Are the heady days of U.S. online travel over?
Not by a long stretch, but a new PhoCusWright research report, U.S. Online Travel Overview, Eleventh Edition, suggests that the U.S. "online [travel] market is maturing."
In other words, the percentage of travel in the U.S. booked online currently stands around 39% and will modestly inch upwards to just 40% in 2013, PhoCusWright projects.
"After years of unabated growth, online sales are practically in sidestep with the total market, growing only slightly faster on the strength of continued share shift from offline to online channels," the report says.
Faced with this online travel market maturation -- or saturation -- in the U.S., it's little wonder that major U.S.-based OTAs, including Priceline (Booking.com and Agoda) and Expedia (Expedia, Hotels.com and Venere), have designs on Europe, APAC and Latin America.
For example, in the third quarter of 2011, nearly 80% of the Priceline Group's gross bookings occurred outside the U.S.
Turning to perennial online travel agency-supplier channel skirmishes in the U.S., the PhoCusWright study says suppliers in 2011 have secured a 62% share of the leisure/unmanaged online travel market compared with a 38% hold by the OTAs.
"Most of the shift is due to the strength of airline websites, which will represent 72% of all online air bookings by 2012," PhoCusWright says.
These gains come as some U.S. airlines, such as Delta Air Lines, for example, have been putting lots of resources into improving the online booking experience.
And airline websites have been gaining share despite the fact that major OTAs sought to level the playing field by eliminating their booking fees on airline tickets a couple of years ago.
While leisure travel demand in the U.S. is relatively soft, the comeback of managed and unmanaged business travel in the last two years catapulted supplier websites, as well as traditional travel agencies and travel management companies, ahead of OTAs in 2011, PhoCusWright says, although the business travel advantage may evaporate in 2012.
The report also contains an interesting finding about online travel penetration by region of the world.
"The U.S. lead in online penetration has come to an end," PhoCusWright says.
Online travel penetration in leisure/unmanaged business travel, measured in percentage of gross bookings, stood at around 39% in the U.S. in 2009 compared to around 32% for Western Europe, according to the study.
But, by 2013, Western Europe would lead the U.S. 41% to 40%, the study projects.
The 2011 numbers for online travel penetration, according to the study, look like this: U.S. (39%), Western Europe (38%), Asia-Pacific (23%) and Latin America (18%).
It is interesting that online penetration in Asia-Pacific as a whole is still relatively low at 23%, despite strides in mobile adoption.
One of the report's authors, Douglas Quinby, senior director of research, explains that "mobile is happening" in various APAC countries, although adoption varies widely by country and doesn't necessarily represent smartphone adoption.
Increased smartphone adoption in APAC would assuredly boost the region's online travel penetration numbers in the coming years.
Disclosure: Dennis Schaal occasionally does freelance work for PhoCusWright.