Has the hotel sector reached “peak OTA”? There was speculation at this year’s Hotel Distribution Event, hosted by Hotel Analyst in London, that this may be the case.
In the strong UK market, the OTA share of bookings has not increased according to data from Travelclick, reassuring many, as fears over the impact of Airbnb were also played down.
Hotel Analyst editorial director Andrew Sangster opened the conference quoting Phocuswright figures that the OTA share of the online travel market was expected to rise from 39% in 2016 to 41% by 2020.
Steffen Doyle, managing director, co-head of European real estate investment banking, Credit Suisse, told attendees that online penetration in general was expected to continue, to reach 40% in 2020, but that it was not expected to climb “infinitely” given that much of the market using it was leisure oriented and that the corporate market continued to use a wealth of other methods to acquire its rooms.
Sangster also pointed to a lot of travel still being “transacted offline and a lot of B2B, which [potential entrants such as] Amazon cannot disrupt”.
Doyle described a buoyant market, which put hotels in a strong position when selling rooms. Doyle said: “Demand is far outstripping supply – in Europe supply is at 0.9%, very low, with demand at 4%, driving revpar growth.” He added that, echoing the US, the brands were “going to increasingly penetrate Europe and that will change the OTA penetration in the region”.
Faith in the ability of the brands to drive revenue was shared by Jerome Wise, VP, enterprise clients, TravelClick, who said that the direct and OTA channel mix in the UK were the same this year as last – with brand.com bookings up by 0.2 percentage points. A small, but, he said, not insignificant increase.
Counting “reasons to be cheerful”, Wise said: “In a strong market hotels should be taking control of their rates and channels, hopefully hoteliers are leaving enough inventory to be able to provide rooms right up to the last minute without having to drop rates.”
