Katherine Klahn, Hotel Business
Read the story at: Hotel Business
That is what TravelClick, a worldwide provider of data, ecommerce and Internet solutions for the hospitality industry, has found in a new study. The review is based on data for 25 major North American markets. Data is derived from real reservations pulled from hotels under flags of such companies as Hilton, Hyatt, IHG, Marriott and Starwood.
The group reported that OTAs and GDS continue to experience growth, according to senior industry analyst, John Hach. Mobile and digital channels were driving the industry last year, and are set to continue their reign as power players in the sector. On the other hand, Hach said dial-in bookings are on the decline.
“We don’t really need a crystal ball anymore. We have great insight into how demand is being generated up to a year in advance,” said Hach.
According to Hach, in the last quarter of 2015, OTAs including Expedia.com, Priceline.com and others had 3.5% growth in the transient segment. Brand.com and GDS channels experienced growth as well, increasing 4.3% and 3.8%, respectively. On the other hand, hotel direct—calls made directly to the property and walk-in customers—decreased by 7.2%. Calls to a hotel’s 800 number also decreased by 4.4%.
On a brighter industry-wide note, Hatch said ADR increased across all channels by 2.4% in the fourth quarter of 2015 when compared to the same time period the year before. Hach explained that 2016 has brought continued growth that will last into the next year to segments including OTAs, Brand.com and GDS.
“Based on reservations that are currently on the books for Q1 2016, TravelClick expects to see additional positive growth, particularly for the OTA and Brand.com channels, when the quarter is complete,” said Hach.
Hach also noted that the GDS channel continues to “produce the highest room rate growth in the quarter, up 2.4% year-over-year.”
Though the trend isn’t a surprise to Hach, he said: “Consumers are rapidly migrating from landlines and desktops to booking more and more reservations via digital channels and mobile devices.” In the meantime, hotel brands have been fortifying loyalty programs in an effort to drive booking growth on their individual brand websites. “There’s no question that larger brands are maximizing benefits for loyal customers through direct booking systems. But it’s an ecosystem that works together,” said Hach.
The TravelClick analyst noted that the mobile and digital booking segments have an advantage due to benchmark localization because OTAs allow people to engage fully with the destinations they are researching. “OTAs do a good gob at aggregating travel demand and making sure people are engaged in seeing a destination. They’re engaging customers and providing a full experience,” said Hatch. “Google is doing a good job with that as well, especially since people are beginning to look at destinations on their mobile devices.”