The term "staycation”" entered the mainstream travel vernacular in 2008. A staycation is loosely defined as a vacation spent at home or in one’s home state due to prohibitively high transportation costs. To measure Staycation demand, Compete looked for U.S. consumers who were researching on destination and tourism websites for the same state in which they also lived in.

In June 2008 there were 12.9 million Americans researching an in-state vacation, up from 8.7 million in 2007. The 47% year over year growth is a significant jump and is correlated with the increases in travel costs that many consumers are faced with.

New Jersey and New York experienced the largest volumes of 2008 staycation research, while Massachusetts and Pennsylvania represented the largest year-over-year percentage growth. Other states experiencing an increase in local travel interest are listed in the table below.

Should travel marketers take advantage of the increased interest in vacationing locally? While airlines, car rental agencies, and cruise lines may simply be out of luck, the lodging category may be a natural fit. Some destination marketing sites like Connecticut’s ctvisit.com have created content to promote their own residents, but most marketers ignore the segment. This may be a missed opportunity, as 13 million consumers will likely bring with them the disposable income that would otherwise have gone towards transportation costs.

It has been a year since Virgin America launched its website servicing several US destinations. Over this time VirginAmerica.com has notably improved its online performance. Rapid growth in certain locations is a growing threat to carriers that operate in those markets, such as Alaska Airlines in Washington state where Virgin has an expanded presence.

After initially hitting a plateau in late 2007, VirginAmerica.com’s prospect-base has nearly doubled in 2008. Conversion rates – the percent of site traffic purchasing a flight each month – have fluctuated from a low under 1% in the site’s first month to a high of 9% in December 2007. In 2008 VirginAmerica.com has averaged a conversion rate of 5.4%, several percentage points above 2007 levels.

Virgin America currently services seven destinations within the United States. California, with three service points, represents the largest online user base at 167,000 monthly state residents. In July 2008, California based site visitors combined as almost half of all site activity on VirginAmerica.com.

Since January 2008 most Virgin America destinations have shown an increase in online visits. The largest, California, is up a healthy 66%. The most dramatic shift, however, has been in Washington state where activity has surged three-fold since the beginning of the year, positioning it for heightened competition with Alaska Airlines.

Virgin America is growing its online presence dramatically. Within most of the regions that Virgin America flies to, web activity has outpaced standard seasonal growth as routes are added and brand awareness improves. With such significant momentum other carriers need to be vigilant. Competitors on the same routes must watch consumer loyalty carefully, with any shift in airline preference a warning sign that must be addressed.