Monday, March 2, 2015

U.S. Online Travel 2015 - Hotels - Part 2

The Struggle Between OTA’s And Hotel Brand Websites


Hotel brands and chains have pushed back and made a concerted effort, during the last few years, to take back some of the inventory distribution lost to online travel agents. However, OTA’s continue to surpass the hotel website and grow at a faster rate. This fact was affirmed in the recently released Fourteenth Edition of the Phocuswright U.S. Online Travel Overview. OTA’s have enjoyed double digit growth rates in recent years, as opposed to single digit rates for brand sites.

The actual percentage of hotel distribution sold by OTA’s is 16 percent, but as stated growing. The OTA’s comprised 47 percent of the industry’s sales in 2013, with the hotel brands themselves making up the majority at 53 percent. Phocuswright’s expectation was for a one percent gain by OTA’s during 2014, reaching 48 percent. Despite the gains by OTA’s, Phocuswright predicts that the total share of online bookings will remain relatively unchanged through 2016. This due to the ongoing efforts of hotel chains to effectively manage their online booking channels and better leverage their own website booking funnels.

Phocuswright predicts gains by hotel websites in sales will reach $10 billion from 2012 to 2015. As hotels make improvements to their websites, telephone customers will migrate over to become website users, producing many of the gains. Also among the methods utilized by hotels to lure travelers away from OTA’s and incentivize them to continue to book directly with the brand, is the hotel loyalty program. Advertising is also a major investment in the efforts made by hoteliers to instill brand awareness and customer loyalty through the hotel website. Phocuswright states that in 2013 hotel advertising spending surpassed $1.8 billion.

Hotels do have the advantage in keeping the loyalty of customers. They are gained by room upgrades, restaurant discounts, or a bottle of wine waiting for them in their room, are examples of ways for hotels to build brand loyalty by making guests aware of how much the hotel appreciates their continued patronage. Another way is to simply provide a level of customer service which stands the property apart from other hotels. Hotel post-booking services, such as mobile concierge and virtual check-in are popular services with hotel guests. 

Hotels are in a love-hate struggle with online travel agencies, but still need them to bring in guests. OTA’s are advantageous for hoteliers for gaining new customers who are only looking for the best price. It is entirely in the hotel’s hands to convert them into satisfied and loyal guests, delighted enough to return again.  


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