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Travel Hotel Consumers: How Online Research Affects BookingsGoogle Compete

U.S., November 2010

Google Confidential and Proprietary 2

Background and Objectives

Background

• Online research influences both online and offline bookings. However, there remain challenges in quantifying the role of the online channel – whether via search, display, or non-advertising content –in driving bookings.

Objectives

• Assess the online and offline resources shoppers use when shopping for and booking travel as well as the relative importance of different resources

• Quantify the impact online research has on consumer purchase (both online and offline)

• Analyze differences between bookers who purchase online and bookers who purchase offline

Google Confidential and Proprietary

MethodologyRecruitment

• A survey was launched to Compete panelists who had researched hotels online between December 2009 and April 2010

• Surveys were fielded to 1,266 Compete panelists in April/May 2010 targeting consumers who completed and qualified for the survey under the following requirements:

– Respondents who indicated they had conducted online research for overnight accommodations at a hotel within the past six months

– Respondents indicated they researched for personal (non-business) travel

Significance Testing

• For 2-variable significance testing, two asterisks (**) indicates significance at the 95% level and one asterisk (*) indicates significance at the 90% level

• For multiple variable significance testing, uppercase letters indicate significance at the 95% level and lowercase letters indicate significance at the 90% level

• Base sizes under 30 were removed from the study and any base sizes between 30-50 marked as low sample

Searcher vs. Non-Searcher Segment Definition

• A “Searcher” is defined as a respondent who was search referred to a hotel supplier website or OTA hotel path within the 60 days prior to booking (based on observed online clickstream behavior and not self-reported)

3


Executive Summary

• Half of all hotel researchers indicated researching exclusively online

– Friends, families and colleagues were the most-used offline sources to learn about hotels

• Half of hotel shoppers reported using search engines in their research

– Online clickstream behavior indicated that a third hotel shoppers are referred by search to a hotel website

• Price was the leading reason for why consumers booked on a specific hotel website

– Receiving rewards/points was also a strong driver

• Higher costs per night and longer stays increased the length of time consumers spent researching hotels online

– The share of researchers using online sources also increased for longer hotel stays

• Nearly a third of hotel shoppers indicated viewing an online advertisement during their research process

• Booking online was the most dominant channel

– Only 1 in 6 bookers indicated booking over the phone or in person

• Hotel bookers are using fewer travel sites to conduct research than year-ago levels indicating more focused shopping activities

Source: Google/Compete Hotel Online/Offline Study, Nov 2010

Hotel Market Overview


1 in 3 hotel shoppers are referred to a hotel site by search. We see a bump up in search referral in summer months.

6

Aggregate Online Hotel Shoppers & % Search Referred to a Hotel Site(Volume of Hotel Shoppers & Share that were Search Referred to a Hotel Site, Jun 2009 – Jun 2010)

30M34M

31M

27M 25M23M 23M 23M

25M

30M27M

29M33M

31% 31%29%

28% 28%29% 28% 29%

31%30% 31% 31% 30%

0%

5%

10%

15%

20%

25%

30%

35%

0M

5M

10M

15M

20M

25M

30M

35M

40M

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Hotel Shoppers Share of Hotel Shoppers Referred by Search



3M4M

4M

3M3M

2M2M

2M

3M

3M3M

3M4M

24%26%

23% 23%24% 24%

23% 23%22% 22% 22% 22% 23%

0%

5%

10%

15%

20%

25%

30%

0.M

0.5M

1.M

1.5M

2.M

2.5M

3.M

3.5M

4.M


Hotel Bookers Share of Hotel Bookers Referred by Search

Search Consistently Drove Hotel Bookings

7

Aggregate Online Hotel Bookers & % Search Referred to a Hotel Site(Volume of Hotel Bookers & Share that were Search Referred to a Hotel Site, Jun 2009 – Jun 2010)



Google Referred One Quarter of All Shoppers

8

Share of Hotel Shoppers Search Referred by Google Search(Share of Online Hotel Shoppers, Jun 2009 – Jun 2010)

30M34M

31M

27M 25M23M 23M 23M

25M

30M27M

29M33M

24% 24%23%

22% 22%23% 23% 23%

24% 24% 24% 24% 23%

0%

5%

10%

15%

20%

25%

30%

0M

5M

10M

15M

20M

25M

30M

35M

40M


Hotel Shoppers Share of Hotel Shoppers Referred by Google



2022

20 20 2019

17 18

13 14 1416 16

0

5

10

15

20

25


Hotel Bookers More Focused Year-Over-Year

9

Sites Visited by Online Hotel Bookers(Average Travel Sites Visited Among Hotel Bookers Within the Month of Booking, Jun 2009 – Jun 2010)


Booker Channel Usage and Preferences


29%

16%

14%

14%

8%

8%

7%

7%

6%

3%

0% 5% 10% 15% 20% 25% 30% 35%

Family, f riends, or colleagues

800 or toll-f ree numbers

Magazines

Informational brochures or catalogs

TV

Travel agents

Newspapers

Travel groups

Books

Radio

Half of Shoppers Research Exclusively Online

11

Offline Hotel Research Resources Used by Online Hotel Shoppers(Share of Online Hotel Shoppers, n=1266)

S5. Thinking about the last hotel you researched, which of the following sources of information did you use in addition to the Internet, if any? Please select all that apply.Online hotel shoppers, n=1266

51% used no offline sources



Half of Researchers Use Search to Find Hotels

12

Online Hotel Research Resources Used by Online Hotel Shoppers(Share of Online Hotel Shoppers, n=1266)

Q1. Specifically, which of the following online sources did you use to research this hotel? Please select all that apply.Online hotel shoppers, n=1266

76%

61%

50%

30%

13%

13%

4%

4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Hotel websites

Online travel agency websites

Search engines

Travel review websites

Travel guide website

Travel-specif ic websites

Video sharing websites

Social networking websites



Online Sources Used More for Longer Stays

13

Online Hotel Research Resources Used by Online Hotel Shoppers(Share of Online Hotel Shoppers, n=1266)

Q1. Specifically, which of the following online sources did you use to research this hotel? Please select all that apply.Online hotel shoppers, n=1266

46%

2% 1%

51%

3% 3%

62%

13% 14%

Search engines Video sharing websites Social networking websites

1-2 Nights (n583) (A) 3-5 Nights (n520) (B) 6 Nights or More (n163) (C)

A

ABAB



29%

19%

15%

11%

8%

6%

5%

0% 5% 10% 15% 20% 25% 30% 35%

Online ad

TV ad

Magazine ad

Informational brochures or pamphlets

Newspaper ad

Billboard or outdoor ad

Radio ad

1 in 3 Researchers Recall Viewing Online Ads

14

Advertising Recalled by Online Hotel Shoppers(Share of Online Hotel Shoppers, n=1266)

Q3. In addition to all of the research that you did to learn about your most recently researched hotel, which of the following advertisements do you recall seeing or hearing, if any? Please select all that apply. Online hotel shoppers, n=1266.

*Online ad includes the following:•Online website ad: 22%•Paid search engine listings: 13%•Online video ad: 8%

*

53% do not recall any advertisements



83%

15%

2%

0%

20%

40%

60%

80%

100%

Total (n=892)

In person

Over the phone

Online

1 in 6 Researchers Booked Offline

15

Channel Used to Book Hotel(Share of Hotel Shoppers That Booked a Hotel in Q4, n=892)

Q5. How did you book this hotel? Please select one answer only.Online hotel shoppers who booked a hotel in Q4, n=892.

17% Booked Offline



1 in 5 Bookers Choose Site for Rewards/Points

16

Why Online Hotel Bookers Booked With Specific Site(Share of Online Hotel Bookers That Did Not Select “Other” in Q6, n=711)

Q9. Which of the following best describes why you booked this hotel on a/an [type of site]? Please select one answer only.Online hotel bookers, n=711.

34%

21%

12%

9%

5%

4%

4%

4%

3%

0% 10% 20% 30% 40%

Best prices

I received rewards/points

Good promotions and of fers

Easy to f ind hotels

I was able to view videos

Best selection

Able to book a package

Able to select hotels f rom a map

Able to read reviews by other travelers



61.4% 64.0%

26.6%26.5%

12.0% 9.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Searchers (n=391) Non-Searchers (n=1018)

Yes No, but plan to No, and do not plan to

Searchers as Likely to Book as Non-Searchers

17

Searchers vs. Non-Searchers That Booked a Hotel(Share of Total Respondents, n=1409)

Q4. Did you book your most recently researched hotel? Please select one answer only.Total respondents, n=1409; Searchers n=391, Non-Searchers n=1018.



85%

67%65%

0%

20%

40%

60%

80%

Under $75 Per Night (n=297) $75-$150 Per Night (n=676) $150+ Per Night (n=266)

Likelihood to Book Declines as Cost Increases

18

Hotel Bookers by Cost of Hotel Per Night(Share of Hotel Shoppers That Did Not Select “Not Sure” in Q24, n=1239)

Q4. Did you book your most recently researched hotel? Please select one answer only.Online hotel shoppers; Spent < $75 per night, n=297; spent $75-$150 per night, n=676; spent $150+ per night, n=266.

Read as: Of shoppers who researched hotels priced $150+

per night, 65% booked



Singles Most Certain About Hotel Choice

19

Certainty of What Hotel You Booked or Plan to Book(Share of Hotel Shoppers, n=1266, Top 2 Box)

Q10 - Which of the following best describes how certain you were about what hotel you would book or booked with at the beginning of your research? Online hotel shoppers, n=1266; single stay, n=196; couple stay, n=636; family stay, n=434. Significance testing does not include Total segment.

53%

60%

51%53%

0%

10%

20%

30%

40%

50%

60%

70%

Total (n1266) Single (n251) (A) Couple (n450) (B) Family (n173) (C)

B



19%27%

11% 9%

24%

31%

19%12%

21%

18%

26%

20%

15%

14%

18%

11%

21%

10%

27%

48%

0%

20%

40%

60%

80%

100%

Total (n892) 1-2 Nights (n452) (A) 3-5 Nights (n324) (B) 6 Nights or More (n115) (C)

2 Weeks or more

1 Week to less than 2 weeks

3 Days to less than 1 week

1 Day to less than 3 days

Less than 1 day

Research Time Increases with Length of Stay

20

Time Spent Researching Hotel Before Booking By Length of Stay(Share of Hotel Shoppers That Booked a Hotel in Q4, n=892)

Q25. How much time passed from when you first started researching for a hotel online to when you actually booked it? Please select one answer only. Online hotel shoppers who booked a hotel, n=892; 1-2 night stay, n=452; 3-5 night stay, n=324; 6+ night stay, n=115. Significance testing does not include Total segment.



19%23% 20%

8%

24%

31%

24%

18%

21%

15%

24%

21%

15%12% 17%

13%

21% 18% 16%

40%

0%

20%

40%

60%

80%

100%

Total (n892) < $75 (n251) (A) $75-$150 (n450) (B) $150+ (n173) (C)

2 Weeks or more

1 Week to less than 2 weeks

3 Days to less than 1 week

1 Day to less than 3 days

Less than 1 day

C

a

AB

CC

Higher Costs Increased Research Time

21

Time Spent Researching Hotel Before Booking By Cost Per Night(Share of Hotel Shoppers That Booked a Hotel in Q4, n=892)

Q25. How much time passed from when you first started researching for a hotel online to when you actually booked it? Please select one answer only.Online hotel shoppers who already booked a hotel, Total n=892, Significance testing does not include Total segment.



Summary

• Half of all hotel researchers indicated researching exclusively online

– Friends, families and colleagues were the most-used offline sources to learn about hotels

• Half of hotel shoppers reported using search engines in their research

– Online clickstream behavior indicated that a third hotel shoppers are referred by search to a hotel website

• Price was the leading reason for why consumers booked on a specific hotel website

– Receiving rewards/points was also a strong driver

• Higher costs per night and longer stays increased the length of time consumers spent researching hotels online

– The share of researchers using online sources also increased for longer hotel stays

• Nearly a third of hotel shoppers indicated viewing an online advertisement during their research process

• Booking online was the most dominant channel

– Only 1 in 6 bookers indicated booking over the phone or in person

• Hotel bookers are using fewer travel sites to conduct research than year-ago levels indicating more focused shopping activities


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