5 ways hotels compete with OTAs for bookings
5 ways hotels compete with OTAs for bookings
06 MARCH 2017 8:39 AM

Travelers are more tech-savvy with their hotel searching and booking habits, and hoteliers need to keep an eye out for what’s to come for distribution.

REPORT FROM THE U.S.—Understanding ever-changing traveler behaviors is vital for hoteliers as they compete with online travel agencies for guest bookings.

In a webinar titled “How Airlines, Hotels and OTAs Compete on the Web,” Phocuswright research analyst Brandie Wright shared what hoteliers can expect about travelers’ habits based on booking data. Here are five key takeaways.

Loyalty wins, once again
Loyalty plays a big role in guest booking habits, Wright said, and programs seem to see strong participation numbers overall.

For the hotel segment, Wright said, “eight (out of) 10 bookings made on supplier websites come from loyalty members.”

Phocuswright’s most recent consumer travel report noted that “52% of U.S. travelers belong to an airline frequent flyer program and 46% are members of a hotel loyalty program.”

It’s also possible, Wright said, that this number has increased over the past year with the strong emphasis that hotel companies, such as Hilton and Marriott International, are putting on loyalty programs.

Effort from direct-booking campaigns
Hotel companies spent lot of effort and money marketing direct bookings and loyalty in 2016, and Wright said it seemed to make a difference. Both Hilton and Marriott rolled out direct-booking marketing campaigns in the first half of 2016.

“One of the things that we’ve seen … it appears that the book-direct campaign for hotels have helped drive some incremental share to the direct channels,” Scott Garner, president of data and analytics with ADARA, said during the webinar. “However, I think going forward the big question discussed is, ‘at what cost?’”

Garner said it is likely the industry will experience some pushback from properties offering a discount to drive direct bookings.

Last-minute mobile
Nearly three out of five mobile bookings are made 24 hours before check-in, Wright said. For the time being, it seems like the OTAs are getting more out of this than hoteliers.

“This margin is huge, and OTAs are really capitalizing off this last-minute demand, and last-minute deals are becoming extremely (common) now,” she said.

Wright added that the availability of these last-minute bookings is increasing. Travelers are also “encouraged to delay bookings knowing they can still easily secure their lodging plans last minute” through mobile options, she said.

ADR correlation to mobile device type
Comparing rates between Apple iPhone and Android users, Phocuswright found that average daily rate is highest among iPhone users—averaging at about $270, about $100 more than what hoteliers get from Android users.

Wright speculated that the difference is tied to Apple products being typically more expensive than other options. That higher price point could correlate to more affluent travelers who use those products. She added that Apple users not only have a higher tendency to book travel, but do it more often.

“Additionally, they’re likely to pay for a higher ticket item,” She said. “So, more expensive plane tickets and higher priced hotel rooms.”

Business versus leisure distribution
Garner said 2016 data showed that 53% of business travelers booked direct—compared to 47% of leisure travelers who booked direct. However, on the OTA side, it is flipped. More leisure travelers (53%) booked through OTAs than business travelers (47%).

“Business travelers tend to search a little bit less,” he said. “They tend to know what they want more frequently, (and are) a little bit less price sensitive. In many cases, they could get to the booking process a little more efficiently.”

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