Full North American Online Travel Report 2009

North American
Online Travel Report 2009

EyeforTravel Research
7-9 Fashion Street
London
E1 6PX
UK

For queries contact:
amy@eyefortravel.com
www.eyefortravelresearch.com

EyeforTravel Ltd, April 2009

2
© EyeforTravel Research. All rights reserved.

North America Online Travel Report 2009

Table of Contents
Table of Contents

List of Figures 5
Methodology 14
Executive Summary 19

Chapter 1: North American Travel Market Overview 31

North American Travel Market Overview 31
US vs. Canada Travel Market Analysis 51
US Travel Market Analysis 59
Canadian Travel Market Analysis 68

Chapter 2: Online Market Infrastructure and Consumer Insight Overview 77

Internet Penetration 77
The Use of Electronic Payment Cards 78
Outbound Destinations 82

Chapter 3: North American Travel Sector Analysis 85

3.1 Airline Sector 85

US Airline Market Analysis 91
Canadian Airline Market Analysis 102

3.2 Hotel Sector 119

US Hotel Market Analysis 127
Canadian Hotel Market Analysis 138

3.3 Car Rental Sector 149

US Car Rental Market Analysis 158
Canadian Car Rental Market Analysis 169

3.4 Rail Sector 180

US Rail Market Analysis 185
Canadian Rail Market Analysis 188

3

Table of Contents

3.5 Cruise Sector 192

US Cruise Market Analysis 197
Canadian Cruise Market Analysis 206

3.6 Bus Sector 213

US Bus Market Analysis 217
Canadian Bus Market Analysis 221

3.7 Package Sector 226

US Package Market Analysis 233
Canadian Package Market Analysis 243

Chapter 4: Online Travel Agent (OTA) Sector Analysis 253

North American OTA Market Overview 253
US OTA Market Analysis 260
Canadian OTA Market Analysis 270

4


List of Figures
List of Figures
Figure 1.1: North America Total Volume of Travel, 2002-2012F 31
Figure 1.2: North America Volume of Travel - Domestic vs. Outbound (%), 2002-2012F 31
Figure 1.3: North America Volume of Domestic Travel, 2002-2012F 32
Figure 1.4: North America Volume of Outbound Travel, 2002-2012F 32
Figure 1.5: North America Travel Market Gross Value, 2002-2012F 33
Figure 1.6: Spend per Trip in US$ (North America), 2002-2012F 33
Figure 1.7: North American Travel Market - Sector Breakdown (US$), 2002-2012F 34
Figure 1.8: North American Travel Market - Sector Breakdown (%), 2008 34
Figure 1.9: North American Travel Market - Sector Breakdown (%), 2002-2012F 35
Figure 1.10: North American Travel Market - Y-o-Y Growth by Sector, 2002-2012F 36
Figure 1.11: North American Travel Market - CAGR by Sector, 2002-2007 and 2008-2012F 36
Figure 1.12: Online Penetration of the North American Travel Market, 2002-2012F 37
Figure 1.13: Value of North American Travel Market - Online vs. Offline, 2002-2012F 38
Figure 1.14: Sector Breakdown of North American Online Travel Market (%), 2008 39
Figure 1.15: Sector Breakdown of North American Online Travel Market (%), 2002-2012F 39
Figure 1.16: North American Online Travel Market - CAGR by Sector, 2002-2007 and 2008-2012F 40
Figure 1.17: Online/Offline Distribution Values - North American Airline Market, 2002-2012F 41
Figure 1.18: Online/Offline Distribution Values - North American Hotel Market, 2002-2012F 41
Figure 1.19: Online/Offline Distribution Values - North American Car Rental Market, 2002-2012 41
Figure 1.20: Online/Offline Distribution Values - North American Bus Market, 2002-2012F 42
Figure 1.21: Online/Offline Distribution Values - North American Cruise Market, 2002-2012F 42
Figure 1.22: Online/Offline Distribution Values - North American Railway Market, 2002-2012F 42
Figure 1.23: Online/Offline Distribution Values - North American Package Market, 2002-2012F 43
Figure 1.24: Value of the North American Travel Market - Domestic vs. Outbound, 2002-2012F 43
Figure 1.25: North American Travel Market - Domestic vs. Outbound (%), 2008 44
Figure 1.26: North American Travel Market - Domestic vs. Outbound (%), 2002-2012F 44
Figure 1.27: North American Travel Market - Y-o-Y Growth Domestic vs. Outbound (%),
2002-2012F 45
Figure 1.28: Spend per Trip (North America Averages) - Domestic vs. Outbound, 2002-2012F 45
Figure 1.29: North American Online Travel Market - Domestic vs. Outbound (%), 2002-2012F 46
Figure 1.30: North American Online Travel Market - Domestic vs. Outbound (%), 2008 47
Figure 1.31: Value of the North American Online Travel Market - Domestic vs. Outbound,
2002-2012F 47
Figure 1.32: North American Online Travel Market - Y-o-Y Growth Domestic vs. Outbound (%),
2002-2012F 47
Figure 1.33: North American Domestic Online Travel Market - Sector Breakdown (%), 2002-2012F 48
Figure 1.34: North American Domestic Online Travel Market - Sector Breakdown (%), 2008 49
Figure 1.35: North American Domestic Online Travel Market - Sector Breakdown Values (US$),
2002-2012F 49
Figure 1.36: North American Outbound Online Travel Market - Sector Breakdown (%), 2002-2012F 50
Figure 1.37: North American Outbound Online Travel Market - Sector Breakdown (%), 2008 50
Figure 1.38: North American Outbound Online Travel Market Value - Sector Breakdown (US$),
2002-2012F 50
Figure 1.39: US vs. Canada Total Volume of Travel, 2002-2012F 51
Figure 1.40: US vs. Canada Total Volume of Travel (%), 2002-2012F 52
Figure 1.41: US Volume of Domestic Trips, 2002-2012F 52
Figure 1.42: US Volume of Outbound Trips, 2002-2012F 53
Figure 1.43: Canada Volume of Domestic Trips, 2002-2012F 53
Figure 1.44: Canada Volume of Outbound Trips, 2002-2012F 53
Figure 1.45: Value of the North American Travel Market - US vs. Canada, 2002-2012F 54
Figure 1.46: North American Travel Market - US vs. Canada (%), 2002-2012F 55
Figure 1.47: Average Spend per Person per Trip - US and Canada, 2002-2012F 55
Figure 1.48: North American Online Travel Market - US vs.Canada (%), 2002-2012F 56
Figure 1.49: Value of the North American Online Travel Market, US vs. Canada, 2002-2012F 56
Figure 1.50: Online Penetration Comparison of the US and Canadian Gross Travel Markets,
2002-2012F 57
Figure 1.51: Online Penetration of the US Gross Travel Market, 2002-2012F 58

5

List of Figures

Figure 1.52: Online Penetration of the Canadian Gross Travel Market, 2002-2012F 58
Figure 1.53: Value of the US Gross Travel Market, 2002-2012F 59
Figure 1.54: Value of the US Online Travel Market, 2002-2012F 59
Figure 1.55: US Travel Market - Domestic vs. Outbound (%), 2002-2012F 60
Figure 1.56: Value of US Gross Travel Market - Domestic vs. Outbound, 2002-2012F 61
Figure 1.57: Outbound Travel Destination Trends, 2002-2012F 62
Figure 1.58: Value of US Online Travel Market - Domestic vs. Outbound, 2002-2012F 62
Figure 1.59: US Online Travel Market - Domestic vs. Outbound (%), 2002-2012F 63
Figure 1.60: Online Penetration Comparison of US Domestic and Outbound Travel Markets,
2002-2012F 63
Figure 1.61: US Travel Market - Sector Breakdown (%), 2002-2012F 64
Figure 1.62: US Travel Market - Sector Breakdown (%), 2008 65
Figure 1.63: US Travel Market - Sector Breakdown (US$), 2002-2012F 65
Figure 1.64: US Travel Market - Y-o-Y Growth by Sector, 2002-2012F 65
Figure 1.65: US Online Travel Market - Sector Breakdown (%), 2002-2012F 66
Figure 1.66: US Online Travel Market - Sector Breakdown (%), 2008 66
Figure 1.67: US Online Travel Market - Sector Breakdown (US$), 2002-2012F 67
Figure 1.68: US Online Travel Market - Y-o-Y Growth by Sector, 2002-2012F 67
Figure 1.69: Sector Online Penetration, 2002-2012F 67
Figure 1.70: Value of the Canadian Gross Travel Market, 2002-2012F 68
Figure 1.71: Canadian Travel Market - Domestic vs. Outbound (%), 2002-2012F 69
Figure 1.72: Value of the Canadian Travel Market - Domestic vs. Outbound, 2002-2012F 69
Figure 1.73: Value of the Canadian Online Travel Market, 2002-2012F 70
Figure 1.74: Canadian Online Travel Market - Domestic vs. Outbound (%), 2002-2012F 71
Figure 1.75: Online Penetration Comparison of Domestic and Outbound Canadian Travel Market,
2002-2012F 71
Figure 1.76: Value of the Canadian Online Travel Market – Domestic vs. Outbound, 2002-2012F 72
Figure 1.77: Canadian Travel Market - Sector Breakdown (%), 2002-2012F 73
Figure 1.78: Canadian Travel Market - Sector Breakdown (%), 2008 73
Figure 1.79: Canadian Travel Market - Sector Breakdown (CAD $), 2002-2012F 74
Figure 1.80: Canadian Travel Market - Y-o-Y Growth by Sector, 2002-2012F 74
Figure 1.81: Canadian Online Travel Market - Sector Breakdown (%), 2002-2012F 75
Figure 1.82: Canadian Online Travel Market - Sector Breakdown (%), 2008 75
Figure 1.83: Sector Online Penetration, 2002-2012F 76
Figure 1.84: Canadian Online Travel Market - Y-o-Y Growth by Sector, 2002-2012F 76
Figure 1.85: Canadian Online Travel Market - Sector Breakdown (CAD $), 2002-2012F 76
Figure 2.1: Internet User Penetration - US vs. Canada (%), 2000-2007 77
Figure 2.2: Total Volume of Internet User - US vs. Canada, 2000-2007 77
Figure 2.3: Broadband Subscriber Penetration - US vs. Canada (%), 2000-2007 78
Figure 2.4: Financial Cards per Capita US vs. Canada, 2000-2007 78
Figure 2.5: US Travel Payment Methods, 2007 79
Figure 2.6: “I don’t like Giving out my Credit Card Number or Personal Information Online” 80
Figure 2.7: Canadians that Have Ordered the Following Products Online in the Last 12 Months,
2005 and 2007 81
Figure 2.8: Consumer Confidence Index US vs. Canada, 2002-2008 81
Figure 2.9: Most Popular Outbound Destinations for US Travellers, 2006-2007 82
Figure 2.10: Most Popular Outbound Destinations for Canadian Travellers, 2006-2007 82
Figure 2.11: Top US States by Canadian Visits, 2007 83
Figure 2.12: Canadian Traveller Spending by US State, 2007 83
Figure 3.1.1: Value of the North American Airline Market, 2002-2012F 85
Figure 3.1.2: Online Penetration of the North American Airline Market, 2002-2012F 85
Figure 3.1.3: Value of North American Airline Market - Online vs. Offline, 2002-2012F 86
Figure 3.1.4: North American Online Airline Market as % of Total North American Online Travel
Market 86
Figure 3.1.5: Value of the North American Online Airline Market Value, 2002-2012F 87
Figure 3.1.6: North American Airline Market - Domestic vs. Outbound (%), 2002-2012F 87
Figure 3.1.7: Value of North American Gross Airline Market - Domestic vs. Outbound, 2002-2012F 88
Figure 3.1.8: North American Online Airline Market - Domestic vs. Outbound (%), 2002-2012F 88
Figure 3.1.9: Value of North American Online Airline Market - Domestic vs. Outbound, 2002-2012F 89
Figure 3.1.10: North American Online Airline Market - US vs. Canada (%), 2002-2012F 89

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List of Figures
Figure 3.1.11: Value of North American Online Airline Market - US vs. Canada, 2002-2012F 90
Figure 3.1.12: Online Penetration Comparison of North American, US and Canadian Airline Markets,
2002-2012F 90
Figure 3.1.13: US Airline Market - Domestic vs. Outbound (%), 2002-2012F 91
Figure 3.1.14: Value of US Domestic Airline Market, 2002-2012F 91
Figure 3.1.15: US Domestic Airline Market - Traditional Airlines vs. Low Cost Carriers (%), 2002-2012F 92
Figure 3.1.16: Value of the US Domestic Airline Market - Traditional Airlines vs. Low Cost Carriers,
2002-2012F 92
Figure 3.1.17: Online Penetration of the US Airline Market, 2002-2012F 93
Figure 3.1.18: Value of the US Airline Market - Online vs. Offline, 2002-2012F 94
Figure 3.1.19: Online Penetration Comparison of Total, Domestic and Outbound US Airline Markets,
2002-2012F 95
Figure 3.1.20: Online Penetration of the US Domestic Airline Market, 2002-2012F 95
Figure 3.1.21: Online Penetration of the US Outbound Airline Market, 2002-2012F 95
Figure 3.1.22: Value of the US Online Airline Market - Domestic vs. Outbound, 2002-2012F 96
Figure 3.1.23: Value of the US Domestic Airline Market Value - Online vs. Offline, 2002-2012F 96
Figure 3.1.24: US Domestic Online Airline Market - Online Penetration of Traditional Airlines and
Low Cost Carriers, 2002-2012F 97
Figure 3.1.25: US Domestic Online Airline Market - Traditional Airlines vs. Low Cost Carriers (%),
2002-2012F 97
Figure 3.1.26: US Domestic Online Airline Market Value - Traditional Airlines vs. Low Cost Carriers,
2002-2012 98
Figure 3.1.27: Value of the US Outbound Airline Market - Online vs. Offline, 2002-2012F 98
Figure 3.1.28: US Online Airline Market - Direct vs. Indirect Distribution (%), 2002-2012F 99
Figure 3.1.29: Value of the US Online Airline Market - Direct vs. Indirect Distribution, 2002-2012F 99
Figure 3.1.30: US Domestic Online Airline Market - Direct vs. Indirect Distribution, 2002-2012F 100
Figure 3.1.31: US Outbound Online Airline Market - Direct vs. Indirect Distribution, 2002-2012F 100
Figure 3.1.32: US Outbound Online Airline Market - Direct vs. Indirect Distribution (%), 2002-2012F 101
Figure 3.1.33: Value of the Canadian Gross Airline Market, 2002-2012F 102
Figure 3.1.34: Canadian Airline Market - Domestic vs. Outbound (%), 2002-2012F 103
Figure 3.1.35: Value of the Canadian Airline Market - Domestic vs. Outbound, 2002-2012F 103
Figure 3.1.36: Canadian Domestic Airline Market - Traditional Airlines vs. Low Cost Carriers (%),
2002-2012F 104
Figure 3.1.37: Value of the Canadian Domestic Airline Market - Traditional Airlines vs. Low Cost
Carriers, 2002-2012F 105
Figure 3.1.38: Online Penetration of the Canadian Airline Market, 2002-2012F 106
Figure 3.1.39: Value of the Canadian Airline Market - Offline vs. Online, 2002-2012F 107
Figure 3.1.40: Airline Sector Contribution to Canadian Total, Domestic and Outbound Online
Travel Markets, 2002-2012F 108
Figure 3.1.41: Online Penetration Comparison of Total, Domestic and Outbound Canadian Online
Airline Markets, 2002-2012F 108
Figure 3.1.42: Online Penetration of the Domestic Canadian Travel Market, 2002-2012F 109
Figure 3.1.43: Online Penetration of the Outbound Canadian Travel Market, 2002-2012F 109
Figure 3.1.44: Value of the Canadian Domestic Airline Market - Online vs. offline, 2002-2012F 110
Figure 3.1.45: alue of the Canadian Outbound Airline Market - Online vs. offline, 2002-2012F 110
Figure 3.1.46: Canadian Online Airline Market Value - Domestic vs. Outbound, 2002-2012F 111
Figure 3.1.47: Canadian Online Airline Market - Domestic vs. Outbound (%), 2002-2012F 112
Figure 3.1.48: Canadian Domestic Airline Market - Traditional Airlines vs. Low Cost Carriers (%),
2002-2012F 112
Figure 3.1.49: Online Penetration of Traditional Airline & Low Cost Carrier Canadian Domestic
Airline Markets, 2002-2012F 113
Figure 3.1.50: Value of Canadian Domestic Online Airline Market - Traditional Airlines vs. Low Cost
Carriers, 2002-2012F 113
Figure 3.1.51: Canadian Online Airline Market - Direct vs. Indirect Distribution %, 2002-2012F 114
Figure 3.1.52: Value of Canadian Online Airline Market - Direct vs. Indirect Distribution, 2002-2012F 115
Figure 3.1.53: Canadian Domestic Online Airline Market - Direct vs. Indirect Distribution (%), 2002-
2012F 116
Figure 3.1.54: Canadian Outbound Online Airline Market - Direct vs. Indirect Distribution (%),
2002-2012F 116

7

List of Figures

Figure 3.1.55: Value of Canadian Domestic Online Airline Market - Direct vs. Indirect Distribution, 117
2002-2012F
Figure 3.1.56: Value of Canadian Outbound Online Airline Market - Direct vs. Indirect Distribution, 118
2002-2012F
Figure 3.2.1: Value of North American Gross Hotel Market, 2002-2012F 119
Figure 3.2.2: Online Penetration of the North American Hotel Market, 2002-2012F 120
Figure 3.2.3: Value of the North American Hotel Market, Offline vs. Online, 2002-2012F 120
Figure 3.2.4: North American Online Hotel Market as % of Total North American Online Travel
Market 120
Figure 3.2.5: Value of North American Online Hotel Market, 2002-2012F 121
Figure 3.2.6: North American Hotel Market - Domestic vs. Outbound (%), 2002-2012F 122
Figure 3.2.7: Value of North American Hotel Market - Domestic vs. Outbound, 2002-2012F 122
Figure 3.2.9: Value of North American Online Hotel Market - Domestic vs. Outbound, 2002-2012F 123
Figure 3.2.10: North American Hotel Market - US vs. Canada (%), 2002-2012F 124
Figure 3.2.11: Value of North American Hotel Market - US vs. Canada, 2002-2012F 124
Figure 3.2.12: North American Online Hotel Market - US vs. Canada (%), 2002-2012F 125
Figure 3.2.13: Online Penetration Comparison of North American, US and Canadian Hotel Markets,
2002-2012F 125
Figure 3.2.14: Value of the North American Online Hotel Market - US vs. Canada, 2002-2012F 126
Figure 3.2.15: US Hotel Market - Domestic vs. Outbound (%), 2002-2012F 127
Figure 3.2.16: Value of the US Hotel Market - Domestic vs. Outbound, 2002-2012F 128
Figure 3.2.17: Online Penetration of the US Hotel Market, 2002-2012F 128
Figure 3.2.18: Value of the US Hotel Market - Online vs. Offline, 2002-2012F 129
Figure 3.2.19: US Gross, Domestic and Outbound Online Hotel Markets as % of Respective Online
Travel Market, 2002-2012F 130
Figure 3.2.20: Value of the US Online Hotel Market - Domestic vs. Outbound, 2002-2012F 130
Figure 3.2.21: Online Penetration Comparison of Total, Domestic and Outbound US Hotel
Markets, 2002-2012F 131
Figure 3.2.22: Value of the US Online Domestic Hotel Market - Online vs. Offline, 2002-2012F 132
Figure 3.2.23: Online Penetration of the US Domestic Hotel Market, 2002-2012F 132
Figure 3.2.24: Value of the US Online Outbound Hotel Market - Online vs. Offline, 2002-2012F 132
Figure 3.2.25: Online Penetration of the US Outbound Hotel Market, 2002-2012F 133
Figure 3.2.26: US Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F 134
Figure 3.2.27: Value of the US Online Hotel Market, Direct vs. Indirect, 2002-2012F 134
Figure 3.2.28: US Domestic Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F 135
Figure 3.2.29: US Outbound Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F 135
Figure 3.2.30: Value of the US Domestic Online Hotel Market Value, Direct vs. Indirect
Distribution, 2002-2012F 136
Figure 3.2.31: Value of the US Outbound Online Hotel Market Value, Direct vs. Indirect Distribution,
2002-2012F 136
Figure 3.2.32: Canadian Hotel Market - Domestic vs. Outbound (%), 2002-2012F 138
Figure 3.2.33: Value of the Canadian Hotel Market - Domestic vs. Outbound, 2002-2012F 139
Figure 3.2.34: Online Penetration of the Canadian Hotel Market, 2002-2012F 139
Figure 3.2.35: Value of the Canadian Hotel Market, Offline vs. Online, 2002-2012F 140
Figure 3.2.36: Online Penetration of the Canadian Domestic Hotel Market, 2002-2012F 141
Figure 3.2.37: Online Penetration of the Canadian Outbound Hotel Market, 2002-2012F 141
Figure 3.2.38: Canadian Gross, Domestic and Outbound Online Hotel Markets as % of Respective
Online Travel Market, 2002-2012F 142
Figure 3.2.39: Value of the Canadian Online Hotel Market - Domestic vs. Outbound, 2002-2012F 143
Figure 3.2.40: Value of the Canadian Domestic Hotel Market - Offline vs. Online, 2002-2012F 143
Figure 3.2.41: Value of the Canadian Outbound Hotel Market - Offline vs. Online, 2002-2012F 144
Figure 3.2.42: Canadian Online Hotel Market - Direct vs. Indirect Distribution (%), 2002-2012F 144
Figure 3.2.43: Value of the Canadian Online Hotel Market, Direct vs. Indirect, 2002-2012F 145
Figure 3.2.44: Canadian Domestic Online Hotel Market - Direct vs. Indirect Distribution (%),
2002-2012F 146
Figure 3.2.45: Canadian Outbound Online Hotel Market - Direct vs. Indirect Distribution (%),
2002-2012F 146
Figure 3.2.46: Value of the Canadian Domestic Online Hotel Market, Direct vs. Indirect Distribution,
2002-2012F 147

8


List of Figures
Figure 3.2.47: Value of the Canadian Outbound Online Hotel Market, Direct vs. Indirect Distribution,
2002-2012F 147
Figure 3.3.1: Value of the North American Gross Car Rental Market, 2002-2012F 149
Figure 3.3.2: North American Car Rental Market - Domestic vs. Outbound (%), 2002-2012F 149
Figure 3.3.3: Value of North American Gross Car Rental Market - Domestic vs. Outbound,
2002-2012F 150
Figure 3.3.4: Online Penetration of the North American Car Rental Market, 2002-2012F 151
Figure 3.3.5: Value of the North American Online Car Rental Market, 2002-2012F 151
Figure 3.3.6: Value of the North American Offline Car Rental Market, 2002-2012F 152
Figure 3.3.7: Online Penetration of the North American Domestic Car Rental Market, 2002-2012F 152
Figure 3.3.8: Value of North American Domestic Car Rental Market - Offline vs. Online, 2002-2012F 153
Figure 3.3.9: Online Penetration of the North American Outbound Car Rental Market, 2002-2012F 153
Figure 3.3.10: Value of North American Outbound Car Rental Market - Offline vs. Online, 2002-
2012F 154
Figure 3.3.11: North American Car Rental Market - US vs. Canada (%), 2002-2012F 155
Figure 3.3.12: Value of the North American Car Rental Market - US vs. Canada, 2002-2012F 155
Figure 3.3.13: North American Online Car Rental Market - US vs. Canada (%), 2002-2012F 156
Figure 3.3.14: Value of the North American Online Car Rental Market - US vs. Canada, 2002-2012F 156
Figure 3.3.15: Car Rental Sector Contribution to Total North American, US and Canadian Online
Figure 3.3.16: US Car Rental Market - Domestic vs. Outbound (%), 2002-2012F 158
Figure 3.3.17: Value of the US Car Rental Market - Domestic vs. Outbound, 2002-2012F 158
Figure 3.3.18: Car Rental Sector Contribution to US Total, Domestic and Outbound Travel Markets,
2002-2012F 159
Figure 3.3.19: US Car Rental Market - Online vs. Offline (%), 2002-2012F 160
Figure 3.3.20: Value of the US Car Rental Market - Online vs. Offline, 2002-2012F 160
Figure 3.3.21: Online Penetration Comparison of Total, Domestic and Outbound US Car Rental
Market, 2002-2012F 161
Figure 3.3.22: Car Rental Sector Contribution to US Total, Domestic and Outbound Online Travel
Markets, 2002-2012F 162
Figure 3.3.23: US Online Car Rental Market, Domestic vs. Outbound (%), 2002-2012F 162
Figure 3.3.24: Value of US Online Car Rental Market - Domestic vs. Outbound, 2002-2012F 163
Figure 3.3.25: Online Penetration of the US Domestic Car Rental Market, 2002-2012F 163
Figure 3.3.26: Value of US Domestic Car Rental Market - Online vs. Offline, 2002-2012F 164
Figure 3.3.27: Online Penetration of the US Outbound Car Rental Market, 2002-2012F 164
Figure 3.3.28: Value of US Outbound Car Rental Market - Online vs. Offline, 2002-2012F 164
Figure 3.3.29: US Online Car Rental Market - Direct vs. Indirect Distribution (%), 2002-2012F 165
Figure 3.3.30: Value of the US Online Car Rental Market, Direct vs. Indirect Distribution, 2002-2012F 165
Figure 3.3.31: US Domestic Online Car Rental Market, Direct vs. Indirect Distribution (%),
2002-2012F 166
Figure 3.3.32: US Outbound Online Car Rental Market, Direct vs. Indirect Distribution (%),
2002-2012F 167
Figure 3.3.33: Value of the US Domestic Online Car Rental Market, Direct vs. Indirect Distribution,
2002-2012F 167
Figure 3.3.34: Value of the US Outbound Online Car Rental Market, Direct vs. Indirect Distribution,
2002-2012F 168
Figure 3.3.35: Canadian Car Rental Market - Domestic vs. Outbound (%), 2002-2012F 169
Figure 3.3.36: Value of the Canadian Car Rental Market - Domestic vs. Outbound, 2002-2012F 170
Figure 3.3.37: Online Penetration of the Canadian Car Rental Market, 2002-2012F 170
Figure 3.3.38: Value of the Canadian Car Rental Market, Online vs. Offline, 2002-2012F 171
Figure 3.3.39: Online Penetration Comparison of Total, Domestic and Outbound Canadian Car
Rental Market, 2002-2012F 172
Figure 3.3.40: Car Rental Sector Contribution to Canadian Total, Domestic and Outbound Online
Figure 3.3.41: Canadian Online Car Rental Market - Domestic vs. Outbound Distribution (%), 2002-
2012F 173
Figure 3.3.42: Value of the Canadian Online Car Rental Market - Domestic vs. Outbound
Figure 3.3.43: Value of the Canadian Domestic Car Rental Market - Online vs. Offline, 2002-2012F 174
Figure 3.3.44: Online Penetration of the Canadian Domestic Car Rental Market, 2002-2012F 175

9

List of Figures

Figure 3.3.45: Value of the Canadian Outbound Car Rental Market - Online vs. Offline, 2002-2012F 175
Figure 3.3.46: Online Penetration of the Canadian Outbound Car Rental Market, 2002-2012F 175
Figure 3.3.47: Canadian Online Car Rental Market - Direct vs. Indirect Distribution (%), 2002-2012F 176
Figure 3.3.48: Value of the Canadian Online Car Rental Market - Direct vs. Indirect Distribution,
2002-2012F 176
Figure 3.3.49: Canadian Domestic Online Car Rental Market - Direct vs. Indirect Distribution (%),
2002-2012F 177
Figure 3.3.50: Canadian Outbound Online Car Rental Market - Direct vs. Indirect Distribution (%),
2002-2012F 177
Figure 3.3.51: Value of the Canadian Domestic Online Car Rental Market - Direct vs. Indirect
Figure 3.3.52: Value of the Canadian Outbound Online Car Rental Market - Direct vs. Indirect
Figure 3.4.1: Value of the North American Gross Rail Market, 2002-2012F 180
Figure 3.4.2: North American Rail Market, Domestic vs. Outbound (%), 2002-2012F 180
Figure 3.4.3: Value of the North American Rail Market, Domestic vs. Outbound, 2002-2012F 181
Figure 3.4.4: Online Penetration of the North American Rail Market, 2002-2012F 181
Figure 3.4.5: Value of the North American Online Rail Market, 2002-2012F 182
Figure 3.4.6: Online Penetration of the North American Domestic Rail Market, 2002-2012F 182
Figure 3.4.7: North American Online Rail Market - US vs. Canada (%), 2002-2012F 183
Figure 3.4.8: Value of the North American Rail Market - US vs. Canada, 2002-2012F 183
Figure 3.4.9: Value of the North American Online Rail Market - US vs. Canada, 2002-2012F 184
Figure 3.4.10: US Rail Market - Domestic vs. Outbound (%), 2002-2012F 185
Figure 3.4.11: Value of the US Rail Market - Domestic vs. Outbound, 2002-2012F 185
Figure 3.4.12: Online Penetration of the US Rail Market, 2002-2012F 186
Figure 3.4.13: Value of the US Rail Market - Online vs. Offline, 2002-2012F 186
Figure 3.4.14: Online Penetration of the US Domestic Rail Market, 2002-2012F 187
Figure 3.4.15: Canadian Rail Market - Domestic vs. Outbound (%), 2002-2012F 188
Figure 3.4.16: Value of the Canadian Rail Market - Domestic vs. Outbound, 2002-2012F 188
Figure 3.4.17: Online Penetration of the Canadian Rail Market, 2002-2012F 189
Figure 3.4.18: Value of the Canadian Rail Market - Online vs. Offline, 2002-2012F 190
Figure 3.4.19: Online Penetration of the Canadian Domestic Rail Market, 2002-2012F 190
Figure 3.5.1: Value of the North American Gross Cruise Market, 2002-2012F 192
Figure 3.5.2: North American Cruise Market - US vs. Canada (%), 2002-2012F 193
Figure 3.5.3: Value of the North American Cruise Market, US vs. Canada, 2002-2012F 193
Figure 3.5.4: Online Penetration of the North American Cruise Market, 2002-2012F 194
Figure 3.5.5: Value of the North American Online Cruise Market, 2002-2012F 195
Figure 3.5.6: Value of the North American Online Cruise Market - US vs. Canada, 2002-2012F 195
Figure 3.5.7: North American Online Cruise Market - Direct vs. Indirect Distribution (%),
2002-2012F 196
Figure 3.5.8: Value of the North American Online Cruise Market - Direct vs. Indirect Distribution,
2002-2012F 197
Figure 3.5.9: US Cruise Market - Domestic vs. Outbound (%), 2002-2012F 198
Figure 3.5.10: Value of the US Cruise Market - Domestic vs. Outbound, 2002-2012F 198
Figure 3.5.11: Cruise Sector Contribution to US Total, Domestic and Outbound Travel Markets,
2002-2012F 199
Figure 3.5.12: Online Penetration of the US Cruise Market, 2002-2012F 199
Figure 3.5.13: Value of the US Cruise Market - Online vs. Offline, 2002-2012F 200
Figure 3.5.14: Online Penetration Comparison of the US Gross, Domestic and Outbound Cruise
Market, 2002-2012F 200
Figure 3.5.15: US Online Cruise Market - Domestic vs. Outbound (%), 2002-2012F 201
Figure 3.5.16: Value of the US Online Cruise Market - Domestic vs. Outbound, 2002-2012F 201
Figure 3.5.17: Online Penetration of the US Domestic Cruise Market, 2002-2012F 202
Figure 3.5.18: Value of the US Domestic Cruise Market - Online vs. Offline, 2002-2012F 202
Figure 3.5.19: Online Penetration of the US Outbound Cruise Market, 2002-2012F 203
Figure 3.5.20: Value of the US Outbound Cruise Market - Online vs. Offline, 2002-2012F 203
Figure 3.5.21: US Online Cruise Market - Direct vs. Indirect Distribution (%), 2002-2012F 203
Figure 3.5.22: Value of the US Online Cruise Market - Direct vs. Indirect Distribution, 2002-2012F 204
Figure 3.5.23: Value of the US Domestic Online Cruise Market - Direct vs. Indirect Distribution,
2002-2012F 204

10


List of Figures
Figure 3.5.24: US Domestic Online Cruise Market - Direct vs. Indirect Distribution (%), 2002-2012F 205
Figure 3.5.25: Value of the US Outbound Online Cruise Market - Direct vs. Indirect Distribution,
2002-2012F 205
Figure 3.5.26: US Outbound Online Cruise Market - Direct vs. Indirect Distribution (%),
2002-2012F 205
Figure 3.5.27: Canadian Cruise Market - Domestic vs. Outbound (%), 2002-2012F 206
Figure 3.5.28: Value of the Canadian Cruise Market - Domestic vs. Outbound, 2002-2012F 207
Figure 3.5.29: Online Penetration of the Canadian Cruise Market, 2002-2012F 208
Figure 3.5.30: Value of the Canadian Cruise Market - Online vs. Offline, 2002-2012F 208
Figure 3.5.31: Canadian Online Cruise Market - Domestic vs. Outbound (%), 2002-2012F 209
Figure 3.5.32: Value of the Canadian Online Cruise Market - Domestic vs. Outbound, 2002-2012F 209
Figure 3.5.33: Value of the Domestic Canadian Cruise Market - Online vs. Offline, 2002-2012F 210
Figure 3.5.34: Value of the Outbound Canadian Cruise Market - Online vs. Offline, 2002-2012F 210
Figure 3.5.35: Canadian Online Cruise Market - Direct vs. Indirect Distribution (%), 2002-2012F 211
Figure 3.5.36: Value of the Canadian Online Cruise Market - Direct vs. Indirect Distribution,
2002-2012F 211
Figure 3.5.37: Value of the Canadian Domestic Online Cruise Market - Direct vs. Indirect
Figure 3.5.38: Value of the Canadian Outbound Online Cruise Market - Direct vs. Indirect
Figure 3.6.1: Value of the North American Gross Bus Market, 2002-2012F 213
Figure 3.6.2: North American Bus Market - US vs. Canada (%), 2002-2012F 213
Figure 3.6.3: Value of the North American Bus Market - US vs. Canada, 2002-2012F 214
Figure 3.6.4: Online Penetration of the North American Bus Market, 2002-2012F 215
Figure 3.6.5: Value of the North American Online Bus Market, 2002-2012F 215
Figure 3.6.6: North American Online Bus Market - US vs. Canada (%), 2002-2012F 216
Figure 3.6.7: Value of the North American Online Bus Market - US vs. Canada, 2002-2012F 216
Figure 3.6.8: US Bus Market - Domestic vs. Outbound (%), 2002-2012F 217
Figure 3.6.9: Value of the US Bus Market - Domestic vs. Outbound, 2002-2012F 218
Figure 3.6.10: Online Penetration of the US Bus Market, 2002-2012F 218
Figure 3.6.11: Value of the US Bus Market - Online vs. Offline, 2002-2012F 219
Figure 3.6.12: Online Penetration of the US Domestic Bus Market, 2002-2012F 219
Figure 3.6.13: US Online Bus Market - Direct vs. Indirect Distribution (%), 2002-2012F 220
Figure 3.6.14: alue of the US Online Bus Market - Direct vs. Indirect Distribution, 2002-2012F 220
Figure 3.6.15: Canadian Bus Market - Domestic vs. Outbound (%), 2002-2012F 221
Figure 3.6.16: Value of the Canadian Bus Market - Domestic vs. Outbound, 2002-2012F 222
Figure 3.6.17: Online Penetration of the Canadian Bus Market, 2002-2012F 223
Figure 3.6.18: Value of the Canadian Bus Market, Online vs. Offline, 2002-2012F 223
Figure 3.6.19: Online Penetration of the Canadian Domestic Bus Market, 2002-2012F 224
Figure 3.6.20: Canadian Online Bus Market - Direct vs. Indirect Distribution (%), 2002-2012F 225
Figure 3.6.21: Value of the Canadian Online Bus Market - Direct vs. Indirect Distribution,
2002-2012F 225
Figure 3.7.1: Value of the North American Gross Package Market, 2002-2012F 226
Figure 3.7.2: North American Package Market - Domestic vs. Outbound (%), 2002-2012F 226
Figure 3.7.3: Value of the North American Package Market - Domestic vs. Outbound, 2002-2012F 227
Figure 3.7.4: North American Package Market - US vs. Canada (%), 2002-2012F 227
Figure 3.7.5: Value of the North American Package Market - US vs. Canada, 2002-2012F 228
Figure 3.7.6: Online Penetration of the North American Package Market, 2002-2012F 229
Figure 3.7.7: Value of the North American Online Package Market, 2002-2012F 229
Figure 3.7.8: North American Online Package Market - Domestic vs. Outbound (%), 2002-2012F 230
Figure 3.7.9: Value of the North American Online Package Market - Domestic vs. Outbound,
2002-2012F 230
Figure 3.7.10: North American Online Package Market - US vs. Canada (%), 2002-2012F 231
Figure 3.7.11: Value of the North American Online Package Market - US vs. Canada, 2002-2012F 231
Figure 3.7.12: North American Online Package Market - Direct vs. Indirect Distribution (%),
2002-2012F 232
Figure 3.7.13: Value of the North American Online Package Market - Direct vs. Indirect Distribution,
2002-2012F 233
Figure 3.7.14: US Package Market - Package vs. Non-Package Travel (%), 2002-2012F 233
Figure 3.7.15: US Package Market - Domestic vs. Outbound (%), 2002-2012F 234

11

List of Figures

Figure 3.7.16: Value of the US Package Market - Domestic vs. Outbound, 2002-2012F 234
Figure 3.7.17: Online Penetration of the US Package Market, 2002-2012F 235
Figure 3.7.18: Value of the US Package Market - Online vs. Offline, 2002-2012F 236
Figure 3.7.19: US Online Package Market - Domestic vs. Outbound (%), 2002-2012F 237
Figure 3.7.20: Value of the US Online Package Market - Domestic vs. Outbound, 2002-2012F 237
Figure 3.7.21: Online Penetration of the US Domestic Package Market, 2002-2012F 238
Figure 3.7.22: Value of the US Domestic Online Package Market - Online vs. Offline, 2002-2012F 238
Figure 3.7.23: Online Penetration of the US Outbound Package Market, 2002-2012F 239
Figure 3.7.24: Value of the US Outbound Online Package Market - Online vs. Offline, 2002-2012F 239
Figure 3.7.25: US Package Market - Direct vs. Indirect Distribution (%), 2002-2012F 240
Figure 3.7.26: Value of the US Package Market - Direct vs. Indirect Distribution, 2002-2012F 240
Figure 3.7.27: US Domestic Package Market - Direct vs. Indirect Distribution (%), 2002-2012F 241
Figure 3.7.28: Value of the US Domestic Package Market - Direct vs. Indirect Distribution,
2002-2012F 241
Figure 3.7.29: US Outbound Package Market - Direct vs. Indirect Distribution (%), 2002-2012F 241
Figure 3.7.30: Value of the US Outbound Package Market - Direct vs. Indirect Distribution,
2002-2012F 242
Figure 3.7.31: Canadian Package Market - Domestic vs. Outbound (%), 2002-2012F 243
Figure 3.7.32: Value of the Canadian Package Market - Domestic vs. Outbound, 2002-2012F 244
Figure 3.7.33: Online Penetration of the Canadian Package Market, 2002-2012F 245
Figure 3.7.34: Value of the Canadian Package Market - Online vs. Offline, 2002-2012F 245
Figure 3.7.35: Canadian Online Package Market - Domestic vs. Outbound (%), 2002-2012F 246
Figure 3.7.36: Value of the Canadian Online Package Market - Domestic vs. Outbound, 2002-2012F 246
Figure 3.7.37: Online Penetration of the Canadian Domestic Package Market, 2002-2012F 247
Figure 3.7.38: Online Penetration of the Canadian Outbound Package Market, 2002-2012F 247
Figure 3.7.39: Value of the Canadian Domestic Package Market - Online vs. Offline, 2002-2012F 248
Figure 3.7.40: Value of the Canadian Outbound Package Market - Online vs. Offline, 2002-2012F 248
Figure 3.7.41: Canadian Online Package Market - Direct vs. Indirect Distribution (%), 2002-2012F 249
Figure 3.7.42: Value of the Canadian Online Package Market - Direct vs. Indirect Distribution,
2002-2012F 249
Figure 3.7.43: Canadian Domestic Online Package Market - Direct vs. Indirect Distribution (%),
2002-2012F 250
Figure 3.7.44: Canadian Outbound Online Package Market - Direct vs. Indirect Distribution (%),
2002-2012F 250
Figure 3.7.45: Value of the Canadian Domestic Online Package Market - Direct vs. Indirect
Figure 3.7.46: Value of the Canadian Outbound Online Package Market - Direct vs. Indirect
Figure 4.1: North American Online Travel Market - Direct vs. Indirect Distribution (%),
2002-2012F 253
Figure 4.2: Value of the North American Online Travel Market - Direct vs. Indirect Distribution,
2002-2012F 253
Figure 4.3: Value of the North American Online Travel Market Sector Breakdown (US$ million)
- Direct vs. Indirect, 2008 254
Figure 4.4: North American Online Travel Agent Market - Sector Breakdown (%), 2002-2012F 255
Figure 4.5: Value of the North American Online Travel Agent Market - Sector Breakdown,
2002-2012F 255
Figure 4.6: US Online Travel Market - Direct vs. Indirect, 2002-2012F 256
Figure 4.7: Canadian Online Travel Market - Direct vs. Indirect, 2002-2012F 256
Figure 4.8: North American Online Airline Market - Direct vs. Indirect as % and value,
2002-2012F 257
Figure 4.9: North American Online Hotel Market - Direct vs. Indirect as % and value,
2002-2012F 257
Figure 4.10: North American Online Car Rental Market - Direct vs. Indirect as % and value,
2002-2012F 258
Figure 4.11: North American Online Bus Market - Direct vs. Indirect as % and value, 2002-2012F 258
Figure 4.12: North American Online Cruise Market - Direct vs. Indirect as % and value, 2002-
2012F 258
Figure 4.13: North American Online Rail Market - Direct vs. Indirect as % and value, 2002-2012F 259

12


List of Figures
Figure 4.14: North American Online Package Market - Direct vs. Indirect as % and value, 2002- 259
2012F
Figure 4.15: Value of the US Online Travel Market - Direct vs. Indirect Distribution, 2002-2012F 260
Figure 4.16: Value of the US Online Travel Market Sector Breakdown (US$ million) -
Direct vs. Indirect, 2008 261
Figure 4.17: US Online Travel Agent Market Sector Breakdown (%), 2008 261
Figure 4.18: US Domestic Online Travel Market - Direct vs. Indirect (%), 2002-2012F 263
Figure 4.19: Value of the US Domestic Online Travel Market - Direct vs. Indirect, 2002-2012F 263
Figure 4.20: US Outbound Online Travel Market - Direct vs. Indirect (%), 2002-2012F 264
Figure 4.21: Value of the US Outbound Online Travel Market - Direct vs. Indirect, 2002-2012F 264
Figure 4.22: Indirect US Online Airline Market - Domestic vs. Outbound (%), 2002-2012F 265
Figure 4.23: Value of the Indirect US Online Airline Market - Domestic vs. Outbound, 2002-
2012F 265
Figure 4.24: Indirect US Online Hotel Market - Domestic vs. Outbound (%), 2002-2012F 266
Figure 4.25: Value of the Indirect US Online Hotel Market - Domestic vs. Outbound, 2002-2012F 266
Figure 4.26: Indirect US Online Car Rental Market - Domestic vs. Outbound (%), 2002-2012F 267
Figure 4.27: Value of the Indirect US Online Car Rental Market - Domestic vs. Outbound, 2002-
2012F 267
Figure 4.28: Indirect US Online Cruise Market - Domestic vs. Outbound (%), 2002-2012F 268
Figure 4.29: Value of the Indirect US Online Cruise Market - Domestic vs. Outbound, 2002-2012F 268
Figure 4.30: Indirect US Online Package Market - Domestic vs. Outbound (%), 2002-2012F 269
Figure 4.31: Value of the Indirect US Online Package Market - Domestic vs. Outbound, 2002-
2012F 269
Figure 4.32: Value of the Canadian Online Travel Market - Direct vs. Indirect Distribution, 2002-
2012F 270
Figure 4.33: Value of the Canadian Online Travel Market Sector Breakdown (US$ million) - Direct
vs. Indirect, 2008 271
Figure 4.34: Canadian Online Travel Agent Market Sector Breakdown (%), 2008 271
Figure 4.35: Canadian Domestic Online Travel Market - Direct vs. Indirect (%), 2002-2012F 273
Figure 4.36: Canadian Domestic Online Travel Market Y-o-Y Growth, Direct vs. Indirect, 2002-
2012F 273
Figure 4.37: Canadian Outbound Online Travel Market - Direct vs. Indirect (%), 2002-2012F 273
Figure 4.38: Canadian Domestic Online Travel Market Y-o-Y Growth - Direct vs. Indirect, 2002-
2012F 274
Figure 4.39: Indirect Canadian Online Airline Market - Domestic vs. Outbound (%), 2002-2012F 275
Figure 4.40: Value of the Indirect Canadian Online Airline Market - Domestic vs. Outbound, 2002-
2012F 275
Figure 4.41: Indirect Canadian Online Hotel Market - Domestic vs. Outbound (%), 2002-2012F 276
Figure 4.42: Value of the Indirect Canadian Online Hotel Market - Domestic vs. Outbound, 2002-
2012F 277
Figure 4.43: Indirect Canadian Online Car Rental Market - Domestic vs. Outbound (%), 2002-
2012F 277
Figure 4.44: Value of the Indirect Canadian Online Car Rental Market - Domestic vs. Outbound,
2002-2012F 278
Figure 4.45: Indirect Canadian Online Cruise Market - Domestic vs. Outbound (%), 2002-2012F 279
Figure 4.46: Value of the Indirect Canadian Online Cruise Market - Domestic vs. Outbound, 2002-
2012F 279
Figure 4.47: Indirect Canadian Online Package Market - Domestic vs. Outbound (%), 2002-2012F 280
Figure 4.48: Value of the Indirect Canadian Online Package Market - Domestic vs. Outbound,
2002-2012F 280

13

18

Executive Summary

Executive Summary
> North American Travel Market Overview

2009 to be the first year this decade that a decline in travel expenditure is
expected in the region

The value of the North American travel market reached an estimated US$389,376 million
in 2008 and a further 16% increase in volume is expect by 2012, but growth has slowed.
2009 is expected to be the first year this decade for a decline in the total value of travel
expenditure and we forecast a recovery in 2010.

Fastest growth in Hotel and Cruise sectors

Airlines continue to account for the largest proportion of travel spend, followed by Hotels.
In 2008 these sectors accounted for 35% and 25% of the total market respectively. Fastest
growth has been in the Hotel and Cruise sectors.

Online penetration of North American travel market reaches 35%

Distribution trends within the North American market reveal some particularly interesting
patterns. Whilst offline channels continue to account for the majority of travel spend
online channel have been rapidly gaining share. In 2008 the online penetration of the
North American travel market reached about 35% of the value. By 2012 we are expecting
almost half of travel expenditure to be online. Growth rates of the online channel are
expected to be lower than previous years but between 2008 and 2012 a total growth in
value of almost 50% is forecast. The online travel market by 2012 is predicted to reach
a value of US$201,382 million. That is an additional US$57,498 million annually to be
circulated online by the end of 2012.

All growth is online

While the gross travel market experiences a relatively stagnant period, amongst this,
the online travel market is showing very healthy growth and continuing to erode offline
share. This illustrates the growing importance of online channels and the resilience to the
economic downturn.

The Airline sector dominates the online travel market (56%) and online expenditure on
Airline products reached US$75,964 million in 2008. The value of the online travel market
is forecast to grow in value by 44% between 2008 and 2012.

The Hotel sector accounts for 32% of the total online travel market and US$42,831 million
in 2008. Growth by 2012 is forecast to be up by a value of over 50%. The Car Rental sector
is the next largest sector accounting for 7.7% and a value of US$10,389 million (2008).

19

Executive Summary

Growth in the value of the outbound travel market has been higher than the domestic
travel market, but in 2009 a decline of 4.8% is expected in the outbound market for the
first time. Good recovery is forecast for 2010.

Domestic travel accounts for around 64% of the total online travel market and outbound
36%. Outbound travel products for North American consumers have performed well
online and increased in share from 28% in 2002. From 2010 we expect grow in both
domestic and outbound online markets to hit double digit figures again.

Canada increases it significance in the North American travel market but US spend
more per trip

Canadian travellers accounted for 9.4% of total North American travel trips in 2002 and
by 2012 we expect this to increase to 11.3%. Canada has out performed the US from a
volume growth perspective. Canada is expected to grow by 1.8% in 2009, while the US
experiences a decline of around 1%.

In value terms, the US contributes 90% to the North American market and this is expected
to remain relatively consistent during the review period in this report. US travellers have
a higher spend per trip than Canadian travellers.

US online travel market valued at US$123,346 million in 2008

The US accounts for 91% of the total North American online travel market. The US online
travel market reached an estimated value of US$123,346 million in 2008 and Canada
US$12,252 million (CAD $12,869 million). The US online market is slightly more advanced
than Canada but penetration is relatively similar. 35.2% of US travel expenditure was
online in 2008 against a 31.5% penetration for Canada. By 2012 we forecast 44.8% of all
US travel expenditure to be online and 42% of Canadian.

A continuously changing travel distribution landscape

The contrast between the performances of online and offline channels is enormous.
Online channels have been remarkably productive and growth rates have remained in
double digit figures for every year reviewed in the report – with the exception of 2009
when annual growth is expected to fall to a level of 6.3% (still well above growth levels
for the offline market for the entire period). Put alongside offline productivity, the 5.2%
decline in the offline market for 2009 makes a very strong statement. The online channels
certainly now seem strong despite times of instability.

US outbound travel market is growing

Just under 70% of US travel expenditure is currently on domestic travel. Outbound travel is
growing well and at higher rates than the more mature domestic market. 2009 is however
expected to result in an estimated 4.8% decline. Mexico and Canada are receiving the
most outbound travellers, followed by the UK. Growth has been strongest in Germany

20

Executive Summary

and Japan. A slightly higher proportion of domestic travel is bought online in comparison
to outbound travel, but only marginally.

Canadian travel market reaches US$38,869 million (CAD $40,825 million) in 2008

By 2012 the Canadian travel market is expected to be 73% larger in size than it was in 2002.
The Canadian market is very different from the US in that outbound travel accounts for
the majority of the Canadian travel market. In 2008 outbound travel contributed around
67% to the total Canadian travel market. Annual growth has generally been higher for
outbound travel and a 5.5% CAGR is expected for the 2007-2012 review period.

Canadian online travel market valued at US$1,986 million (2008)

Online channels are also becoming increasingly significant for the Canadian travel
market. Online penetration has jumped from 11% in 2002 to around 32% in 2008. Growth
is expected to slow but continue to expand and penetrate around 42% of the market by
2012. The online travel market is divided fairly evenly between domestic and outbound
markets, despite the domination of the outbound segment in the gross market. The
domestic market has a higher online penetration and when in 2012 we forecast that
60% of domestic travel will be purchased online, 33% of the outbound segment will be
online. Growth online for both has been remarkable though. Airline products make up a
significant 61% of the Canadian online travel market and the data reveals that there is a
lot of room for growth for some of the travel sectors.

> Airline Sector

Airline sector to continue to grow in size through 2009

The North American Airline market reached a value of US$136,638 million in 2008 and
growth is expected to slow but remain positive in the next few years. The domestic market
accounts for the majority of the North American Airline sector but only marginally. The
Canadian travel market has increased its share of the total North American airline market
and accounted for around 12% in 2008, up from 7.7% in 2002. LCCs are growing their
share in both markets and in the US reached about one third in 2008.

During ten year period to 2012, Canadian Airline market to double in size

In 2008 the Canadian Airline market reaches a value of US$16,548 million (CAD $17,381
million). The Airline sector accounts for around 43% of total Canadian travel market.
Outbound travel dominates and accounts for 74% of the total Canadian Airline market
(2008). Growth is expected to be lower in 2009 but still positive. Traditional airlines make
up the majority of the market and recently regained some lost share. Following stronger
growth from Traditional Airlines in 2002-2007, the reverse picture is predicted for the
upcoming period and LCCs are forecast to grow at higher rates in the 2007-2012 period.
The Traditional segment experienced a 4.8% decline in 2008.

21

Executive Summary

Growth of online Airline market remarkable

Online channels have played a major part in the distribution of Airline products to North
American travel consumers. Online penetration in the North American Airline market has
reached 56% and expected to expand further to around 68% by 2012. The Airline sector
accounts for over half of the total North American online travel market.

Online penetration of US airline market increased to 54% in 2008 which was a value of
US$68,490 million. The convergence of offline/online distribution occurred in 2006/07
and in 2009 we expect 60% of US airline expenditure to be on online, growing to about
70% by 2012. Online penetration is marginally higher in the domestic market to the
outbound airline market.

Online penetration in the Canadian market is 20% lower than the US

In 2008, approximately 45% of the expenditure on Airline products by Canadian consumers
was online. This is forecast to jump to 49% in 2009. Online channels will continue to grow
in significance. In the Canadian market, negative growth in offline channels is calculated
for most years under review and so there is certainly an increasing importance towards
online channels. Online penetration rates for domestic/outbound is significantly different
– 77% of domestic Airlie product expenditure is online and 34% of outbound (2008).
Growth online for both sub-sectors (Traditional and LCC) are expected to withstand the
pressures from the current economic climate and power forward to reach record levels.

Online expenditure outweighs offline expenditure in the outbound Airline market
for the first time in 2008

Growth in outbound Airline expenditure by North American consumers via online
channels has been significant at a 26.3% CAGR (2002-2007) against a -3.1% CAGR for
the value of offline channels. In 2008 online expenditure on outbound Airline products
outweighed the offline expenditure for first time when online penetration reached 53.2%.
With this pattern continuing, by 2012 we expect the online penetration of the outbound
segment to reach 66.3%.

Direct distribution constantly growing within US and Canadian online Airline
markets

In 2009 approximately 66% of online expenditure by US consumers was Direct with
suppliers. This trend is expected to continue. OTAs are still playing a vital part in the travel
supply chain and generated US$45,141 million in 2008 (34% of market). OTAs have a
higher penetration in the outbound airline segment – 10% more.

The role of OTAs in the Canadian online Airline sector has declined and direct bookings
reached US$5,818 million (CAD $6,110 million) in 2008. During the 2002-2007 review
period, Direct distribution grew at a 37.1% CAGR and by 2012 we forecast 82% of
expenditure to be Direct. OTAs have held their share of the outbound market better than

22

Executive Summary

the domestic market and in value terms growth of indirect channels for outbound market
has been more impressive.

> Hotel Sector

Dip in the North American Hotel market forecast for 2009

The North American Hotel market reached an estimated US$97,751 million in 2008,
up 4.2% from 2007. Despite dip in 2009 (-3.6%), the Hotel market is reported to have
performed well and by 2012 we expect the size to almost double from 2002 levels.
Positive growth is expected to return again in 2010 and annual growth of around 7% is
expected for the next three years.

US and Canadian Hotel markets expected to experience a decline – but in different
years

The US Hotel market has reported slightly higher rates of growth than the Canadian
market during the full review period of this report. Both markets are expected to take a
hit from economic pressures but the Canadian market registered a 2.5% decline in 2008
when the US increased by 5.8%. Then when the Canadian market returns to positive
growth with a 1.8% increase forecast in 2009, the US is expected to decline by 3.4%. By
2010 both markets are forecast to pick up and growth between 6% and 8% is expected.

US outbound Hotel market feeling the impact

US consumers have increased their expenditure on Hotel products consistently during the
review period and the sector share of the total US travel market has also increased. The
value of the US Hotel market reached an estimated US$87,958 million in 2008, up 5.6%
from 2007, but a 3.4% decline is expected for 2009. Growth is higher in the outbound
market in comparison to the domestic market for all years under review except 2008 and
2009.

Canadian domestic Hotel market took a bigger hit in 2008

The Canadian Hotel market accounts for about quarter of Canadian travel market. The
market valued reached an estimated US$9,793 million in 2008 (CAD$10,285 million). This
represents a 2.5% decline from 2007 but growth is expected to return in 2009 at 1.8%.
The Hotel market is divided fairly evenly between the domestic and outbound Hotel
segments (outbound was around 52% in 2008). The decline of the Hotel market in 2008
included a larger decline for the domestic segment.

North American consumers buy more and more Hotel products online

Online penetration rates of the Hotel market are slightly below the Airline sector, but
relative to all other Travel sectors, the online Hotel market has performed very well. The

23

Executive Summary

growing confidence of North American consumers is clearly reflected in the figures.
Growth of the online Hotel market has been at a 25.3% CAGR (2002-2007) and although
it is expected to slow we forecast double digit rates. Whilst the online Hotel market is
predicted to be impacted by economic pressures and forecast to record the lowest actual
growth rate in the review period in 2009 (annual growth of 3.7%) we do continue to see
growth. By 2010 growth is expected to return to a healthy level of 14.8% and maintained
above 13% for the following 2 years.

Largest plunge yet for the offline US Hotel market (-9%) expected in 2009

The expansion of online hotel market been impressive in the US market. The offline Hotel
market is expected to take a large plunge in 2009. Growth is accounted for by online
channels and although growth online is expected to slow from previous years, a 3.5%
annual increase is predicted nonetheless.

Online channels increasingly vital in any Hotel distribution strategy targeting the
region but maintaining the efficiency and integration of both channels remains
important

Growth in online expenditure has been double the growth of offline channels. The Hotel
market is a significant sector online, accounting for around one third of the total North
American online travel market. Outbound Hotels have performed particularly well in
recent years and in 2008 made up around 27% of the total online Hotel market.

Online/Offline gap for US Hotel market forecast to close by 2010

In 2008, 44.6% of the total expenditure by US travellers on Hotel products was online.
This equated to a value of US$39,268 million, an increase of 13.7% from 2007. In 2010
we forecast the online penetration to exceed the 50% mark. It is very clear from the data
that growth online has well exceeded growth offline. During 2002-2007 the offline market
edged up at a 2.7% CAGR when the online market grew at a 24% CAGR. In the 2007-2012
review period, all growth is expected to be online as offline is predicted to experience a
-2% CAGR.

Canadian online Hotel market growing faster than the US – but sizes very different

The Online Canadian Hotel market has grown relatively faster than the US but
understandably values are very different due to the sheer size of the US market. The US
online Hotel market was valued at an estimated US$39,268 million in 2008 and Canada
US$3,563 million (CAD $3,742 million). Actual growth rates are expected to be higher for
Canada.

Online penetration soars in the Canadian Hotel market

The online penetration in the Canadian Hotel market has continuously increased. In 2008
penetration reached 36.3%, a significant shift from 10% in 2002. During 2002-2007 the

24

Executive Summary

offline market displayed basically stagnant growth rates with a 0% CAGR and against
this the online market grew at a 32.5% CAGR. In 2008 the only decline was accounted
for by the offline channels with an 8.4% fall in value when the online market increased in
value by almost 10%. Further decreases in the value of the offline market are expected.
Online penetration rates are similar in the domestic and outbound segments, just slightly
higher for the domestic market but values are almost equal. Positive growth is expected
throughout 2009 and forecast annual growth of 13% for both segments.

US outbound online Hotel market has grown five times the size during the 5 years
to 2008

The US outbound online Hotel market has grown faster than the domestic market. The
cross over point between online/offline distribution will arrive sooner for the outbound
segment (in 2009) and this is particularly interesting having started at lower levels than
the domestic market. Rapid growth has led to an expected 50.2% online penetration in
2009. The domestic market is forecast to catch up in 2010. Higher overall average growth
is also expected for the outbound segment going forward, except 2009 when a decline
of 4.3% expected. The domestic market has, however, not been static and has expanded
to three times the size.

OTAs lose share of the US Hotel market but gain good value

US travel consumers make relatively good use of OTAs when purchasing Hotel products.
In 2008 43% of expenditure was Indirect. The OTA share of the Hotel market has declined
with Direct to consumer distribution strengthening, but OTAs are expected to hold a
pretty good share. The value of Direct distribution grew at a 29.8% CAGR (2002-2007) and
Indirect distribution grew at an 18.3% CAGR. Although OTAs have lost market share, their
value has increased enormously, particularly for the outbound segment.

Clear move towards Direct Hotel channels by Canadian consumers

OTAs had good hold in the Canadian market in 2002 at around 54%. In 2008 there has
been a shift in online distribution and 65% of expenditure went via Direct channels. The
value of expenditure via Direct channels grew at a significant 41.7% CAGR (2002-2007)
and although OTAs are losing market share the value of the Indirect market grew at a
notable 22.8% CAGR as well. OTAs have held their share better in the outbound product
segment.

> Car Rental Sector

North American Car Rental market reaches US$26,282 million in 2008

The Car Rental sector accounts for around 6.8% of total North American travel market
(2008), which is an estimated value of US$26,282 million and an increase of 1.6% on
2007. In 2009 a further 1.7% growth is forecast and a 3.5% CAGR for the 2007-2012

25

Executive Summary

review period. The domestic market dominates at about 63%. The US market generated
US$24,553 million in 2008 after modest growth of a 4.3% CAGR (2002-2007). The
Canadian market generated US$1,880 million (CAD $1,896 million) in 2008 after a slightly
higher growth of a 7.2% CAGR (2002-2007). In Canada the outbound market accounts for
the majority whereas in the US the domestic market dominates.

Online penetration of Car Rental market behind Airline and Hotel sectors

Online distribution in the North American Car Rental market has increased but remains
behind the Airline and Hotel developments. In 2008 online expenditure was around 39%
for Car Rental and a value of US$11,157 million, this was an increase of 9% from 2007. By
2012 the sector is expected to reach the half way mark between online/offline distribution.
Growth has been good with a 20.3% CAGR during 2002-2007 and although expected to
slow in the upcoming period we forecast a 9.5% CAGR (2007-2012). Growth is expected
to be particularly lower in 2009 but double digit growth forecast from 2010.

Online growth for US Car Rental market drops for 2008/09 but still very positive

Online penetration of the US Car Rental market reached 40% in 2008 and in fact most
growth in the market has been online. During 2002-2007 the online market grew at a
19.4% CAGR and offline experienced an almost 1% decline. Similar trends are forecast for
the latter review period. Besides 2008/09 online growth is recorded in double digit figures
but in 2009 it is still expected to grow by 7.6% online.

The US Car Rental market accounts for around 93% of the total North American online
Car Rental market and reached a value of US$9,767 million in 2008 which was an increase
from US$3,684 million in 2002. Annual growth in the US appears to be more erratic.
Online penetration is higher in the US domestic market for Car Rental.

Offline channels for the Canadian Car Rental market started weakening around
2007/08

The Canadian online Car Rental market reached an estimated value of US$622 million
(CAD$653 million) in 2008 after a 30% CAGR during 2002-2007. which from US$99 million
(CAD $155 million) showed slightly higher growth rates than the US. Online penetration
in the Canadian Car Rental market reached 33% in 2008. The online market is forecast to
grow in double digit figures for the upcoming period and a 14.3% CAGR is forecast. For
Canada, online penetration is slightly higher in the outbound segment in comparison to
the domestic segment.

Direct online distribution dominates the Car Rental market

Direct online distribution dominates the online Car Rental market in both markets and
the proportion has increased. In 2008 66% was Direct in the US market. As with some
other sectors, the OTAs have held their share better in the outbound market. In 2008 the
Indirect Car Rental market in the domestic segment declined for the first time by 2.7%.

26

Executive Summary

Growth in the value is expected to pick up again in 2009 but higher growth is expected
from Direct channels. Direct online distribution accounts for the majority of sales in the
Canadian market as well.

> Rail Sector

North American Rail market forecast to fall 5.1% in 2009

The Rail sector is a smaller part of the North American travel market and generated
US$3,162 million in 2008. A decline of 5.1% is expected for 2009 and growth to return again
in 2010. The Rail market is evenly split between domestic and outbound segments.

Online Rail penetration low but shown good growth

Online penetration of the Rail sector reached 22.3% in 2008. The online market is entirely
accounted for by the domestic segment. The US market generated US$2,871 million
in 2008 and the Canadian market US$290 million (CAD $305 million). All the online
distribution of Rail products (not as part of packages) is considered Direct.

> Cruise Sector

3.5% decline in the value of the North American Cruise market forecast for 2009

The Cruise sector makes up around 3% of the North American travel market. The value of
the sector reached US$12,732 million in 2008 which was an increase of 1.2% on 2007. The
growth of the Cruise sector has been relatively high in comparison to other sectors, but
growth has slowed since 2007, and in 2009 a 3.4% decline is forecast.

Canada has increased its significance in the North American Cruise market and grown its
share from 2.2% in 2002 to 6.8% in 2008. Canada has therefore grown faster than the US
but from smaller base numbers. For Canada specifically, the Cruise market has left a very
positive period of growth for a short while and there was a 1.7% decline in 2008. The US
is also expected to decline in 2009 by 2.8%.

Online North American Cruise market to double in size by 2012

Online Cruise distribution is in its infancy when put along side other online travel sectors.
The penetration has, however, grown from 4.1% in 2002 to 11.3% in 2008 and is expected
to reach around 19% by 2012. The online/offline gap is therefore expected to remain to be
wide. Nevertheless, although from small base numbers, very strong online growth rates
have been reported and a 29.3% CAGR calculated for the 2002-2007 period. Between
2008 and 2012 we forecast the online Cruise market to double in size.

27

Executive Summary

Canadian Cruise consumers enter the online marketplace

In the past, all online North American Cruise revenue has been solely generated by
US consumers. Until 2008, Canadian’s purchased all their Cruise products offline, but
movement is now being seen in the Canadian online market.

OTAs driven online Cruise market

OTAs have really driven the development of online Cruise market in the entire region
and generate about 94% of the online Cruise revenue. As with other sectors, Direct
distribution is gradually increasing and this trend is expected to continue, however OTAs
will continue to dominate.

> Bus Sector

Not huge movement reported in the Bus market

The share of the Bus sector in the North American region is around 3% (2008), declining
its share by approximately 1% during the review period. The value of the sector was valued
at an estimated US$10,702 million in 2008 and although the Bus market has marginally
grown in value, the total expenditure on Bus products has remained largely unchanged.
Online channels generate less than 6% of gross Bus revenue

Online revenues are lower in comparison to other sectors and 5.8% of Bus products were
purchased online in 2008. By 2012 this is forecast to increase to just over 10%. The value
of the online travel market in 2008 reached US$624 million. Direct channels have led the
development of the online Bus market but OTAs are beginning to play a role.

> Package Sector

Significant room for growth online in the Package market

The Package sector accounts for about one quarter of the North American travel market
(2008) and a value of US$101,979 million. In 2009 we are expecting a 3.9% decline in the
value of the market but expect recovery by 2010. We highlight the need for developments
in the online space within this sector. Online penetration in 2008 was 2.1%, up from 1%
in 2002. By 2012 we do not forecast much movement and expect just 3% to be online
by 2012. Direct distribution dominates the online marketplace for Packages but OTAs are
expected to start to become more significant from 2009.

28

Executive Summary

> Online Travel Agents Landscape

Revenue from Direct distribution to the North American market growing in most
sectors

Increasing Direct distribution has become the trend for most travel sectors in the North
American market. OTAs have as a result gradually lost their share of the online market.
In 2002 OTAs generated around 47% of online revenue from North American travel
consumers and in 2008 this reduced to 35%. By 2012 this is expected to reduce further
to 31%. In value terms, the Indirect market has grown in size alongside growing online
markets in general and a 17.5% CAGR was calculated for the 2002-2007 review period.
In 2008 the value of the Indirect market reached US$47,841 million. So growth has been
healthy for the OTA sector but we do forecast the biggest dip for the market in 2009; 1.9%
growth is expected for the Indirect market and 8.4% growth for Direct channels. In 2010
we expect to see good growth return and forecast a 9% growth for that year.

Airline products dominate OTA revenue

Airline products make up the majority of OTA revenue and accounted for around 52%
in 2008. This is largely accounted for the sheer size of the online Airline market. Hotel
products are also very dominant. Expenditure on Bus, Rail and Package products is mainly
channelled direct to suppliers. Nevertheless, these sectors have edged up their share in
OTA revenues marginally and have as a consequence eroded some of the Airline share.
The share of OTAs in the Canadian market is more pronounced that in the US. In 2008
25% of the Canadian online market was Indirect and 36% of the US market.

29

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Full North American Online Travel Report 2009

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Full North American Online Travel Report 2009