Hotel and OTA Direct Booking Winners and Losers

Blog » Hotel and OTA Direct Booking Winners and Losers

Hotel and online travel agency bookings are more competitive than ever.

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Read this article from Skift.com that explains the winners and losers of direct hotel bookings versus online travel agency (OTA) bookings in five helpful charts.


Expedia and Booking.com, which each doubled Marriott’s TV advertising spend over the last year, are still growing like weeds despite hotels’ direct-booking campaigns. That makes for a tough environment for hoteliers, although some brands will do better than others.

With all the hoopla over hotel-direct bookings and online travel agency retaliation and maneuvering, the balance of power in U.S. market share among top players has been surprisingly even-keeled over the last year with overall share shifts amounting to less than one percentage point up or down for each sector.
From May 2016 to May 2017, according to new bookings data from Hitwise, hotels’ market share of all online bookings in the U.S. fell from 31.36 percent to 30.56 percent, or less than a percentage point, while online travel agencies picked up a corresponding amount, seeing their market share of hotel bookings rise to 69.44 percent, up a bit from 68.64 percent a year earlier.
“To be honest the shift in share of bookings for hotels versus OTAs is quite small, less than one percentage point change for either camp,” said Rochelle Bailis, Hitwise’s global director of content. “Hotels have lost about .8 percentage points of overall hotel bookings year over year.”
To get its numbers, Hitwise uses a panel of 8 million U.S. consumers and tallies their online hotel bookings by enabling rules to track their visits to specific booking-confirmation pages.
If Hitwise’s numbers are to be believed, it doesn’t mean that Marriott, Choice Hotels or Hilton, which have been the heaviest hotel advertisers on U.S. TV in the 12 months through May 2017, according to iSpot.tv, aren’t attracting more direct bookings and stealing some from Expedia, as they have reported.
Reacting to the Hitwise numbers, Bjorn Hanson, clinical professor with the NYU Preston Robert Tisch Center for Hospitality and Tourism, pointed out that the number of occupied rooms in 2017 are greater to date than in 2016. That means the online travel agencies can be gaining share and big hotel chains such as Marriott and Hilton can be attracting more direct bookings, too, he said.
“The online travel agencies gained a little bit more this year and last year brand.com sites gained a little more,” Hanson said.
Some of the share shift could be coming at the expense of offline channels.
Hitwise found that Booking.com, in particular, and Expedia, too, posted substantial market share gains, and Wyndham was on a tear among hotel chains.
Not all of the market share gains and losses — depicted in Hitwise charts below — can be attributed to the success or failure of major chains’ direct-booking campaigns. There are a lot of other factors in play.
Asked to comment on the HItwise findings, Morningstar senior equity analyst Dan Wasiolek said the numbers support Morningstar’s view “that hotel direct booking campaigns would not take meaningful share from the two main OTAs for several reasons.”
Offering steep discounts to loyalty program members “mitigates the positive economics that booking on the hotelier website is supposed to generate,” and “Priceline and Expedia have strong network advantages that are too important for the hotels not to be on,” Wasiolek said.
It should be pointed out that an executive from one of the big chains said Hitwise’s numbers may skew toward leisure travel as it is less likely to pick up business travelers booking chain hotels from behind corporate firewalls. However, the official didn’t challenge the basic trajectory of the findings. {See more about Hitwise’s numbers in a note at the end of this story.]
The results do not contradict earnings and investor calls so far this year. “Recent commentary from hotelier conference calls point to these operators seeing improved growth of direct bookings, but Priceline and Expedia are also having continued healthy growth,” Wasiolek said.
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