Forrester’s New 2011-2016 US Online Travel Forecast: Restrained Growth Ahead

We just published Forrester’s 2011-2016 US online leisure and unmanaged business travel forecast report (if your firm is a Forrester ForecastView subscriber, you may download the complete detailed forecast here). The forecast covers spending for airline tickets, hotel/motel accommodations, rental cars, cruises, and tours, with year-by-year amounts for each in the report. The forecast doesn’t include travel spending on mobile sites or apps, nor does it include ancillary product sales (such as airline checked baggage fees or hotel Wi-Fi) and destination activities and services, like sightseeing tours.

We believe several macro factors will affect the travel industry, and thus the revenue figures in our forecast, during the next five years. These include the state of the US economy and consumer confidence, a permanently high-priced energy environment (critical to the airline and cruise sectors), industry consolidation and the resultant restraint on industry capacity growth, and pricing, which we expect to remain relatively high thanks to capacity discipline (especially in the airline, hotel, and rental car sectors) and of course those high energy costs. We developed the forecast far before the current US debt ceiling crisis had become, well, a crisis. In preparing the forecast, we anticipated that though the US economy may be uneven, it would continue to recover, albeit at an uneven pace through 2012 (we anticipated that the US economy would be more stable from 2013 onwards).

A few highlights from the forecast:

  • We anticipate that for the full-year 2011, leisure and unmanaged business travelers will spend nearly $102 billion online. We expect this will climb 41%, to nearly $143 billion, during the next five years.
  • In our 2009-2014 travel online forecast, we made the call that we would soon see a slow-down in the number of new US online leisure and unmanaged business travel Bookers joining each year. Well, “soon” has become “now.” In 2011, we expect nearly 90 million leisure and unmanaged business travelers will be Bookers. In five years, this will approach 105 million people.
  • The online travel planning and booking process hasn’t evolved very much in the 11 ½ years I’ve been at Forrester (if you don’t believe me, check the Internet Archive’s “wayback machine”). The process to plan and buy a trip on most major travel websites follows the same linear, origin-destination, calendar-based process that it did back in 2000. With few new Bookers expected to enter the ranks, travel sellers must push themselves, and their design and technology partners, to create appealing, involving, inspirational -- and yes, pragmatic -- travel planning and purchasing processes that address more of a traveler's needs, such as planning a trip within a given budget or guiding them toward destinations that meet their interests.

So what do you think? Will online travel in the US be more or less robust than our forecast calls for? Is there something you believe could sway more travelers who are Lookers or Sideliners to become Bookers? We welcome your comments.