The booking and marketing in U.S. hotels are quickly outpacing total revenue growth. On the other hand, recent direct-booking efforts among the top U.S. hotel companies seem to be doing little to stem growth of the Over-The-Airs, as stated in recently released reports.
Based from the study undertaken by Kalibri Labs at the behest of the American Hotel & Lodging Association (AH&LA), U.S. hotel room revenue rose 7.3 percent to $145.4 billion, last year, transaction costs in the form of commissions and wholesale room discounts rose 10 percent to $25 billion.
Moreover, Travel Weekly states that the percentage of bookings for U.S. hotels with room rates of more than $100 a night which were handled through an OTA, a GDS, a travel agent or a travel wholesaler rose to 27 percent last year from 19 percent in 2011, implying a forty percent surge in indirect bookings over the last five years.
By means of an OTA reservation costing a hotel as much as 25 percent of room revenue, such a shift has spurred a raft of campaigns endorsing direct booking, providing discounts and value-adds to loyalty members who book using hotel websites and call centers.
The numbers do not really jive with those put out by Phocuswright, which predicted that the OTAs' share of U.S. hotel revenue will have risen to 19 percent in 2017 from 14 percent in 2010. To compare both, hotel websites' share of bookings will have edge up two percentage points, to 19 percent throughout the same period. The two channels are pulling bookings share away from call center and walk-in reservations.
"Hoteliers must be mindful of the ratio between direct and indirect business," wrote Cindy Estis Green and Mark Lomanno, the Kalibri report's authors.
"They must set objectives for this ratio and spend their customer acquisition funds in accordance with these goals. A focus on the cost of acquisition and solidifying the direct connection with the consumer has never been more critical," they added.
This article is copyrighted by Travelers Today, the travel news leader
