Competitors Website vs App

Part
01
of two
Part
01

Airline Website vs App Revenue

There were no comprehensive statistics found that solidly show the splits between the website revenues and the native app revenues of the specified Allegiant Airline's competitors. This could be due to the slow adoption of mobile apps among the airline industry players. Based on a mobile travel trend survey, 50% book flights using websites and the other half book via mobile apps. Spirit airlines mentioned that around 50% of its domain visitors use mobile devices to access their website.

Airline Website vs App Revenue — HELPFUL FINDINGS

The following is helpful information found that can give a partial picture of the revenues from websites versus from native apps:

GENERAL

  • Based on a mobile travel trend survey, 50% of those surveyed reserve flights using websites. Meanwhile, the other 50% book via mobile apps.
  • As per another report, travel reservations through digital channels will be worth around $190 billion. Around 40% of these reservations will be done through mobile phones.

AIRLINE-SPECIFIC

  • Spirit Airlines mentioned that around 50% of its domain users use mobile devices to access their website.
  • The JetBlue app was downloaded 1 million times in Google Play, but users might prefer to book via website due to the additional features compared to the app.
  • Based on their latest assessment, Frontier Airlines was able to sell 63% of its tickets through direct distribution conduits that include its website and mobile app.
  • Around 80% of Southwest's ticket revenue came from its website sales.
  • JetBlue was able to reduce its distribution costs as most of its customers reserve flights through their website.

YOUR RESEARCH TEAM APPLIED THE FOLLOWING STRATEGY:

We started our search by looking for directly available statistics that show the split between website revenue and native app revenue of Allegiant Airline's competitors. We looked for this information in various airline industry related sites such as the Airline Reporter, Skift, Aviation Week, and other similar sources; digital marketing sites such as Hubspot, Strategy Online, Martech Today, and other relevant sites. Based on this search approach, we were not able to get some solid information on the requested sales split from their websites and their apps. What we found mostly are partial statistics on their digital channels in general. There were also some old data points that are still relevant given that these were referenced prove some of the current statistics.
We then looked for the sources of revenues of the specified competitors in their websites and annual reports; press releases such as those from Cision, Business Wire, and similar sites; business publications such as Forbes, Business Insider, WSJ, and other similar sources. We hoped to find relevant information on where the airlines get most of their bookings. However, what we found from these sources were mostly their revenue data and other marketing-related figures. We also found some breakdown of the revenue from digital sources in general.
We also broadened our scope and checked for digital revenue statistics of other similar airlines. We hoped to find these figures on the websites and annual reports of these airlines. Based on this strategy, we also were not able to find any relevant statistics that can enable us to infer the revenue from various digital channels. What we found are some general information on the digital channels that these airlines are using.
We then tried to determine if there are industry standards or best practices on the portion of the airlines' revenues that should come from websites and digital apps. We looked for this information in airline industry sites associations such as the IATA, IAG, and other similar sources. However, we were not able to find any related information on these sites that highlight the best practices on digital revenue portioning. What we found are general information about the digital channels that are being used by the industry.
We inferred that the reason why the statistics on the specified revenue split is not available could be due to the slow adoption of the mobile app platform among the players in the airline industry. There might not be enough data from the airlines that can be used to come up with a solid figure on the requested revenue split.
Based on the findings from our search strategies above, we have presented some helpful findings in the section above.

Part
02
of two
Part
02

Hotel Website vs App Revenue

Hilton's net returns in 2018 from website users were USD $158.8 million (approx), and from mobile app users, were USD $130 million (approx). For 2019, these are projected to be USD $319.7 million (approx) from website users, and USD $261.6 million (approx) from mobile app users.

Hilton:

Third-party bookings vs Direct bookings for Hilton:

  • Hilton started a campaign called Stop Clicking Around in 2016 to promote bookings by direct means instead of third-party websites.
  • This resulted in a decline in revenue in the first year after the campaign. The annual revenue in 2016 being USD $6.576 billion, and the decline from the previous year being 7.81%.
  • But this changed in the next year as consumers enrolled in loyalty programs increased significantly, from 50 million by the end of 2015 to 66 million in 2017.
  • There was a significant rise in annual revenue in 2017. The annual revenue in 2017 being USD $8.131 billion and the rise in revenue compared to that of 2016 being 23.65%.
  • Currently, as the trend continued, 75% of revenues are collected from Hilton's direct channels.
  • Out of this 75%, half (50%) are web channels—Hilton's websites and apps.
  • Out of this 50%, 40-50% of the business is app-based.

Engaged vs dormant members of Hilton Honors:


Data used in calculation:

  • Hilton Honors currently has more than 89 million members worldwide.
  • Capital returns in 2019 are expected to be USD $1.3 to $1.8 billion.
  • Hilton's net income for 2018 was USD $0.77 billion.
  • Currently, as the trend continued, 75% of revenues are collected from Hilton's direct channels.
  • Out of the of business done through Hilton's direct channels, half (50%) is done through web channels—Hilton's websites and apps.
  • Out of the direct business done through web channels, 40-50% of the business is app-based.

    Research Strategy:

    We used the data provided on Hilton's website as a reference to triangulate the answer. We found that Hilton had started a campaign in 2016 called Stop Clicking Around to promote the use of direct channels and make people avoid third-party websites. This significantly affected enrollment of people in their loyalty programme named Hilton Honors, which currently has more than 89 million members compared to 50 million by the end of 2015. We expected to find the average number of bookings done using Hilton's websites, mobile apps and third-party websites which we could use for triangulation, but we instead found their revenues over the years.

    We later found an interview with the CEO of Hilton, Chris Nassetta where he stated the percentage of business that happens through direct channels (websites and apps) is 75% and the rest of the business (25%) happens through third-party websites. And he also provided more relative that aided the triangulation carried out below.

    Calculations:


    Full year capital returns in 2018 are USD $0.77 billion or USD $770 million.

    75% of these returns come from direct channels.
    Returns from other (not direct) third-party channels = 100 - 75 = 25% of USD $770 million = USD $192.5 million.
    Hence, returns from direct channels is: 770 * 75 / 100 = USD $577.5 million.

    50% of revenue from direct channels is web-based.
    This gives us returns from web-based direct channels that amount to: 50% of USD $577.5 million = USD $288.75 million.

    40% - 50% of the revenue earned from web-based direct channels comes from the Hilton's app. This gives us returns from Hilton's mobile app that amount to: average (40 +50)/2 = 45% of USD $288.75 million = USD $129.9375 million
    = USD $130 million (approx).

    100 - 45 = 55% of the revenue earned from web-based direct channels comes from the Hilton's websites. This gives us returns from Hilton's websites that amount to 55% of USD $288.75 million = USD $158.8125 million
    = USD $158.8 million (approx).

    For 2019:

    Full year capital returns in 2019 are expected to be USD $1.3 to $1.8 billion.
    Average expected capital returns = 1.3 + 1.8 / 2 = 3.1 /2 = USD $1.55 billion. = USD $1550 million.

    Returns from other (not direct) third-party channels = 100 - 75 = 25% of USD $1550 * 25 / 100 = USD $387.5 million.
    75% of these returns come from direct channels.
    Therefore, returns from direct channels is: 1550 * 75 / 100 = USD $1162.5 million.

    50% of revenue from direct channels is web-based.
    This gives us returns from web-based direct channels that amount to: 50% of USD $1162.5 million = USD $581.25 million.

    Returns from Hilton's mobile app that amount to 45% of USD $581.25 million = USD $261.5625 million
    = USD $261.6 million (approx)

    Returns from Hilton's websites that amount to 55% of USD $581.25 million = USD $319.6875 million
    = USD $319.7 million (approx)

    About the estimated number of members using Hilton's loyalty program named Hilton Honors:
    Total Hilton Honors members in 2019 = 89 million.
    Total Hilton Honors members in 2019 that are engaged (have recently booked/made reservation)= 50% of 89 million = 44.5 million.
    Sources
    Sources

    From Part 02
    Quotes
    • "Through the app, Hilton’s 66 million members of its loyalty program can find and book rooms at more than 5,000 Hilton hotels worldwide, including straight from in-app promotions. Guests can also view their past activity, assemble their travel information, get access to free Wi-Fi and earn 500 extra Hilton Honors Points for booking from the app."
    Quotes
    • "Members also enjoy popular digital tools available exclusively through the industry-leading Hilton Honors mobile app, where Hilton Honors members can check-in, choose their room, and access their room using a Digital Key. With more than 74 million members, Hilton Honors offers hundreds of ways to earn and redeem Points. Members can redeem their Points for free nights, premium merchandise, and items on Amazon Shop with Points; make charitable contributions; or gain access to unique events through the Hilton Honors auction platform (hiltonhonors.com/auctions), such as exclusive artist experiences and hotel concert events with Live Nation®, and race experiences with the McLaren-Honda Formula 1 team."
    Quotes
    • "Full year 2019 capital return is projected to be between $1.3 billion and $1.8 billion"
    Quotes
    • "The net income of global hotel company Hilton Worldwide amounted to approximately 0.77 billion U.S. dollars in 2018."
    Quotes
    • "During Hilton’s most recent earnings call, CEO Chris Nassetta said that the company’s Web-direct channels “remain the fastest-growing channels that we have and are growing at a much faster rate than OTA channels.” That rate is three times the rate of all other channels."
    • "He also said that Hilton’s direct channels “represent about 75 percent of our overall business” and that the Web channels “represent about half of that roughly.” And 40 or 50 percent of that Web channel business is coming in through Hilton’s app."