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Internet Travel Monitor - Marketing, Research & Tech

March 15, 2017

This One Chart Explains the Hotel Loyalty-vs.-OTA Problem

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It's been the defining debate in online travel over the past two years: hotels' battle for the customer and direct booking amid tough competition and skyrocketing growth of online travel agencies (OTAs). This one chart below explains the challenge confronting hotels. Four in five bookings on hotel-branded sites are by members of the brands' loyalty program, and half of those bookings are by elite members.* This stands in stark contrast to airlines, who see a much higher mix of non-members booking directly.

Share of Bookings on Supplier Websites by Traveler Loyalty Status
This is the double-edged sword hotel chains face. Some of the big hotel brands have achieved driving travelers into their loyalty programs and encouraging program members to book direct. And this is no doubt a huge success. But they clearly struggle to bring new travelers into the fold. In the battle for those price-sensitive, brand-agnostic leisure travelers, they face formidable competition in the marketing muscle of the OTAs.

Copyright 2017 Phocuswright Inc. All rights reserved. From http://www.phocuswright.com.
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