Online travel demographics – Web answers vital questions

One of the advantages online has over other media is the depth of demographic information available to companies, by virtue of its connection to reams of user data. Steve Jones looks at who is really using the Internet to find travel products. Give or take a year or two, the Internet as a commercial force…

One of the advantages online has over other media is the depth of demographic information available to companies, by virtue of its connection to reams of user data. Steve Jones looks at who is really using the Internet to find travel products.

Give or take a year or two, the Internet as a commercial force has been with us in the UK for a decade.

But what started out as the domain of the geek – with all due to respect to the tech savvy – has now spread to the masses.

According to the Office of National Statistics, around 56% of UK households now have Internet access, the majority – 64.2% at the last count – enjoying the benefits of broadband connection.

All this presents significant opportunities to travel companies who can now access broad swathes of society, irrespective of their social or economic status.

So who exactly is searching for travel online?

The short answer is pretty much everyone, though some demographics are more active than others.

According to research analysts Nielsen//NetRatings, travel as a sector has historically been stuck in the past when it comes to gender and has failed to target the increasing number of women coming online.

However, while travel as a whole still lags behind, it is improving.

“When the web was first around it was used by niche parts of society, techy geeks, males in their 20s who were IT and scientifically literate,” explains Nielsen//NetRatings European Internet analyst, Alex Burmaster.

“Generally, sites, and the way they were designed, were targeting men. That changed as the Internet developed but some industry sectors have been slower than others to change. It’s a generalisation but maybe travel was among them.”

But it is catching up. Since June 2003, the number of female visitors to travel websites has risen 33% to represent 45% of all visits to travel websites, just two percentage points behind the Internet as a whole.

And there are significant sector variations. Cruise websites receive more than 50% of their visits from women, a 22% increase on June 2003, while multi-category sites – such as Expedia and Lastminute.com – attract 48%, up almost 40% from two years ago.

Map and travel information sites on the other hand are still underperforming, receiving only 40% of their hits from women.

“Travel has been better at pulling in women over the past two and a half years,” says Burmaster. “It is all about the user experience and making sites conducive to women.”

Colour, design and navigation all play their part, he suggests.

Offline advertising could also be a factor, with websites targeting their marketing to attract women.

Another area where travel “significantly underperforms”, according to Nielsen//NetRatings, is in the under-25 age group, which accounts for 29% of all web use but only 17.5% are visits to travel sites.

Not that it’s a criticism, says Burmaster. “It’s because younger people are less likely, in comparison to older age groups, to book holidays. Some in that age bracket will go on holiday with their parents and may not have the disposable income.

“Having said that, in some resorts you’ll find no-one above the age of 25 so there is potential to target that group. It’s moving in the right direction but there is still a way to go.”

And moving in the right direction it is, by 30% from June 2003.

Travel’s greatest strength is attracting 35 to 64-year-olds who account for 60% of visits to all travel sites, against the Internet average of 50%. Airlines fare very well, attracting 65% of their visits from this age group, and multi-category sites 63%.

To break it down further, users aged 35 to 49 make up 40% of airline visits and multi-category 36%, with the balances of 25% and 23% respectively made up of 50 to 64-year-olds.

Burmaster says that while the industry has been good at targeting the over 50s, the share in the 50 to 64-year-old category has dropped away since June 2003. However, the over 65s has increased, an indication of how silver surfers have embraced the Internet, dispelling the myth that technology is a young person’s domain.

“The over 50s make up a quarter of the entire Internet population, which is an amazing statistic, and travel has outperformed other sectors in capturing this market,” says Burmaster. “This age group accounts for 32% of visits to airlines and 33% to multi-category sites.”

He continues: “Once the kids have gone to university, the parents have more disposable income and time, which could explain why brands with a higher proportion of over 50s tend to be information sites.

“Unlike younger generations who grew up with the web, silver surfers researched in libraries and used encyclopaedias. The Internet is a recent invention for them but they have taken to it with great gusto.”

Of 10 major brands studied by Nielsen//NetRatings, Expedia and Airline Network attracted the highest number of silver surfers, accounting for 37% and 35% of their audiences. Ryanair and InterContinental attracted the fewest, with 28% and 25% of their visits from the 50-plus age range.

Perhaps unsurprisingly, the 50-plus market also spend more time searching travel websites – 64 minutes per month on average – a statistic most emphatically demonstrated compared to under-25s who spend just 18 minutes surfing travel sites.

Where travel is the most closely aligned with the general Internet audience is income. What is immediately noticeable, says Burmaster, is how over the past two and a half years, travel has attracted a greater percentage of wealthier households.

“This is good news for the industry for obvious reasons,” he says.

For travel as a whole, 34% of site visits are from households with an income of more than £50,000 per year, a rise of almost 50% since June 2003.

A further third are from households earning between £30,000 and £50,000, a rise of 24%. Just over one in every 10 visits is from a home bringing in under £20,000.

According to Burmaster, British Airways and, more surprisingly, Ryanair, topped the sites with the highest proportion of £50,000-plus visitors, both attracting half their visits from this wealthy economic group.

“It proves that even those with a higher income want to fly low-cost,” says Burmaster.

Geographically, the trends have remained stable, with London and the southeast the most active online, according to data from intelligence firm Hitwise.

For travel agencies as a sector – including pure online players and traditional companies – a quarter of all visits come from this region, with the northwest the next active with 13%. But there are interesting geographical variations when it comes to brands.

Lastminute.com gets 35% of its hits from London and the southeast –10 percentage points above the average – and Expedia 29%. Thomson on the other hand, receives only 18% of hits from the south with Thomas Cook also below average with 22%.

But where the traditional players are strong, particularly Thomson, is in the Midlands.

The region contributed 19% of Thomson’s hits, against Expedia’s and Lastminute’s 14%. Both Thomson and Thomas Cook are also stronger than their online rivals in Yorkshire. Both operators have regional flights from both these areas.

The same variations are seen in the airline sector. While commercial airlines overall receive 27% of their visits from London and the southeast, British Airways and Virgin attract 44% and 43% respectively.

East Anglia was strong for Ryanair, which has Stansted as one of its bases.

A question of class

There are stark social differences between visitors to online agencies and their traditional counterparts, according to research from Internet analysts Hitwise.

While the likes of Expedia and Lastminute.com attract a wealthier, well-educated audience, Thomson, First Choice and Thomas Cook are more reliant on families with little spare cash. The trends emerged following research by Hitwise which studied the behaviour of 11 social sectors known as the Mosaic Groups.

Comparing Expedia with First Choice, it revealed that social groups Symbols of Success and Urban Intelligence were strong for Expedia but a weakness for First Choice. “These groups are knowledgeable about the web and are active online,” says Hitwise UK head of research Heather Hopkins.

“Symbols of Success is the wealthiest segment – heads of corporations whose kids who have flown the nest. They have had broadband access for years and can identify with Expedia because they have been booking online for a long time.”

Urban Intelligence is categorised as those in their 20 or 30s and childless.

But Expedia’s weakness, the Happy Families group, is First Choice’s strength, along with Ties of Community and Blue Collar Enterprise.

“These groups are lower income families and are price sensitive. They don’t travel as much,” says Hopkins. She adds that Ties in the Community has a higher percentage of single parent families – a group traditional operators have been trying to target by dropping single supplement charges.

A weakness for Expedia and First Choice – and for travel as a whole – is Welfare Borderline.

Both also underperform in the Rural Isolation demographic. “This group will take three or more breaks a year but are not going to either First Choice or Expedia because they take more domestic holidays,” says Hopkins.

The Expedia view – David Roche

Looking at the web population in 2001, and again in 2005, I’m struck by the growth of the new entrants and the implications this may have for online travel businesses such as Hotels.com and Expedia.

TGI data covering the period from 2001/02 to 2004/05 shows that while the 25-34 age group’s Internet penetration grew just 31% (from 63% in 2001/02 to 83% by 2005), the statistic for the 55-64 group grew by 78% and the 65-plus group’s penetration grew by a whopping 136%. Moving to social class, the AB’s penetration grew only 13% in the period (showing how quickly this group had already moved online by 2001), while the C1C2 group grew 30% and the DE group grew 60% ? more than four times the AB growth.

So as the democratisation of the web continues, the online travel companies, such as Hotels.com, are seeing different customers, and large numbers of them ? the age cohorts from 55 upwards and from C1 to E clearly account for a significant proportion of the population.

These customers tend to have different needs to the products that online firms have offered to date, and have different service/usage expectations ? something that may well change the web for all of us.

It is an irony that just as websites are becoming more sophisticated in their offering, their fastest-growing new visitors are among the least sophisticated/web-experienced. This may have profound effects on site design, since designers cannot rely on well understood norms and a common web language ? something that could constrain innovation, and force powerful new features off the main page-flows.

To counter this, sites may need to adapt to each visitor’s experience. But this is something that relies on visitors being willing share information, potentially causing a loss of the anonymity that most web-users have come to expect.

From an industry perspective, offline travel agents and tour operators may find their core custom is dwindling faster than they expect ? relying on these groups to preserve their previous behavioural patterns could be a false hope. More of these customers are unbundling their travel, and opting for an EasyJet flight and accommodation from Hotels.com in contrast to their packaged holiday of yesterday.

In operations and supply too, many online firms will have to take account of different behaviour: credit-card penetration will be lower, so alternatives will have to be found. Fewer of these new customers will be willing at first to transact over the Internet, so the telephone’s importance will rise. And because clients can buy their travel in a new way means they will change where they wish to travel ? so firms that are heavy in city breaks, for example, will have to broaden their offering to include more Mediterranean destinations.

David Roche is vice president and managing director, Hotels.com and Expedia Private Label, Europe, Middle East and Africa.