Coronavirus has affected travel. How exactly?

The novel coronavirus, which began in December 2019, is affecting hundreds of millions of people across the globe. In addition to the outbreak’s disruption to everyday life, it also presents a significant hurdle for businesses and organizations as they grapple with the increasing level of uncertainty.

Our previous blog post highlights how coronavirus has hampered the performance of key consumer-centric industries in the U.S. In this post, we’ll examine how leading players in the travel industry are feeling the vibrations of the pandemic, and how companies are responding.

Surprisingly, Traffic Is Not Negatively Affected

Contrary to initial expectations, there hasn’t been a considerable decline in traffic. Our data shows traffic has increased year-over-year at an average growth rate of 2.5% for the top airline websites in the U.S., and a growth rate of 3% for OTAs (online travel agents) and accommodation sites.

Airbnb, the largest home-sharing service provider, had the most significant increase in traffic, climbing 12% between December 2019 to February 2020, compared to the same timeframe of the previous year. Another notable upturn was for American Airlines, whose website had 116M visitors from the U.S. this year; whereas last year it received 110M. visitors.

However, when we take a closer look at the last 28 days, we can see two different trends: while overall traffic to airline carriers increased, hotels and OTAs have seen a steady decrease. On average, traffic to the airlines in our set increased by 33% between February 16 and March 14. Some of this traffic may have come from new visitors interested in cheap ticket prices or existing customers looking to cancel their tickets.

Are Cancellations Skewing the Numbers?

As governments continue to impose travel limits to slow the spread of COVID-19, cancellations seem to be the primary explanation for this recent increase in traffic. Looking at specific pages containing the term “cancel” or “cancellation” reveals significant growth in desktop visits to all the sites in our set. Priceline.com’s cancellation traffic has spiked by a thumping 58% since January, the highest of its OTA peers. Airbnb.com has similarly seen traffic rise by 28%, most likely due to hosts canceling stays in countries hit by coronavirus. Recently, the company announced that it is allowing hosts and travelers to cancel reservations in China until April 1st without any penalty.

Zeroing in on united.com and southwest.com provides further indication of this trend. Traffic to the airlines’ cancellation pages has decreased by 7% and 6%, respectively. This makes sense since both companies mainly operate within the United States, where initially there were only imposed restrictions for people arriving from China, South Korea, Iran, and Italy. In comparison, delta.com and aa.com, the two leading international flight operators in the U.S., have seen increased traffic to their cancellation pages.

To some extent, we also see that the share of traffic is also rising within the scope of the total site traffic. While Airbnb and Booking have been able to curb the flow of cancellations, with the share of traffic to cancellation pages decreasing by 0.2% and 0.1% respectively since last year, the majority of websites have seen this percentage go up. Hotels.com, in particular, saw its share increase from 1.06% in February 2019 to 2.04% in February 2020.

“Coronapages” Are Driving Traffic, Especially for Airlines

Help pages, which offer information and updates on coronavirus, are also seeing higher numbers of visitors during the past two months. These pages’ traffic was 600% higher in the first two weeks of March than it was for all of February, with Delta, United, and American Airlines owning 74% of the traffic share. Of lodging providers, Airbnb’s information page has the most traffic, holding 12% of traffic share in March.

On the other hand, some have been hesitant to make coronavirus information pages available until the threat becomes more serious. Southwest Airlines, Hotels.com, and Priceline appear to have only launched their specific coronavirus information pages on March 2, March 5, and March 6, respectively. On the other hand, Delta, United, and Airbnb reached their apex on March 12, the day after U.S. President, Donald Trump, addressed the issue, blocking most visitors from entering the U.S. from Continental Europe.

Usage of Travel Apps Is Also Down

Given that apps are a reliable indicator of loyalty, we also dove into this ecosystem. For all the leading players, Daily Active Users (DAUs) have decreased over the past 28 days, with Airbnb experiencing the steepest decrease, down 43%. However, Airbnb still has 3X the DAUs of the average of the rest of the competitive set. Priceline, meanwhile, suffered its highest decline in traffic, down 28% between March 10th and 11th, the latter being the day of President Trump announcement.

Responding to Dwindling Demand Through Paid Search

The decrease in conversions among travelers means accommodation platforms need to make up for this through paid acquisition channels. When comparing the last 28 days to December (before coronavirus reached the U.S.), we see that paid search has accelerated for accommodation websites, and particularly for Hotels.com, which rose by two percentage points, from 17% to 19%. We expect this trend to intensify as the virus continues to spread across the country.

Will 2020 Be the Year of Staycations?

Another assumption we checked using the Keyword Generator Tool was whether or not travel sites are doubling down on paid keywords for popular destinations in the U.S. We were especially curious about this given the fact that international flights are limited in various locations in Asia, Europe, and North America.

What we did witness, was that a group of keywords related to “Las Vegas Hotels” is already starting to see an increase in paid traffic: from 347K search visits in January (7% of which were paid) to 438K in the last 28 days (54% of which were paid).

The main upticks were Hotels.com and MGM Resorts, whose paid search traffic increased by 20% and 72% over the past month. This escalation in traffic is even more significant, considering analysts are predicting that Google is expected to experience a 15% decline in travel ad revenue in the first three months of 2020.

Searches for hotels and places to stay in New York also interestingly rose by more than 20% for Hotels.com, from January to February. Additionally, traffic has increased for Expedia, Kayak, Hilton, Nustay, Priceline, TripAdvisor, and Marriot — which all draw in over 2% of traffic.

What does the future hold for travel?

As the situation evolves, travel companies need to continually follow and understand the latest developments in order to minimize the impact of cancellations and delays. While coronavirus is likely to continue to hit the industry in the coming months, companies would be wise to offer continuous detailed information about the crisis, keeping both existing and potential customers engaged and feeling at ease. Other possibilities would be to increase local advertising for domestic locations, as seen in Las Vegas and New York.

The post was co-written with Alisha Kapur, an industry consultant at SimilarWeb specializing in travel.

Alisha will be hosting an exclusive webinar on March 24th: Insights on the Impacts of Coronavirus

Sign up for the webinar to learn more about how the pandemic is affecting businesses in travel, retail, media, and more.

Originally published at https://www.similarweb.com.