The U.S. travel market continued its stellar recovery in 2022, with total gross bookings of $422.2 billion, an increase of 51% over the prior year.
According to Phocuswright’s research report U.S. Online Travel Agency Market Report 2022-2026, online and offline travel both showed robust growth, but the channel share shifts seen during the pandemic are slowly changing course.
Online channel share, which grew to 65% in 2021, moderated slightly to 63% in 2022 (see figure below) as offline channels showed signs of recovery. Online travel agencies (OTAs) comprised just over a fifth of the total U.S. market while the online supplier-direct channel accounted for 41% of the market.
Phocuswright’s U.S. Online Travel Agency Market Report 2022-2026 provides a comprehensive view of the U.S. online travel agency channel, including detailed market sizing and projections through 2026, distribution trends, key developments and more.
With overall market stabilization anticipated over the next few years, growth will moderate, but remain positive through the rest of the forecast period.
Looking ahead, here are 4 key areas of focus from the research:
Phocuswright’s research has consistently shown that consumers visit multiple sites when shopping for travel in a bid to save a few dollars. Will discounts or rewards turn them into loyal, returning customers? Are apps the channel to induce that behavior? Loyalty and apps, together, will remain a closely watched area over the coming years.
Historically it was travel suppliers who partnered with the OTAs in a bid to supplement their core products. But more non-travel brands, especially financial institutions, are now partnering with the OTAs to sell travel. The goal, as outlined in Phocuswright’s recent article, is not to gain substantial revenue but to keep their customers coming back and encourage card usage (more points to redeem). For the OTAs, these partnerships can be quite profitable.
The importance of STRs to Booking.com is underscored by its Superbowl LVII ad featuring Melissa McCarthy. Meanwhile, Expedia is migrating Vrbo onto the same platform as its other major brands in 2023. It expects the new OneKey loyalty program, which will give short-term renters the benefit of a loyalty program, will also drive growth in the future.