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Hitwise Intelligence - Robin Goad - UK

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Economic downturn benefits budget travel and cruises

October 29, 2008

UK Internet traffic to travel websites fell by 4.6% between September 2007 and September 2008, but certain sectors are thriving despite, or in some cases because of, the squeeze on household budgets. UK Internet visits to a Hitwise custom category of budget travel firms increased by 5.3% between September 2007 and 2008. The top 10 budget travel companies in the UK accounted for 7.1% of traffic to Travel websites in September 2008, up from 6.4% the previous year.

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EasyJet had the most popular budget travel website in the UK during September, accounting for 1.7% of UK Internet visits to travel websites, while Travelodge’s was the fastest growing. The hotel chain, which recently announced plans to open 22 new hotels before Christmas, experienced a 38% increase in UK Internet visits between September 2007 and 2008.

Each of the top three budget travel websites in the UK – EasyJet, Ryanair and Travelodge – has experienced at least a 20% increase in UK Internet traffic over the last 12 months. This online growth is also reflected offline; in addition to Travelodge’s expansion, both EasyJet and Ryanair announced significant increases in passenger numbers in their latest results. However, the big challenge for travel providers is to monetize these traffic increases in the face of falling prices and rising costs.

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The proportion of visitors to Travel websites aged 45 and over increased from 39.8% in September 2007 to 45.2% in September 2008. Internet users aged 55+ now account for 27.3% of UK Internet visitors to Travel websites, making them the largest group of visitors to the industry. The over 45s are the fastest growing demographic for Travel websites, and their tastes are different from younger Internet users. They are more likely to book through agencies than go directly to airline or hotel websites.

However, the section of the online travel industry that most over-indexes with older Internet users is Cruises. Almost 60% of visitors to Cruise websites are aged 55+, with a further 16% coming from the 45-54 age group. UK Internet visits to Cruise websites, which typically peaks in December, increased by 8.2% between September 2007 and September 2008. Demographics are playing a role in the growth of the cruise sector online, but the economic downturn is also having an impact. As we pointed out in the summer, people are searching for all inclusive deals as a way of saving money, and cruises provide UK travellers with one way of achieving this.

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During the 12 weeks ending 25/10/08, the Caribbean was the most searched for cruise destination amongst UK Internet users. The next most popular destination was Norway, followed by the Nile, the Mediterranean and Alaska. During September, P&O Cruises was the most visited cruise website in the UK, receiving one in every ten visits to the category.

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