2017 Outlook on Hotel Direct Booking
Skift Take
This report analyzes the state of hotel distribution with a focus on direct booking. Rather than taking the view that it’s a booking war, we believe the landscape is far more nuanced where hotels need to take a holistic approach with their distribution channels. Readers will gain insight from our interviews with over 20 executives across the hotel and online travel ecosystem along with the results from our survey of 370 hotels around the world, which was powered by Skift and Trivago.
Report Overview
This report analyzes the state of hotel distribution with a focus on direct booking. Rather than taking the view that it’s a booking war, we believe the landscape is far more nuanced where hotels need to take a holistic approach with their distribution channels. Readers will gain insight from our interviews with over 20 executives across the hotel and online travel ecosystem along with the results from our survey of 370 hotels around the world, which was powered by Skift and Trivago.
Featured Quote
“PEOPLE CHARACTERIZING IT AS A BOOKING WAR, I WOULDN'T AGREE WITH THAT. WE'RE ALL PART OF THE TRAVEL ECOSYSTEM, AND WE'LL CONTINUE TO COEXIST AND WORK TOGETHER.” — CHRIS SILCOCK, EXECUTIVE VICE PRESIDENT & CHIEF COMMERCIAL OFFICER, HILTONWhat You'll Learn From This Report
- What should count as a direct booking
- The difference between paid and unpaid digital direct
- How hotels can and cannot compete effectively on metasearch
- How hotels are engaging OTA customers to build their loyalty base
- How CPC on metasearch can be riskier than CPA, but more cost-effective when done well
- How traditional travel agents can compete on domain expertise rather than inventory
- How much traditional travel agents charge per booking and how that number is under pressure from the large hotel groups
- Corporate travel trends and economics to the hotel
- Estimates for the share of bookings across non-digital direct (phone, email, walk-ins, group), unpaid digital direct, paid digital direct, OTAs, GDS, traditional travel agents, and managed corporate travel for both large brands and independent hotels
- Effective commission rates for the OTA, metasearch, metasearch Instant Booking model, GDS, traditional travel agent, and corporate travel manager
- Why OTAs have dominated metasearch bookings
- How the fee structure works for GDS bookings
- Implicit costs of digital and non-digital direct bookings
- The economic value of moving a booking from an OTA to direct including the impact of advertising and opportunity costs
- What issues impact the optimal distribution mix
- What Hilton, Marriott, IHG, Best Western, Wyndham, Choice Hotels, AccorHotels, and Hyatt are doing to drive direct bookings and what their booking distribution mix likely looks like
- How hotels can improve their chances of “winning” the OTA-booked guest to book direct the next time
- What leading independent hotels are doing to win booking share
- What share of Expedia’s and Priceline’s OTA bookings likely comes from the mega-chains and the potential financial impact from channel shifts
