tbf 2011- patricia rasore: “analizing the emerging online travel market in latin america”

Tying Latin America to the World

May 5, 2011 Tourism Branding Forum

Patricia RasoreDirector, Latin America

Latin America: evolving from being

peripheral to a powerful player in its own right.

© 2011 PhoCusWright Inc. All Rights Reserved. 3

Research Revelations

Online growth varies widely among markets and segments; though airline websites lead, hotels and

OTAs are biggest opportunities

Online bookings are growing at more than three times the pace of the overall market – and soon will

represent one fifth of all travel sales

Urban consumers, the new middle class (275M people), are fueling the travel industry - US$10 billion in new

sales projected in two years

Market Sizing


PollingQuestion #1

What was the size of the Latin America travel market in 2010?

a. $39 Billionb. $58 Billionc. $72 Billiond. $85 Billion


2008 2009 2010 2011 20120

10000200003000040000500006000070000

3,759.1 4,194.2 6,023.4 7,750.8 9,429.1972.6 1,412.3 2,178.7 3,426.7 4,947.8

50,665.346,667.6

49,798.151,609.2

53,721.6

Supplier Website OTA Offline Bookings

55.952.3

58.062.8

68.1

Online Penetration 9% 11% 14% 18% 21%

Online Growth 19% 46% 36% 29%

The Latin American Online Leisure/Unmanaged Business Travel Market, Total Gross Bookings (US$B), Online Growth and Penetration, 2008-2012

Source: PhoCusWright's Latin America Online Travel Overview, 2011


Four Regions: Total and Online Leisure/Unmanaged Business Travel Gross Bookings and Online Penetration, 2009-2012 (US$B)

Note: 2010-2012 projected.Source: PhoCusWright’s Global Online Travel Overview Second Edition, 2011

2012

2011

2010

2009

313

284

256

227

Total Online Other Channels

804

861

910

964

28%

30%

31%

33%

Total Gross Bookings

+5.9%

+5.7%

+7.1%

+10.2%

+11.3%

+12.7%

OnlinePenetration


Market Share by Region, 2010


Europe34%

U.S.30%

APAC30%

LATAM7%

2010

Europe38%

U.S.38%

APAC21%

LATAM3%

2010Total Online


Market Share by Region, 2012


Europe37%

U.S.36%

APAC23%

LATAM5%

Total2012

Online2012

Europe33%

U.S.30%

APAC30%

LATAM7%


PollingQuestion #2

What country boasts the largest online penetration?

a. Mexicob. Brazilc. Perud. Chile


Mexico Brazil Argentina Colombia Peru Chile Rest LATAM

-

4,000

8,000

12,000

16,000

20,000

24,000

1,698.0 2,564.3826.0

918.7

11,564.9

19,870.7 Supplier Website OTA

Offline Bookings14.1

23.4

4.52.9

1.3 2.2

9.6

Online Penetration 18% 15% 9% 10% 10% 30% 8%

Online Growth 33% 45% 86% 93% 83% 57% 56%

Online Leisure/Unmanaged Business Travel Market, Total Gross Bookings (US$B), Online Growth and Penetration, for All Analyzed Countries in 2010



Mexico Brazil Argentina Colombia Peru Chile Rest LATAM

-

5,000

10,000

15,000

20,000

25,000

30,000

2,369.3 4,017.31,627.42,210.0

11,138.9

22,283.6

Supplier Website OTA

Offline Bookings15.1

5.23.3

1.6 2.7

11.7

28.5

Online Penetration 26% 22% 16% 18% 15% 41% 12%

Online Growth 25% 28% 42% 26% 40% 29% 35%

Online Leisure/Unmanaged Business Travel Market, Total Gross Bookings (US$B), Online Growth and Penetration, for All Analyzed Countries in 2012



Online Gross Bookings Is Not the Only IndicatorOnline Leisure/Unmanaged Travel Gross Bookings by Market (US$B), 2010

Note: 2010 projected.Source: PhoCusWright’s Global Online Travel Overview Second Edition, 2011

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$120 ~


U.S.

U.K.Japan

Germany

France ANZ

Scandinavia

Spain

ChinaIta

lyIndia

Brazil

Mexic

o

Singapore

Chile

Argentina

ColombiaPeru

-10%

0%

10%

20%

30%

40%

50%

60%

Highest Growth Rates are Found in the Latin American RegionOnline Leisure/Unmanaged Business Travel Gross Bookings Average Annual Growth Rate by Market, 2010-2012

Note: 2010-2012 projected. Growth percentages for European markets are based on euros to be more reflective of actual trends.Source: PhoCusWright’s Global Online Travel Overview Second Edition, 2011


U.S.

U.K.Japan

Germany

France ANZ

Scandinavia

Spain

ChinaIta

lyIndia

Brazil

Mexic

o

Singapore

Chile

Argentina

ColombiaPeru

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Pockets of Opportunity Lies Where Penetration is Below 35%Online Leisure/Unmanaged Business Travel Penetration by Market, 2012


Intermediaries


Attributes

Retail travel agencies retain their stature


Latin American Online Travel Market (Leisure/Unmanaged Business); Direct Gross Bookings by Segment (US$M), 2008-2012


2008 2009 2010 2011 20120

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

3,3513,620

5,173

6,461

7,594

9731,412

2,179

3,427

4,948

337 480715

1,0991,576

64 79 98 124 1588 15 37 67 102

Airline WebsiteOTAHotel WebsiteTour Operator WebsiteCar Rental Website


Latin American Total OTA Travel Market, OTA Shares (%), 2010 vs. 2012

Note: Figures may not total 100% due to rounding.Source: PhoCusWright's Latin America Online Travel Overview, 2011

31%

13%

10%2%

45%

2010Despegar.com

Priceline/Booking

Expedia Brands

Travelocity

Other OTAs

24%

16%

12%

3%

46%

2012

Main areas of investment for Global OTAs in Latin America: Local languagePayment optionsLocal content


The Two Biggest OTAs in Mexico and Brazil in 2010


Decolar.com.brSubmarinoviagens.com.br

BestDay.comDespegar.com

Airlines


Latin American Airlines: “Simply the Best”

Increases in demand as well as in efficiency

Expected to continue enjoying a virtuoso moment



Latin American Airline Total Gross Bookings (US$B) and Supplier Website Penetration (%), 2008-2012


2012

2011

2010

2009

2008

26.1%

24.3%

21.1%

17.2%

16.2%

29.1

26.7

24.6

20.9

23.4

Supplier Website Total Gross Bookings


Total Latin American Airline Market, LCC vs. Traditional Airline Shares (%), 2010 vs. 2012

Note: Figures may not total 100% due to rounding.Source: PhoCusWright's Latin America Online Travel Overview, 2011

69%

31%

2010

Traditional Air-lines

LCCs

66%

34%

2012

Lodging


PollingQuestion #3

What percentage of hotels in Latin America are affiliated with global chains?

a. 11%b. 30%c. 47%d. 68%


Lodging


Lodging represents 44% of total travel market but only 15% of

online market

Low online penetration

Early stages of revenue management practices in

local/national markets


Latin American Hotel Gross Bookings (US$B) and Supplier Website Penetration (%), 2008-2012


2012

2011

2010

2009

2008

5.4%

4.0%

2.7%

2.1%

1.2%

29.4

27.3

25.6

24.2

25.7

Supplier Website Total Gross Bookings

Latin America: What´s Now, What´s Next


Latin America: What’s Now, What’s Next

Demand for travel technology solutions accelerates

20% smartphone penetration critical mass to be reached by year end


Latin America: Having a Mobile Strategy (Whether It’s App or Mobile Web Led) is Now More Important Than Ever

Source: International Telecommunication Union, 3G Americas, Bernstein Research

Brazil: sixth largest

worldwide market in

mobile

Latin America: among the

most “mobile” regions in

world(3 units/PC)

Mobile in Brazil: second

most expensive in

world

Mobile momentum in emerging and faster growing

economies


U.S.: A Golden Opportunity to Reach Consumers During the Mobile Trip Research Phase

Source: eMarketer, February 2011

Mobile travel related activity

will grow to 34% in 2012, from 30% in

2010

12M will book a travel

product in 2011

Mobile travel research will continue at a steady pace

One third of smartphone

users will research a trip in 2011 (25M)


Latin America: What’s Now, What’s Next

Demand for travel technology solutions accelerates

20% smartphone penetration critical mass to be reached by end of 2011

Biggest opportunity in online media is social media


Influence of Travel Information Sources, by Membership in Online Social Networks

Source: PhoCusWright's Traveler Technology Survey, 2010

Printed advertising

Printed publications, articles or brochures

Calls to travel providers, such as airlines and hotel companies

Information in printed travel guidebooks

Online advertising

Personal recommendations from friends/family

% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Average

Users of online social networks

Non-users of online social networks


Social Media Networks Are Not Direct Commerce Platforms

Share of Upstream Traffic- Brazil – March 2011

From/To Travel Accommodations Agencies Airlines Car Rentals Non-Transactional

Social Networks 5.46% 3.97% 5.34% 6.41% 2.83% 4.80%

Search 41.86% 44.58% 40.57% 31.24% 46.44% 57.61%

Email 5.99% 5.22% 5.22% 9.10% 3.46% 3.36%

News and Media 1.64% 1.11% 1.07% 1.92% 1.68% 2.55%

Portal Homepages 3.76% 1.83% 1.74% 6.50% 4.47% 4.68%

Social networks are already a much larger source of traffic than news and media sites, and that gap will only grow larger

Source: PhoCusWright Inc.

•Latin America had a shallow recession

•Expanded consumer market across the region

•Expansion of intra-regional business

•Travel technology adoption still lags

•Conversion is delayed

•Personalization and innovation should be areas to explore

Expanded consumer market across the region

Foster business innovation to capture dynamics of the new

online audience

Related Release:

PhoCusWright’s Latin America Online Travel Overview

Go to www.phocuswright.com for more information!

Thank you

tbf 2011- patricia rasore: “analizing the emerging online travel market in latin america”

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