Travellers were 57% more likely to book a hotel via an OTA than before the pandemic, according to research from Expedia Group.
The OTA’s comments came as reliance on the domestic leisure market continued and hotels sought to avoid a race to the rate bottom.
Expedia Group, in partnership with, BVA BDRC, looked at travel in the US and reported that 69% booked through an OTA to get the best rate, while 40% booked to get the best room and 35% to compare properties in one location.
Mid-market and upscale hotels were down 13% and 30%, respectively. Budget and luxury remained the most sought-after hotel types, and alternative accommodations including vacation rentals saw “a meaningful increase in preference”. Two-thirds of travellers looking at alternative accommodations cited the lower risk of exposure to the virus in less-populated areas as a key selling point.
Cyril Ranque, president, Traveler Partners Group at Expedia Group, said: “The industry is showing early and promising signs of recovery, but the way people travel - and how they make decisions - has changed. As part of our goal to be a trusted partner to our travel suppliers, we are dedicated to unearthing the insight that will help them reset their strategies and attract the travelers that matter most.”
Speaking at last month’s Hotel Optimisation Two event, AAHOA chairman Biran Patel said that bookings were coming from brand websites as well as OTAs, commenting: “We're trying to get business any way we can. Rates are being dropped, regardless of what brand you're in.”
The view was more nuanced for Frank Reeves, CEO, Avvio, who said: “Excluding city-centre properties, we're seeing a staggering increase in hotel website bookings from the domestic market,” he said, estimating more than a 200% increase in direct bookings through hotel websites, pacing ahead through next March. “In many cases, the surge in domestic demand has made up for the drop in international demand on the hotel side.
Since the pandemic changed the way people travel, Reeves said, the booking journey has changed. “In January, a domestic booker on a hotel site typically [would] engage four to five times within a 24-hour period, from first engagement to making a booking,” he said. “That period has now extended to over eight days, and we have a doubling of the number of interactions on the hotel website.”
He added that guests had questions that an OTA might not be able to answer: “Things like cleanliness, what's open, what's not open. If you read about that hotel on TripAdvisor from six months ago, it's not necessarily the same hotel now. So we see a very different level of engagement between the website visitor, the guests and the hotel. But that ultimately is leading to a significant increase in bookings and hotels, sort of stepping away from just hammering everybody with a ‘book direct’ message, and stepping back and leaning into what that brand experience should really be.”
Triptease chief tease Charlie Osmond agreed, and noted a significant uptick in mobile bookings, as many as triple what it was in the not-too-recent past. “People are being more last-minute,” he said, “so perhaps [they’re] more prepared to book on mobile. But I also think it's just one of those shifts we've seen in so many parts of our lives. Covid has forced us to jump forward three or four years in innovation and the way we behave as individuals.”
Insight: The key issue for hotels when dealing with the OTAs has always been one of education. Hotels need to educate themselves how to use the OTAs to acquire guests and then convert them to loyal domestic bookers, and they need to educate guests that actually, OTAs don’t necessarily offer the best rate.
The good news, as Reeves noted, is that more local business means more direct booking.The customer knows the market better and may have a specific hotel in mind. But as things get more desperate, all bets are off.
One observer of the sector with access to its KPIs confirmed last week that dropping rates was indeed a tactic being used by some hotels - although with only limited effect. As Marriott International CFO Leeny Oberg said last month : “What’s the point of driving down rates, it's not like you're going to drive a lot of extra business to your hotel. So I think there's been decent discipline across the industry because the reality that it's not going to add 10 points to your occupancy, if those travellers aren't travelling.” Not a wildly comforting message, but true enough.
So back to building those relationships. People booking now are in need of two forms of security: is it safe and is it refundable? Hotels must prove both and have a head start on the OTAs, which don’t have feet on the ground and had a questionable time on refunds during the lockdown.