Wednesday, February 25, 2015

U.S. Online Travel 2015 - Hotels - Part 1

Going into 2015, Phocuswright released their U.S. Online Travel Overview Fourteenth Edition. The Hotels & Lodging segment of the report captures a snapshot of a hospitality industry continuing its rise out of the malaise of the great recession. Catching fire in 2013, the industry’s recovery is expected to maintain its strong level of growth through the coming year.

 

The State Of Hospitality

This growth has been and will remain ahead of the overall U.S. economic recovery, ADR compared to GDP across the same time span. The hospitality rebound has been experienced to a lesser degree by smaller, budget and mid-priced hotel properties away from large cities, as those communities cope with a slower pace of recovery. However, higher priced and luxury hotel properties located throughout larger metropolitan areas have seen a rejuvenation in business travel, resulting in reduced supply. ADR showed a 4.4 percent increase in August of 2014, as compared to the previous year. As a result of less room inventory, combined increased demand of 4.3 percent.

Industry wide, the Phocuswright report expects accelerated growth for the U.S. hotel market will be experienced during the course of 2014 to 2016. There was a 6 percent room revenue growth rate in 2013 over 2012, reaching a total of over $122 billion for the year. The Phocuswright report cites, Smith Travel Research in predicted gains over 9 percent during the next two years. If these projections prove correct, U.S. hotels will be generating about $155 billion in revenue in 2016. This would amount to an astounding 34 percent increase when compared to 2012.

Online sales of hotel inventory are growing at an even faster rate than the rest of the industry. During 2013, hotels saw a 13 percent leap in online sales at over $42 billion. Double-digit growth in online sales is expected to continue through 2016. Phocuswright predicts that hotel bookings online will make up 38 percent of total sales in 2016. 

In the realm of hotel brand website sales, the industry’s push to improve functionality of and marketing via hotel websites is paying off. Hotel website sales experienced a gain of 11 percent in 2013, as reported by Phocuswright. The battle between hotel brand websites and online travel agencies for online inventory sales growth, however, clearly tips in favor of the OTA’s. OTA sales are growing at a significantly faster rate than brand sites, with a growth rate of a 15 percent increase in 2013, attaining $19.7 billion for the year. This growth will be sustained going forward to 2016 when it should reach over $28 billion.

In the second part of this series we will look further into the impact of OTA’s on the hotel industry and hoteliers efforts to stem the tide. 


Posted via OnFast - http://www.OnFast.com

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