Online hotel bookings climb 20%

27th Oct 2006

Consumers continue a three-year upward trend of shopping for hotels online and booking electronically, according to TravelCLICK’s consolidated second quarter eTRAK results. The data shows the Internet contributed 37.3 percent, or 7,605,440 reservations, of the total Central Reservation Office (CRO) reservations at major hotel brands, a 19.9 percent increase compared to the same period in 2005. The data also highlights the continuing importance of Global Distribution System (GDS) e-commerce with 36.4 percent, or 7,425,301 bookings, of CRO reservations coming through those channels, a 4 percent increase over Q1 2006. This is the first quarter that Internet reservations surpassed GDS reservations, or bookings made through the travel agent-focused Global Distribution System (GDS).

The eTRAK report shows that voice represents the remaining 26.3 percent of CRO reservations, down 1.2 percent over the same time last year. Phone reservations continue to lose share as consumers migrate to the web, but still offer an alternative for the older population demographic and those with limited or no Internet access.

In the second quarter of 2006, brand websites grew again and continued to gain share compared to third-party merchant and opaque websites, which are increasingly used for hotel rate shopping prior to consumers booking direct on hotel websites. According to eTRAK, brand websites were the source of 79.3 percent of the brands’ centrally booked Internet reservations.

eTRAK is a quarterly benchmarking report that enables individual hotels to track booking trends on the Internet and GDS through Central Reservations Office (CRO) performance. The consolidated results provide industry indications based on performance trends for 23 major hotel brands and chains.

Observations for the market based on this latest data from eTRAK include: The mix of reservations through the CRO will continue its recent trend throughout the next two years. Voice reservations will continue to decline as consumers choose self-shopping options through the Web or assistance from travel agents. A more dramatic decline in the voice channel will be realized in coming years as traditional call-in business, such as group meetings and conventions, shifts online.
Supplier websites will grow to 35 percent of CRO bookings as hoteliers continue to recognize the value of presenting their identity online and investing in e-commerce websites that provide a simple yet dynamic shopping experience.
The GDS channel increased more than 250,000 transactions compared to the previous quarter. Although GDS volume increased 4.8 percent, it fell slightly as a percentage of overall CRO reservations, overshadowed by the dominating influence of Internet bookings, which grew 19.9 percent compared to the same period in 2005. The GDS will continue to grow, but at a slower rate for at least the next 24 months as this channel represents primarily steady corporate and business travel.
Although voice reservations will decline, hoteliers can expect the voice channel to increase in profitability as call times decrease and conversion rates grow due to consumers researching destinations and making buying decisions online before calling to confirm.
“As hoteliers better understand consumer shopping behavior in this distribution landscape, they are successfully moving business into the channels that bring them the highest Average Daily Rate - their own websites and the GDS,” said TravelCLICK Senior Vice President of Product Management Scott Farrell. “Intelligent electronic marketing efforts that successfully place hotels in the buyer’s consideration set during the shopping experience will allow hoteliers to capture more customer attention and increase conversion rates.”



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