Rooms Hotels

Stock Market-Bound La Quinta Getting More Digital, But Phone Calls Still Rule

@denschaal

Mar 28, 2014 12:00 pm

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Kudos to La Quinta for its 2012 launch of LQ Instant Hold, which enables guests using smartphones to hold a room for up to four hours by just entering a phone number with no other inputting required. It’s part of La Quinta’s digital and mobile push, both of which appear to be working.

— Dennis Schaal

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La Quinta

La Quinta gets the lion share of its revenue from bookings made directly through local properties. Pictured is the La Quinta Chicago Downtown. La Quinta


The new La Quinta — the one that is poised to execute an IPO — has been getting more digital and mobile in its guest transactions.

In 2013, revenue from website bookings on LQ.com increased 8% compared with 2012, and accounted for 20% of La Quinta’s channel revenue [see graphic below], making it the chain’s second largest distribution channel.

But, the largest channel for La Quinta by far in 2013 was “property direct” (53% of channel revenue), which includes direct calls to the local property and walk-ins.

So when you consider that the chain’s call centers accounted for 10% of channel revenue in 2013, and then you add all of those phone reservations that were made directly with the property, then it is clear that the phone is the dominant revenue generator for La Quinta.

The next largest channel was online travel agencies such as Booking.com and Expedia, which accounted for 12% of 2013 channel revenue. La Quinta and other chains fear that over-reliance on online travel agencies will be costly because of their generally high commissions and their emphasis of price over brand.

Rounding out the channel revenue for La Quinta in 2013 was global distribution systems/travel agencies (5%).

The global distribution channel draws a lot of business travelers, and La Quinta would love to see their numbers rise.

Corporate accounts, including government and military clients, accounted for 25% of La Quinta’s room revenue in 2013 at owned and franchised hotels.

“We will seek to increase room revenues from corporate accounts, as we believe such accounts are associated with more consistent demand and longer stays,” La Quinta stated in an amended registration statement filed March 27.

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Source: La Quinta

Overall, La Quinta saw electronic distribution revenue increase 17% in 2013 compared with 2012.

The chain has been making a big mobile push, as well. In addition to launching a mobile website in 2012, La Qunita debuted LQ Instant Hold, which enables guests to hold a room for up to four hours using smartphones by just entering a phone number.

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