Collapse of Traffic on Travel Websites in Connection with the Covid-19 Crisis

An Analysis of Online Travel Agencies, International Hotel Chains and Tourism Organisations between October 2019 and April 2020

Online Travel Agencies (OTAs) gained a dominant position in the travel market in just a few years and were the big winners of the globalisation and digitalisation of tourism. But since the beginning of the year 2020, the global coronavirus crisis has completely disturbed the business model of online travel giants:

• Airbnb already announced in early April that the company had raised $1 billion in new funds to fight the impact of the coronavirus pandemic. According to Skift, however, Airbnb is now only worth 18 billion dollars. Originally, investors had hoped for a valuation of at least 40 billion dollars when the company went public this year. The sales forecast for the platform in 2020 is "less than half" of the sales generated in 2019. The company announced on 5 May that it was laying off around a quarter of its 7,500 employees worldwide. In addition to the 1,900-job loss, the company will also take an investment pause.
• Expedia, the world's largest online travel agency besides Booking, appointed Peter Kern as its new CEO in late April 2020 and raised $3.2 billion in fresh capital to combat the effects of the coronavirus on the company's business and the general demand for travel.
• As a direct result of the business slump caused by the Covid 19 pandemic, TripAdvisor announced in early May that it would cut more than 900 jobs, or about a quarter of its workforce.
• The meta search engine Trivago is also struggling with economic problems. In view of a decline in "referral" sales of more than 95 percent in the last weeks of the first quarter, Trivago informed investors that the company has begun to "make changes to its organizational structure", including "significant" staff reductions.
• Even Booking Holdings is striving with the consequences of the crisis. The advertising budget of more than six billion dollars (probably Google's biggest advertising client) has been cut massively. As reported by numerous media, the platform operator Booking.com in the Netherlands has asked for government aid to save its 5’500 employees. At the beginning of May, Booking Holdings reported that total revenues in the first quarter of 2020 had fallen to USD 12.4 billion - still a huge number, but a whopping 51% less than a year earlier (USD 25.4 billion).

Our analysis of website traffic of major OTAs illustrates the extent of the impact of the coronavirus crisis, which has increased significantly since our last analysis with the March 2020 figures, as shown in the graph below.

Fig. 1. Monthly traffic on OTA websites between October 2019 and April 2020 (source: SimilarWeb)

Between January 2020 and April 2020, the websites of Booking Holdings, TripAdvisor, Airbnb, Expedia and Kayak lost about 70% to 80% of their traffic. Booking.com, the most visited travel website with a maximum of 500 million visitors in January 2020, for example, saw its traffic fall by 82% in four months (90 million visitors in April).

International hotel chains show a similar pattern with website traffic losses ranging from 53% (Huazhu) to 98% (AccorHotels) until April 2020. However, the decline in website traffic seems to occur after February 2020, one or two months later than OTAs.

Fig. 2. Monthly traffic on websites of international hotel chains between November 2019 and April 2020 (source: SimilarWeb)

The analysis of the website traffic of the National Tourism Organisations (NTOs) can give us an insight into the impact of the crisis in different parts of the world. This is illustrated in the graph below, which compares the website traffic of 11 NTOs based on data provided by SimilarWeb. In December 2019, Switzerland Tourism was one of the leading NTOs, with 3 million visitors per month, just behind South Korea but well above the figures of European competitors. The analysis of the NTOs' website traffic shows a very strong decrease in traffic on the websites of most NTOs (-53% on average out of 16 NTOs analysed), especially for Switzerland (-76%) and South Korea (-72%). Significant negative effects can also be observed for Germany (-67%) and Austria (-67%). On the other hand, it is interesting to note that the traffic on the South Korean website increased by 20% in April compared to the previous month.

Fig. 3. Monthly traffic on websites of 11 NTOs between October 2019 and April 2020 (source: SimilarWeb)

As far as traffic on the websites of Alpine tourist destinations is concerned, our analysis shows the same trends as for OTAs and NTOs. The 19 analysed Swiss, French and Austrian DMOs lost on average 70% of their traffic between December 2019 (peak season) and April 2020. The losses of individual DMOs vary between 60% and 80% with one exception - Zermatt. The top destination in Valais increased its traffic from 380'000 visits (December 2019) to 430'000 visits in April! In detail, SimilarWeb's data suggest that the proportion of visits from Switzerland, which was 17% in April, has fallen by 30% compared to the previous month. On the other hand, an increase of over 200% in visits from the USA (21% of the traffic on the Zermatt website) and 22% of visits from Germany (11% of the traffic) can be seen. This increase is related to the illumination of the Matterhorn (Project Hope). With the illumination project of the Matterhorn, Zermatt sent out a sign of hope and solidarity to the world during five weeks (24 March 2020 to 26 April 2020 daily) in the difficult time of the coronavirus pandemic. According to Zermatt Tourism, "the projections aroused interest worldwide and provoked reactions that overwhelmed those responsible. Media reports achieved an international coverage of over 700 million. Individual contributions on social media received up to 1.7 million Likes."

Fig. 4. Monthly traffic on websites of 8 DMOs from Switzerland, France and Austria between October 2019 and April 2020 (source: SimilarWeb)

Planning for the summer travel season will take place in May and June. It will be interesting to analyse the evolution of the number of visitors to the websites of OTAs, hotel chains and tourism organisations in one month, as we will be able to draw some conclusions about a possible renewed interest in travel.