaction. ”
—Bob Minihan | Chief Creative Officer, ISM
20%

11%
“ Hospitality companies should not view OTAs as com- 7%
5% 6%
petitors. Rather, they can be strategic collaborators
2% 3%
and super-marketers. Recent research termed the 0%
“Billboard Effect” demonstrates that hotel exposure on OTA listings % of Brands % of Traffic % of Brands % of Traffic
can drive significant additional booking traffic though brand websites. ” Upstream Traffic Downstream Traffic
—Stuart Levy | Assistant Professor, Dept. of Tourism & Hospitality To Brand Site From Brand Site
Management, The George Washington University School of Business

5. “Refining the Travel Search Process,” Compete & Google, December 15, 2009



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kEY FInDInGS

The Web is Dying & Facebook is Thriving
Another reason for diminishing traffic to brand sites is the B R A n D FA n P O S T R E S P O n S I V E n E S S
maturation of the web and the rise of Facebook. In 2001, the 10 A c r o s s 8 5 B r a n d Fa c e b o o k Pa g e s
most-visited sites on the web accounted for 31 percent of U.S. (March 2011)
page views, in 2006 it was 40 percent, and it is now 75 percent,
50%
suggesting the medium and long tail of the web is decreasing
in importance.6 Facebook alone accounts for 12.3 percent of
all consumer time on the Internet.7 Facebook usage is nearly
ubiquitous across the travel category, and all but four brands
40%
feature at least one dedicated page. During the first quarter
2011 measurement period, travel brand Facebook communities
grew an average of 20 percent.

30%
27%

21%
“ Your customers already spend their time on Face- 20%
book, so targeting them there is more efficient and
16% 16%
effective than driving them to custom-built social 15%
networking portals. Facebook continues to enhance its flexibility for
custom fan page and application development, making the social
10%
networking site an increasingly attractive option for brands. ”
—Melissa Dowler | Chief Marketing Officer, ISM
4%

0%
2 Hours 2-6 7-12 13-24 Over Does Not
or Less Hours Hours Hours 24 Hours Respond

6. “The Web is Dead, Long Live the Internet,” Chris Anderson and Michael Wolff,
Wired Magazine, August 17, 2010
7. “The 2010 Digital Year in Review,” comScore, February 8, 2011



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S O C I A L M E D I A S T R AT E G I E S
Social Media Management Across All Brands

Travel brands take a variety of approaches (marketing, custom- 49%
50% 48%
er service, commerce, etc.) when it comes to managing social = BRAND PAGE &
PROPERTY/
media across properties and regions. Almost half of the Hotel REGIONAL
40% PAGES
brands had more than one account on Facebook and Twitter.
33% = BRAND PAGE
ONLY
Four Seasons maintains accounts on both social media 30% 28%
= PROPERTY/
platforms for each of its properties. Norwegian Cruise Line REGIONAL
PAGES ONLY
maintains separate pages by region, including specific pages 20%
= NO PRESENCE
for Argentinean and Brazilian passengers. Nine percent of 11% 12%
10% 8% 9%
brands on Facebook and 12 percent of those on Twitter have
no centralized accounts, opting to let properties manage their
own social media efforts. 0%

Facebook Twitter

TwITTER COnTEnT
% of Brands on Twitter with the Following:

= YES
News/Info 83% 17% = NO

Deals 65% 35%

Contests 52% 48%

Customer
Service 46% 54%

Regional Twitter page for Four 0% 20% 40% 60% 80% 100%
Seasons’ Beverly hills location



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T O P 1 0 B R A N D S : FA C E B O O K L I K E S T O P 1 0 FA S T E S T- G R O w I n G FA C E B O O k A C C O U n T S

(March 2011) (January–March 2011)

Air France 377%

Regent
Walt Disney 239%
International
World Resort

British Airways 144%
5,699,438
AIR FRAnCE
P&O Cruises 54% TRAVEL ChALLEnGE
Southwest
1,330,073 Drove significant “like” growth. Fans guessed
the location of the “photo of the day” to be entered
South African into a sweepstakes for 30 pairs of round trip tickets.
Disney Cruise Line 514,793 53%
Airways
Chance of winning increased by inviting friends to enter.

JetBlue Airways 471,787
Cathay Pacific 45%

Air France 315,803
One&Only 39%
Royal Caribbean 265,751

Frontier 39%
United 255,970

Emirates 226,926 Air New Zealand 34%

Lufthansa 178,146
Hyatt 32%
American 136,385
0 100% 200% 300% 400%
= 50,000
FACEBOOK
LIKES


Travel digital iq 2011

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