clear vision through glasses reflecting future trends of online hotel bookings

After more than one year of global pandemic, we are yet to grasp all the different ways in which the virus has changed our lives.

NB: This is an article from PrivateDeal

Indeed, the impact of an event of such magnitude can only be measured in hindsight, with enough time and perspective to understand all the cascading consequences.

Zooming on the hospitality industry, we know that many of the strings that held the market together snapped under the impact of the virus.

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The upheaval of several long-agreed-upon principles acted as a sort of renewal for some of the unhealthier aspects of the industry; among them the online booking monopoly. For various reasons which will be detailed later in this article, the COVID-19 outbreak loosened the grip Online Travel Agencies held over the online hospitality market. This paradigm shift provided hotels with a unique opportunity to reclaim control over their digital distribution. However, even though direct bookings are on the rise, OTAs are likely to want to earn back their lost market shares as soon as the travel resumes. Going forward, it will take hotels time, resources, and dedication if they want to keep challenging OTAs at the top of the online booking game.

In this article, we will see, through concrete analysis and numbers, how the online booking world changed under the influence of the COVID-19 pandemic. Then, we will explore possible reasons behind this mutation and reflect on the new roles for each stakeholder. Finally, we will look ahead and speculate on what direction the hospitality industry might be taking in the long term and what hoteliers should do to thrive in this new environment.

Shifting tides

A recent study by D-Edge Hospitality Solutions highlighted how the pandemic accelerated a mild decline trend that is symptomatic of an exacerbated outcry for change. Whilst OTAs had remained relatively unchallenged during the past few years, the COVID-19 outbreak put their global hegemony in jeopardy. In Asia, powerhouses such as Expedia and Agoda lost as much as 40% market shares, while only managed to remain stable despite the crisis. Europe paints a similar picture, with huge losses to show for pretty much every major OTA apart from

OTAs market shares drop has been accelerated by the pandemic (source: D-Edge)

As a result, direct bookings are clawing their way back up hotels distribution mix. This trend seems to be global, although it is more pronounced in Asia, a region with a track record of driving more direct revenue. In Asia, web direct in 2020 accounted for a whopping 36% of all online acquisition (up 7 points from 2019) while in Europe it managed to grow 33%, from 21% all the way to reach 28% total direct bookings. Even though direct bookings are not quite reaching OTA figures yet, the current exponential growth is more than encouraging.

image showing direct bookings are at an all time high

While OTAs’ market shares drop, direct bookings are at an all-time high (source: D-Edge)

Skift research also stated that direct bookings held especially strong during the COVID-19 outbreak. So much so that, as a result, the whole hotel distribution landscape has been reshaped.

Moreover, in addition to the direct bookings surge, new players such as Google are threatening to make a grand entrance on the online market. As lines between distribution channels are getting more and more blurred, the relative balance that was reached in recent years has been upended. Today, it is difficult to predict where the new equilibrium will lie; only one thing remains certain: the next few months will define the distribution landscape for years to come.

If hotels want to keep the momentum going, they first need to understand the reasons behind this sudden shift. Indeed, analyzing what caused OTA market shares to plummet is the first step in the process of building a long-term direct revenue flow.

Read rest of the article at PrivateDeal