Travel a ‘buyer’s market’ says Deloitte Consumer report

Travel a ‘buyer’s market’ says Deloitte Consumer report

More than half (59%) of holidaymakers now use the internet to compare prices as the travel sector becomes a buyer’s market, according to a new study.

As many as 42% use review sites when planning their holiday, compared to 31% using travel company websites and 21% online travel agents.

Of those planning with review sites 59% say this was their main influence, as people move from being content consumers to content creators.

The research also suggests travel companies must adapt to fragmented digital channels, as a third of consumers use two or more devices when researching their holiday.

The results are revealed in Deloitte’s Travel Consumer 2015 report which analysed data from a survey of 40,000 consumers by the British Travel Awards.

The research finds that price is the main factor driving holiday booking decisions, and travel comparison sites have been instrumental, according to Alistair Pritchard, UK lead partner for travel at Deloitte.

“These sites have grown rapidly and their usage is high, which can be put down to the deal-hunting behaviour consumers learned during the recession,” he said.

“However, while consumer confidence and real wages are improving, the desire to get the best deal is still set in the mind of the holidaymaker.

“The research also shows that if a consumer booked their last holiday using a price comparison site they are the least likely to be influenced by a company’s reputation and 30% more likely than average to base decisions on price.”

He added: “The travel industry plays a less influential role now, and holidaymakers are more likely to be influenced by each other than content created by travel businesses.

“According to our research, a third of holidaymakers have posted a travel-related review to a review site. As the digital divide closes and older people become more active online this is only going to increase.

“Our research shows that baby boomers are almost as likely as millennials to view or be influenced by these sites, but are actually more likely to write a review.

“One way for travel companies to adapt to this is to create a recommendation culture, as word-of-mouth marketing is relatively low-cost and self-perpetuating, and can help reduce customer acquisition costs.”

Pritchard explained: “Increasingly consumers are using their smartphones and tablets for research, then switching to their desktop or laptop to book. They could also be using multiple apps and websites on these devices.

“This can have a negative impact on sales conversion rates, as a customer that abandons an online basket in a tablet app to book on a laptop appears as two separate consumers.

“Fragmentation has also made it difficult for travel companies to track consumer activity, making it harder for them to use the potential wealth of data to understand and meet consumer expectations and offer differentiating features like personalisation. All this could result in a poor user experience.

“To allow activity to be tracked across devices and apps, companies should introduce an integrated experience across channels and devices, for instance by offering incentives to encourage users to sign in on every platform.”

Travel businesses should now be on their own transformation, from a product-centric model to a model based around the perspective of the consumer, he advised.

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