Online hotel sales continue to grow faster than the market as a whole, growing 11% to US$52.5B in 2015. Both supplier direct and online travel agencies (OTAs) are reaping the rewards. However, a slight shift toward OTAs has evened the online playing field versus suppliers for the first time.
NEW YORK – Hotel intermediaries and suppliers continue to fight for share – more fiercely now than in any other segment. While suppliers try to expand the share of bookings that come through their own websites and apps, they face strong competitors. A new report from travel industry research authority, Phocuswright, provides a detailed overview of travel distribution in the U.S., with analysis of trends in market share, technological innovation and consumer behavior.
The online hospitality market is a hotbed of activity as intermediaries and suppliers battle for bookings. New entrants, search and metasearch players and alternative accommodation providers are converging on the space and heightening the competition.
According to Phocuswright’s U.S. Hotel & Lodging: Intermediaries Rise Again, online hotel sales continue to grow faster than the market as a whole, growing 11% to US$52.5B in 2015. Both supplier direct and online travel agencies (OTAs) are reaping the rewards. However, a slight shift toward OTAs has evened the online playing field versus suppliers for the first time.
OTAs now represent half of hotels’ online distribution and that figure will rise to 51% by 2016. New intermediaries such as TripAdvisor Instant Booking and Book on Google challenge the status quo. Suppliers plan to use their ability to promote offers to their best customers as a way to circumvent rate parity and gain share from OTAs.
“Hotels continue to bank on their loyal customers to drive their direct channels – website, mobile site and apps,” says Phocuswright’s senior vice president, research, Lorraine Sileo. “But the relentless growth of OTAs and other intermediaries (such as TripAdvisor Instant Booking and Airbnb) will continue to stall direct bookings. The good news for hotels is that the OTA/supplier direct mix will remain unchanged in the near term.”
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
