Travel industry update #2

What works in Organic Growth in the travel space?

Dec 04, 2024

This industry Deep Dive would have been for paid subscribers only, but thanks to a sponsorship by Propellic, a performance digital marketing agency specializing in the travel industry, I can make it available to everyone! You can (and should) learn more about Propellic's SEO & Paid Media services at Propellic.com.

The first travel Deep Dive painted a broad picture of the industry:

Winner-takes-it-all dynamics
strong recovery from the pandemic
Google Travel satisfies intent in the search results instead of sending traffic to sites

But a lot happened since June:

Annual growth slowed down
OTAs are competing head-to-head with new AI features and products
Consumer behavior changed with disposable income, and more people searched for all-inclusive resorts

So, in this update, I focus on 3 fundamental questions:

How has the travel industry changed since June?
What works in Organic Growth for OTAs right now?
What are newcomers doing well?

Key takeaways:

The travel industry will grow in 2024, but slower than last year. The industry largely recovered from the pandemic.
Booking.com, Marriott, United and American Airlines are winning their respective markets with a mix of new page types like flight routes and upselling.
AI-generated review summaries start driving SEO impact. Almost every OTA launched its own AI trip planner.
Google is now showing AI Overviews in the travel space, and they spiked to ~6% of queries in November.

1. How has the travel industry changed since June?

Y/Y SSI Visibility growth remained positive in 2024 until October (SSI = SEO Site Index, an index reflecting the SEO visibility of various industries and verticals). 2024 will be a strong year for travel despite softness in Q4.

Travel makes up ~5% of total visibility across all industries over the last 2 years.
Since the beginning of the year, organic visibility is down -6.4% but up 6.9% since December 2022.
Overall, market demand growth has slowed this year.

Travel growth slows down

In 2024, global travel demand recovered to 96%, but post-pandemic travel revenge is cooling as disposable income growth slows.1

In the first 7 months of 2024, 11% more tourists traveled globally than in 2023, but -4% less than in 2019.2
Broken down by region: Asia Pacific -18%, Europe & America -3%, Africa +7%, Middle East +26%.
US Air passenger growth: +6%, foreign visits +24%.
US Hotel room demand down -1% while short-term rental is up 1%. US group room demand is up +9%.3

67 out of 120 destinations around the world had recovered 2019 arrival numbers in the first half of 2024.

In the first Deep Dive, I established that SEO is the most important user acquisition channel for most travel players. SEO traffic cannot exist without searches, and searches in 2024 fluctuated.

Total travel searches reached record highs in 2024 despite a soft start.

Based on a keyword set I track across the industry, 71.5% of total search volume comes from attractions, 16% from flights and 7.4% from hotels.
All keyword categories except for vacations were up in Q3 2024 (see below).

The fastest growing keywords over the last 6 months were related to all-inclusive resorts, like “all inclusive holiday vacations” (1,100 MSV, +16%) or “mexico all inclusive resorts adults only” (1,900 MSV, +13%), with growth rates between 10 and 36%.

2024 started with search softness but recovered in April. Similarweb data confirms the trend: 2023 saw much stronger y/y growth rates.

How did search volume affect traffic to hotels, OTAs and airlines?

OTAs capture most SEO visibility, followed by reviews and hotels.

Marriott has been running away from the rest of the pack in non-branded and total SEO traffic.

Hilton passed Hyatts total organic traffic in May. But all three, Hilton, Hyatt and IHG, compete very closely, and all saw gains since the beginning of the year.

Airbnb, Hotels.com, and Booking are in a tight race in the US. Only VRBO and HomeToGo are far behind.

Globally, Booking dominates the OTA industry and has seen strong growth in 2024: +12.9% from January to November.

In the US, it’s a much tighter race between Airbnb, Hotels.com and Booking. Only VRBO and HomeToGo are far behind.
In May, Airbnb (+22%) took market share from Hotels.com (-7%). In June, VRBO (-16%) also dipped.

Delta and United made almost 85% of profits in the US airline industry in the first 9 months of 2024 through upselling. On one hand, customers are more willing to pay for a more comfortable experience after the pandemic. On the other hand, Delta and United have been putting a price tag on everything so customers can upgrade their experience. Less than half of Delta’s revenue this year came from coach tickets.4

American Airlines gets the most total organic traffic after passing Southwest in July 2020, but United leads in non-branded traffic.
American Airlines gained +46% in non-branded traffic since January.
Spirit is at the bottom of the totem pole when it comes to non-branded and total traffic. The airline recently filed for bankruptcy after a failed merger with JetBlue. Competitive airlines have competed with Spirit’s low-cost offering, putting pressure on its returns. The stock is down -99% since the beginning of 2024.5

The airline has lost more than $2.5 billion since the start of 2020 and faces looming debt payments totaling more than $1 billion in 2025 and 2026.

Implications

The fact that search volume hits new records suggests the SEO travel market is growing, not as fast as in 2023, but still positive. However, the outstanding question is whether more traffic will turn into more revenue - and that’s where I’m not sure. Consumers have spent a lot of their disposable income, and the revenge travel honeymoon phase is over. Deloitte’s travel report for 2024 suggests that leisure travel is taking a dip. 32% of a sample of 4,000 said travel is too expensive, up from 24% last year. 14% plan to travel but spend less.6

So, the question is how travel companies can quickly validate whether keywords that get more searches also translate into revenue. And the way to do this is through advertising. I’ve already suggested that advertising has to be a trained muscle in the travel industry. However, companies should not just go after Google’s travel SERP features but also use regular search ads to validate keywords.

Another approach is optimizing for longtail keywords that indicate savings or cheaper offers, like “cheap flights” or “cheap all inclusive resort”. Deal landing pages for specific months have shown strong traffic, especially for OTAs.

2. What works in Organic Growth for OTAs right now?

Google prioritizes brands over aggregators. The trend I first noticed in September (read the Memo) continues. The reason could be Google reacting to consumer behavior. Skift research found young Americans under 35 prefer credit card portals:

Young Americans are shunning online travel giants like Expedia and Booking.com in favor of credit card travel portals, such as Chase Travel and Capital One Travel.7

That being said, OTAs still have a lot of opportunities. And they’re leaning into it.

Expedia’s Flight Routes subdirectory gained 100% traffic Y/Y (now at ~90k monthly visits). Those page types were redesigned and improved, as we can see in the Ahrefs inspection report.

Expedia’s pages remind me a lot of Kayak’s flight routes, which I wrote about in the first deep dive (read it).

Kayak added a whole new section to its flight route pages with data and content for the cheapest times to fly and book flights. The charts and graphs are interactive and contain updated information from the last 2 weeks. The whole experience is highly relevant and easy to navigate.

Google has not rewarded Kayak’s flight route pages. Their impact is likely masked by sitewide headwinds from the March and November core updates. Google’s /travel subdirectory keeps going, though.

Booking’s /flights directory has grown significantly since August. Expedia and Kayak are not the only ones going after this opportunity: Booking added +90% more route pages (now at 126k) and +25% more destination pages (now at 23k), which have gained over 100% organic traffic together in the last 6 months.

they gain significant ranks for keywords with the pattern “flight to {city}” or “flights to {state}”
examples: www.booking.com/flights/destination/city/us/las-vegas.html, www.booking.com/flights/route/bangkok-bkk-koh-samui-usm.en-gb.html

Hotels.com launched 1,000 new all-inclusive pages, but total traffic declined - what happened?

It’s the quality issue I describe in SEOzempic:

Compare www.hotels.com/co10233142-at6/all-inclusive-hotels-in-puerto-rico/ vs. www.hotels.com/de1465061-at6/all-inclusive-hotels-maunabo-puerto-rico/.
The page for Maunabo has only one result, so why should Google rank it? Listing or category pages only make sense when they have several products, otherwise it doesn’t provide more value than the product (property) landing page. There’s no reason it should exist.
The team might have applied a logic to the creation of new landing pages that also included small towns with not enough inventory to stand on their own. The best way forward is to remove those pages again, or noindexing them until they have more properties.

Implications

The way for OTAs to win is monitoring emerging trends, like flight routes, and building high quality landing pages quickly. But they need to master two challenges:

Quality. As we’ve seen at the hand of hotels.com, teams need to be careful with launching “empty” listing pages.
Domain health. No new landing pages can outrun a negative impact from Google updates. As I’ve written in (Hard)Core Algorithm Updates, Google updates are the #1 risk for organic traffic. They can hold any net-new efforts back, so teams should get out of that zone as quickly as possible by cleaning up technical, content quality and engagement issues.

Sometimes, filling a keyword gap you’re not yet serving can also work. Expedia, for example, only launched a last minute deals pages (www.expedia.com/lp/b/last-minute-flight-deals) in June this year, but with great success.

2.1 What are OTAs building in AI?

For the first time, we’re starting to see real returns from AI features and products. Four big OTAs launched generative AI improvements, of which some move the needle on traffic, others on conversion rates.

Deloitte found that users book about a third of travel recommendations from Gen AI. Adoption has not increased much, which could be tied to the step changes of the technology. We might see more adoption with better models.

Travel is one of the prime candidates for AI disruption. Why? Traveling is a mix of exploration, creativity and planning - all skills AI is already good at.

Tripadvisor’s AI Review Summaries grew organic traffic to review pages by 2x. The number of indexed review pages has not increased, which is a strong indicator that AI reviews were the driver.

Review pages for hotels, attractions, restaurants, etc., now show AI-generated summaries. Tripadvisor has two types of summaries: an overall and an attribute summary. Tripadvisor surveyed over 6,000 users about what attributes they care most about.

We’re pleased to announce, new AI-powered feature to Tripadvisor.com, Review Summaries, which provides concise summaries of recent traveler reviews on a hotel based on user-identified quality attributes. You can read a summary that describes how clean a hotel is, then skim through review quotes that were used to generate the summary itself. We’ve taken the content that you care the most about, and we’ve made it much easier to consume, all while staying true to the voice of the original traveler.8

AI Summaries save time. The Tripadvisor team used RAG to ground a Chat GPT 4 model in user reviews and BERT to extract key quotes.

Our goal with Review Summaries was to make as much of this content as easy as possible to digest, but also to capture the broad spectrum of positive and negative opinion without favoring one side or the other, and without biasing the AI.

Booking launched AI-enhanced search, Q&A and reviews. For now, the AI features, which allow users to search in natural language, are only available in the mobile app.9

A Booking-commissioned survey found that “41% of all travelers stating they would be interested in using a personalized, curated itinerary driven by AI”.

Similar to Tripadvisor, Booking is investing heavily in AI:

1/ Smart Filter is a new AI feature that allows users to specify their search in natural language instead of using the filter function

Travelers can use the Smart Filter tool to describe their ideal property in their own words. For instance, a couple traveling to Amsterdam for their honeymoon might type, "Hotels in Amsterdam with a great gym, a rooftop bar, and canal views from the room." GenAI then scans Booking.com’s entire inventory to automatically apply the most relevant filters, saving time and effort while delivering a tailored list of properties that match their preferences. This feature removes the need for manual filtering, making it easier for travelers to find the perfect stay.

2/ Property Q&A works in the same way, just for properties, eg hotels. Booking also launched AI reviews like Tripadvisor, but I can’t assess the impact before they launch in the web app.

To help travelers make even more informed decisions, Booking.com is testing Review Summaries, designed to provide key insights about a property without the need to browse through numerous reviews. After further optimization, the tool will further distill reviews into tailored summaries to highlight what matters most to them, whether that is parking availability or wheelchair accessibility.

3/ Booking is also rolling its AI Trip Planner, which originally launched in June 2023, out to more markets and users.10

Expedia built its own version of an AI trip planner, an AI-assisted help center and - you guessed it - AI review summaries. Traffic to Expedia’s hotel information pages has been down since AI reviews launched in May. Why are they not seeing the same impact as Tripadvisor? Most likely because Expedia only shows a few reviews, but most are behind a popup and not indexed by Google.

Expedia launched a few more stand-out AI products:

1/ Romie, “the travel industry’s first AI assistant designed to ‘roam’ the world with you and have your back at every step of your trip.”11

Users can invite Romie to a group text chat and get travel suggestions or ask it to summarize the conversation and come up with travel recommendations, Get itinerary suggestions based on their emails or get alternatives when weather or other disruptions cross travel plans.

2/ Expedia also launched Travel Shops, which are landing pages or hubs where content creators (influencers) can show off their itineraries. They’re published in the native app for now but could also be leveraged to drive SEO traffic when launched in the web app.

Trip.com launched TripGenie and sees 30-40% higher conversion rates.12

The amplified capabilities of TripGenie are the result of prior iterations, beginning with the initial launch of the AI travel assistant TripGen in February. By July, it served travellers in over 200 countries and regions. With twice the order conversion rate and a retention rate 30-40% higher than average users, TripGen has demonstrated its value.

TripGenie launched the mobile app in July last year after testing an early version in February.

Just like Expedia, Trip.com shows AI summaries behind a popup, likely not benefitting from the enhancement in SEO.

Implications

All OTAs are launching AI trip planners, assistants and summaries. So far, only Tripadvisor benefits from AI-generated review summaries by having them on the page instead of in a popup. It seems that AI products and features are successful. Any business dealing with reviews or listings would likely benefit from similar features. If they want the SEO benefit, they need to make sure Google can render and index them.

3. What are newcomers doing well?

I’ve been writing a lot about the big players in the space. And for a good reason: 1% of sites capture 57% of the travel market (as mentioned in the first Deep Dive). But what about the newcomers? What aspect of the market do they focus on? What are they doing well that we can learn from?

I analyzed over 200 new startups in the travel space and zoomed in on the 18 most interesting ones.

Peek
Headout
Projectexpedition
Hopper
Vio
Kimkim
Holidify
Thehomelike
Stayforlong
Tourscanner
Roadsurfer
Blueground
Hipcamp
Holidu
Wander
GetYourGuide
Travelperk
Layla.ai

Later-stage companies have higher SEO visibility than young companies. The chart above shows the strong relationship between companies that raised more money and drove more organic traffic (correlation: 0.637). The wrong conclusion would be that more money means more SEO Visibility. Instead, you’ll find that it’s the time on market that makes the difference. Established companies are more likely to explore SEO as a revenue channel over time. They might fare better investing in SEO early on, though, since almost 90% of companies have a marketplace model that’s perfectly set up for product-led SEO. A missed opportunity.

The keys to success for newcomers is to avoid the mistakes of the big players and lean into where they’re slow:

Superior AI experiences. Agile startups could build in weeks what might take a giant like Expedia months.
High bar. Avoid shipping pages at scale with 1 or fewer properties. Set an extremely high bar for user experience.
Focus. Going after an underserved market is always a good challenger strategy. Many newcomers on the list focus on niches like luxury short-term rentals or specific geo regions.