State of the Nation – Consumer satisfaction report

Lorien Research tracks the experiences of travel consumers using the Internet. Sarah Smalley and Pat Meakin report.

There are very few consumers and business people left who continue to deny or doubt the power of the Internet on modern business.

The web has dramatically transformed the retail experience – particularly in the travel industry – and subsequently altered how consumers either search for products or interact with their favourite brands.

Consumers are empowered more than ever before to make quick decisions based on what they can find online and how they are dealt with by travel websites.

In a major study conducted by Lorien Research, we discovered nine out of 10 respondents use the web to gather travel and holiday information; seven out of 10 use it to make bookings, but only five out of 10 claim the online channel is their preferred method of booking holiday packages.

In the online poll, participants were asked to comment on their behaviour, perception and attitude when collecting information and booking long and short breaks.

The survey considered holiday packages, travel services, accommodation, car hire and travel insurance.

With an estimated 25 million home Internet users in the UK – 80% with broadband connectivity – online shopping is no longer a minority option, as the results from this survey confirm.

The use of the Internet for researching travel options by survey respondents is almost universal with nine out of 10 using the channel in this way. Encouragingly for those providing travel services through the web, 80% of these ‘holiday surfers’ make bookings when online – though unfortunately not every time.

To those who book package holidays online, the main benefits of this remote channel compared to, for example, a high-street agency relate to convenience, flexibility and value.

The 24/7 availability is the clearest example of convenience.  Some 94% of those booking online agree constant availability is a benefit of this channel over alternatives.

Appreciation of its flexibility is apparent through the level of agreement that online buyers have with statements relating to the ability of users to ‘design’ their own holidays and the availability of late deals. More than three quarters (78%) feel it is easier to ‘design’ holidays online and almost two-thirds (63%) believe that better late deals are available.

There are, of course, those who trawl the Internet for travel information without making bookings (17% of respondents).

They see advantages in the online channels, but have less strong opinions than those who make bookings.

For example, 83% of these respondents agree that it is easier to make price comparisons online than when using other channels and 62% agree that a wider range of options are available online – the equivalent figures from online buyers are 93% and 84% respectively.

Even those who do make bookings have reservations about the suitability of making certain online travel purchases. Fewer than half (48%) believe it easier to book complex holiday itineraries online and just over a third (36%) that better quality holiday packages are available.

Concerns are broader among those who only use the Internet for information gathering. A significant minority feel that hidden charges will be incurred (23%), that the Internet is not secure (15%), that the process is too complicated (12%) and that prices quoted online are untrustworthy (10%).

A simplification of the processes involved in booking, and efforts to clarify and make pricing structures and policy more transparent, should convert some of the information gatherers into holiday bookers – particularly where complex itineraries are involved.

But – be aware of online holiday purchasers’ Internet promiscuity… Of those who prefer to book travel packages via the Internet nearly two thirds do not have a preferred provider.  An easy-to-use site with transparent pricing structures may help to convert information gatherers into buyers, but it does not guarantee loyalty.

Outside the package holiday environment this sort of promiscuity is even more prevalent. Around three quarters of those who prefer to make component bookings via the Internet (travel only, accommodation only, car hire or travel insurance) do not have preferred suppliers.

There is little evidence to suggest that such promiscuity has come about as a result of problems with, or complaints about, site usage. Just 3% of all respondents reported having had any complaint to make in the past 12 months.

The survey results strongly intimate that holiday surfers are bargain-hungry buyers who will seek the deals rather than return to familiar ground.

Recommendations from friends, rather than advertising, is by far and away the most likely catalyst to prompt visits to previously untried travel sites.

Sarah Smalley is business development director and Pat Meakin is research director at Lorien Research.

Matt Cheevers Teletext Holidays, online commercial director

How do you provide consumers with the confidence to book online and offer the right balance between content and product? These are some of the biggest issues facing the online travel industry at present, and this research certainly reinforces that.

Many online companies provide consumers with as much ‘social networking’ content as possible, combined with offering a wide range of products. This approach seems to follow the theory that we give the customer everything they could possibly want and let them choose what information they want to use. In reality, this means that many websites have too much content, poor navigation and by trying to offer everything succeed in delivering nothing.

The right approach must be to invest time in understanding which section of the market you want to appeal to and deliver a much more targeted message. This is the only way to improve conversion rates and ensure customers revisit your website.

Guest editor David Soskin, Cheapflights

What a difference the past 10 years have made to the way consumers purchase holidays.

This study shows just how much effect the Internet has had on British consumers buying holidays – with 90% using it to gather holiday information and half the respondents now preferring web booking. The bad news for online providers is that there is little consumer loyalty.

To generate loyalty, sites will need to be designed more effectively and pricing needs to be much more transparent. This will encourage repeat users.

Fascinatingly, this research shows that the ‘easy solution’ of massive advertising is not the answer as word of mouth is the biggest encouragement. When was the last time you saw a TV advert for Google or a radio jingle for YouTube?

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