Leading hotel accommodation provider Hotels.com offers 85 sites globally with localised content and deals from nearly155,000 hotels worldwide, ranging from luxury 5-star properties to B&Bs.
Here Breaking Travel News sits down with Matt Walls, vice president of Hotels.com to discuss global hotel trends, the rise of China, the impact of the Olympics 2012 and the vast opportunities presented by the mobile travel space.
GLOBAL HOTEL RATES SNAPSHOT
Breaking Travel News: What are the implications of your recent hotel price index survey, which showed that rates are bouncing back but are now at 2005 levels?
Matt Walls: Excluding the effects of currency fluctuations, hotel prices globally increased by 4%, helped, for instance, by the recovery of business and leisure travel in the US, as well as prices bouncing back in Asia, particularly in Japan and Thailand after the natural disasters in 2011, and the growth in the numbers of travellers from China.
This is the first time in five years that we have seen the average price of a hotel room increase in all regions worldwide. In some areas, the increase was moderate, such as in Europe and the Middle East as well as Latin America with just a 1% rise but, in contrast, the Pacific region gained 6%.
For hoteliers, this is a good sign as it seems that confidence has returned to the market, the world is travelling again and the recovery is well-established. And, for travellers, it is a great time to travel as prices are still a long way from their 2007 peak.
BTN: Latin America, Europe and the Middle East seem to be flagging, with recovery of just 1%. To what do you attribute this?
MW: The slow growth in Europe and the Middle East is primarily attributable to the Eurozone crisis, which kept prices low in Southern European destinations, such as Greece and Portugal.
In the first half of 2011, traditional Southern European destinations like Italy and Spain benefited from tourists who were looking for ‘safer’ alternatives to those areas affected by the Arab Spring. This changed in the first six months of this year, as this region was relatively calm which led to widespread price increases in countries such as Egypt, Tunis and Morocco.
Despite the modest rise of 1% in Latin America, the region was still the second most expensive globally with individual countries recording a strong performance. Brazil, which overtook the UK as the world’s sixth largest economy earlier in 2012, is obviously one of these countries. We saw a significant growth here fuelled by business and leisure travellers. And we expect to see this continue in the run-up to the two major sporting events in the country- the FIFA World Cup in 2014 and the Olympics in 2016.
BTN: Meanwhile the Pacific, North America and Asia have all seen a greater increase in hotel prices. Do you expect this trend to continue?
MW: Yes, certainly in the short-term. Prices in Asia bounced back after a turbulent first half of 2011 with the crises in Japan. With one of the highest occupancy rates worldwide, hotel rooms in the Asian business hubs, such as Hong Kong and Singapore, are in short supply and this always leads to higher prices. The expansion of low-cost carriers in the region is also stimulating travel.
In Australia, the continuing resources boom means that space is at a premium, particularly in Western Australia with international business visitors vying with mining executives for rooms.
Since 2010, we have seen a slow recovery in the US market, following an increase in conference and business travel combined with higher consumer spending. How much this is affected in the longer term by the ongoing crisis in the Eurozone remains to be seen.
BTN: With Chinese travellers on the rise, you have launched a dedicated Chinese International Travel Monitor. What has this demonstrated? What is your advice to hoteliers looking to tap into this market?
MW: With the number of Chinese international travellers estimated to overtake those from the US and Germany in the next few years, this is rapidly becoming a very important market for hoteliers and how they react to this trend will be the key to their success in attracting these lucrative visitors. Our Chinese International Travel Monitor showed that many hotels have already recognised this and are introducing new services such as Mandarin speakers, translated materials, Chinese menus and entertainment options.
In addition, the CITM revealed the changing face of the Chinese traveller. Many hoteliers who took part in the study said they feel that Chinese travellers are becoming younger, more confident, savvier online and are more familiar with foreign cultures and customs.
With the ongoing economic uncertainty in other key markets, catering to Chinese travellers should be high on the list of priorities for all hotels.
BTN: What are your overall thoughts of the impact of The Olympics for London hoteliers?
MW: In the lead up to the Olympics, expectations were certainly high.
The average daily room rate in January 2012 for the Olympic period was 119% higher than the same time the previous year. However, as the Games approached and more rooms became available, prices started decreasing. In fact, by the last week of the event, they had dropped 3% below prices for the same period in 2011. This was great news for consumers who perhaps thought it might be best to stay away from London but, once the Games began, took a last-minute trip to the capital to absorb the tremendous atmosphere.
There is no doubt that the legacy for London will be very positive. With new hotel openings, more than 12,000 hotel rooms were added to the capital, bringing the total to more than 140,000. Many other properties also completed major refurbishments. This improved hotel stock, together with the benefits of the exceptional global media coverage achieved throughout the Games, means that London will reap the rewards in 2013 and beyond.
BTN: What are your predictions for hotel booking activity for the second half of 2012?
MW: It is always hard to predict how prices could change moving forward, as external effects cannot be foreseen, as we saw in 2011 when both economic uncertainty and natural disasters had a major impact on different regions around the world.
WHAT’S NEW FOR HOTELS.COM
BTN: What makes Hotels.com a unique hotel booking service? How do you maintain your cutting edge?
MW: At Hotels.com, we pride ourselves on being adaptable and moving quickly. Whilst we are a big company, which has grown substantially over recent years, we try to maintain a ‘start-up’ feel, giving us flexibility to grow, change and take advantage of the latest and best technology to help our fulfil their hotel booking needs.
In 2008, we launched our business-unique loyalty programme Welcome Rewards, which was extended to the UK in 2010 and launched globally in 2011. Travellers get a night free in one of 65,000 partnering hotels for every ten nights stayed.
We have also been at the forefront of mobile innovation in travel, with our app products and mobile web receiving outstanding feedback from both users and the industry.
BTN: Which markets are you looking to increase your presence in over the next few months? Do you have your eyes on any particular hotel group?
MW: At the moment, we run more than 85 Hotels.com websites worldwide, with 33 sites in 24 languages in EMEA. This year, we launched a Spanish language site in the US and a Hebrew site to provide our customers with tailored content in their own language.
BTN: How important is it to be able to offer a loyalty programme? Do customers make the most of Welcome Rewards on Hotels.com?
MW: We’re really proud of our Welcome Rewards loyalty programme, largely because of its simplicity. Customers just sign up and, when they have booked ten nights – either separately all in one go, they earn one night for free. In addition, unlike most reward schemes which are usually specific to one brand, Welcome Rewards allows customers to accumulate and redeem their ten qualifying nights across a range of 65,000 independent and chain hotels as well as B&Bs and self-catering. One of the other perks of the programme for customers is that there is no blackout period.
THE RISE AND RISE OF MOBILE TECHNOLOGY
BTN: What are today’s travellers looking for from their hotel booking experience?
MW: People are looking for ease, convenience and a service they can trust, together with great value prices. The booking process should be as easy and quick as possible but with plenty of filtering options to suit individual needs. Speed is especially important for travellers who need a hotel for the same night and that’s why we are investing in our mobile applications.
BTN: What new trends are you seeing from travellers searching / booking travel online?
MW: Mobile booking. The explosion of Smartphones and, more recently, tablets mean that consumers are more and more inclined to use mobile booking for essentials like travel. A recent report stated that, by the end of 2012, there will be more than 117 million tablets shipped around the world – this level of adoption is a clear indicator of the ‘mobile booking’ trend.
We now live in a world where instant gratification is the norm, whether it be buying a book, ordering your groceries or booking a hotel – all can be completed on your bus ride home.
BTN: How many hotel.com mobile apps have been downloaded since they launched last year? What are the most popular aspects of these apps?
MW: Since the launch of the Hotels.com mobile app 18 months ago, we have had millions of downloads. Hotel stays are increasingly being booked last minute via the apps, rather than weeks in advance. The “last minute” concept is accentuated as users book on the go – whether they are in an unfamiliar city, missed their flight or are on a road trip.
BTN: What percentage of your customers are using mobile technology to search / book their trips?
MW: The number of bookings taken via our mobile apps is now in the double-digit percentage of our gross bookings and 60% of all these are for stays on the same night.
BTN: What are your predictions for the online travel space over the next five years?
MW: Online bookings will continue to grow globally as connection speeds are improved and confidence increases in the less mature markets. Mobile will continue to be the fastest-growing section of the market, particularly as companies focus on constantly upgrading their apps.