By: Mark Lomanno
Published Articles
By: Mark Mazzocco
Common wisdom in the hotel world has been that hotels utilize lower cost channels to fill hotels first, and then fill occupancy gaps as necessary with higher cost channels. However, recent data shows that in U.S. markets with a significant OTA contribution, guests are looking and booking on OTAs at the same timeframe as they are considering brand.com.
In markets with a high OTA mix like New York, Los Angeles, Orlando and Miami, OTA booking lead times have matched or are longer than brand.com. This strongly suggests that to convert more guests into OTA bookers, OTAs have shifted from being a last stop-booking channel into a primary channel for some consumers.
As can be seen in the charts below, for those markets that have moved past the 20% OTA market mix threshold, OTA business appears to be utilized less as a channel to fill last minute unsold rooms, and more as a direct competitor to brand.com filling hotels at the same time as direct channels.
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Booking lead-time in each of those markets is roughly equivalent to or longer for OTAs than for direct channels. As the hotel industry continues to experience growth in occupancy, monitoring this trend will be critical for properties and brands as they try to maximize their revenue through channel optimization.
Each hotel and each market will want to consider the way they can make the direct customer booking experience as compelling as possible as they plan their distribution strategy.
- The OTA contribution to total transient business in 2016 ranged from 15.3% to 24.7% of total transient business in the top 10 U.S. markets
- Typically, markets with OTA contribution rates of 20% or greater experienced similar booking lead times between OTA and brand.com.
- Typically markets with OTA contribution rates of less than 20% experienced 3- to 4-day shorter booking lead times for OTAs compared to brand.com
Read the full article on HOTELS MAGAZINE
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Learn more about the data in this article
