Growth of OTA, mobile bookings surges

According to the TravelClick North American Distribution Review, the number of hotel bookings through online travel agents such as Expedia.com and official hotel websites is increasing.

For the third quarter of 2013, the NADR monitored over 3,700 hotels across 25 major North American markets, consisting of roughly 800,000 rooms, according to TravelClick EVP Tim Hart.

The review found that the OTA channel experienced a 13.6 percent increase in hotel bookings compared to last year, while hotel websites saw a 5.3 percent jump.

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In terms of average daily rates, the OTA channel once again grew more than any other channel in the transient segment (8 percent jump).

"It's not breaking news," Hart said. "It's the extension of a storyline that has been developing for some time. The combined share of online channels has continued to grow at the expense of offline channels."

Hart attributed the growth in online channels to a variety of factors. OTAs are generally offering better discounts and package rates than other channels, which has understandably led to an uptick in hotel bookings from travelers. OTAs are able to do this because the channel they operate through is the least expensive channel per booking.

"It's the combination of consumers' behavior and hotel companies spending money on OTAs," Hart said.

Also, leisure travelers who aren't familiar with a certain area or haven't developed a strong rapport with a particular hotel yet tend to book online, if only for the convenience.

The cities that made up the greatest percentage of OTA bookings in the third quarter were (in order): Orlando (18.8 percent), New York City, San Diego and Miami, while Toronto and San Antonio tied for fifth at 16.6 percent.

Washington D.C. led all cities in bookings through hotel websites (31.6 percent share).

Hart noted that approximately 60 percent of hotel bookings are still made through offline channels.

Online travel agent daily bookings in the fourth quarter of 2013 is currently on track for a 7.1 percent increase from last year.

A recent study by PhoCusWright  shows that  mobile booking continues to surge at exponential rates.

In 2015, Americans will book $39.5 billion worth of reservations on their mobile devices, accounting for 12 percent of all travel sales, PhoCusWright reported in its annual Online Travel Overview. 

Those numbers represent more than a fivefold jump from the $6.15 billion in sales and 2% market share that mobile represented in 2012, and they illustrate the growing ubiquity of the smartphone- and tablet-toting traveler.

"The channel is getting a lot of attention from both OTAs [online travel agencies]and suppliers," PhoCusWright wrote in its 90-page report. "Every serious player in the online travel space is prioritizing mobile technology development and pushing hard for travelers' attention in the form of traffic, transactions and app downloads." 

Within the travel industry, the hotel sector is leading the way with regard to mobile booking, and that trend is shortening the booking window considerably. 

At the annual PhoCusWright Conference in Florida last month, RBC Capital Markets' managing director, Mark Mahaney, said that as more travelers book with smartphones, the idea of booking either a same-day or day-prior reservation is becoming more of a rule than an exception.

And while surging airfares and the ever-shrinking seat capacity will make many travelers gun-shy about rolling the dice with a last-minute airline booking, a number of hoteliers have demonstrated a propensity to offer last-minute discounts in order to unload unused inventory for the night.

As a result, about 12 percent of the online bookings directly with hoteliers will be via a mobile device this year, compared with about 8 percent of car rental bookings and about 6 percent of airline ticket reservations, PhoCusWright said. And by 2015, about a third of the bookings U.S. hoteliers process online will be made using mobile devices.

The mobile booking numbers for hotels don"t include smartphone owners who use "click-to-call" features that provide direct phone access to a hotelier's call center. So for every hotel booking via smartphone, there were three or four cases where the user clicked through to a call center or booked via another distribution channel, according to PhoCusWright.

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