It’s been more than a year since several major hotel brand companies introduced campaigns to prod consumers to join its loyalty programs in exchange for discounted room rates when they book directly through the brands’ websites.
Today, there is little evidence these expensive marketing campaigns have significantly moved the needle in the direction brand companies had hoped. In fact, while a few chains have seen substantial increases in direct bookings, most have strained to accomplish more than one-percentage-point movements in the direction of direct bookings. Certainly, the return on investment in these expensive ad programs has yet to be clearly demonstrated.
There are a number of ways to analyze the competition between online travel agencies and hotel brand companies that are promoting direct booking initiatives. But no matter how you slice it, the OTAs are still winning the distribution data.
Hitwise reported that in the past year the market shares of OTAs and hotel direct-booking channels have barely changed. Between May 2016 and May 2017, three of the 10 largest OTA sites had increases in bookings. And while six of 10 brand companies have registered increases in direct bookings during that time, the gains have mostly been minimal.
Wyndham Hotel Group had the largest jump in share of online bookings (from a miniscule 2.85% to 9.61%). Marriott International followed with a 1.07-point increase to an industry-leading 26% share of online bookings by hotel companies. The other four companies each showed less than one-percentage-point improvement.
Of course, the hotel industry continues to grow and sell more rooms each year so the pie is growing and both hotels and OTAs are booking more business—even if the share of those bookings hasn’t changed much.
From a consumer perspective, the chains haven’t yet made their case for direct booking. In fact, most people I know outside of the hotel business still firmly believe they somehow can find cheaper room rates online if they just search hard enough.
