Online hotel bookings on the rise

Market Metrix is releasing the results of the Market Metrix Hospitality Index (MMHI) for the second quarter of 2006. Drury Inns, JetBlue Airways and Enterprise Rent-a-Car ranked number one in hotel, airline and rental car industry customer satisfaction, respectively.
This is the second consecutive quarter that Drury Inns has won top honors in customer satisfaction for the hotel industry. With higher satisfaction scores than much pricier hotels, guests continue to rave about the personal treatment they experience. Jet Blue Airlines and Enterprise Rent-A-Car also continue their momentum after earning the top spot in their respective industries in Q1 2006.
Are “online customers” less loyal?
Online booking for hotels is increasing. In each of the past 6 years more people made hotel reservations through travel portals such as (e.g., Expedia, Travelocity,, etc.) or directly on hotel websites. But how is the rise of online booking impacting guest loyalty? Is the ease of comparing multiple brands and the convenience of booking online creating more demanding guests? Or has the Internet created more fickle guests who are becoming more impulsive in their decisions?
The good news is that despite the rise in online booking hotel customer loyalty is also increasing. But all hotels are not equal.
Among the largest hotel chains, there is a significant difference in loyalty between guests who book offline and those who book online. “Online bookers” tend to be more loyal among higher priced chains ($102 average rate) and less loyal among lower priced chains ($66 average rate).
Guests of higher priced hotel chains are more loyal regardless of how they book their reservations. But higher priced brands get an additional boost in loyalty from their online guests, with the opposite happening for lower priced brands. What explains this difference?
Perhaps people going to higher priced hotels (who tend to be more loyal) go straight for their favored brand online and, the ease of booking online simply adds to their satisfaction. Guests of lower priced brands (who are typically less loyal) that book online may be bargain hunters who are price sensitive and thus less loyal. An alternative explanation is that higher priced brands have more appealing loyalty programs or even online booking bonuses linked to their loyalty programs. So guests may go straight for their preferred brand because they really want the points.