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The competition for hotel guests is fierce, with rising customer- acquisition costs, price-sensitive travelers, and falling brand loyalty at play.
Established online travel agencies (OTAs) and metasearch sites like Expedia, Priceline and Kayak, joined by startups like Hipmunk, gained 10.4% of total hotel bookings in North America’s top 25 markets in 2012, up from 9.5% in 2011. Though hotel websites accounted for a 26.7% market share in 2012, that number rose just a half a percentage point YoY, eMarketer reported.
“Hotels are under a lot of pressure these days to own the customer,” says Kelly McGuire, Executive Director of the Hospitality and Travel Global Practice at SAS. “A lot of that is coming from the situational landscape and the power of the OTA like Expedia. Now you’ve got Google in the picture and everyone wants a piece of the puzzle.
The distribution costs are growing faster than rates are growing.
To acquire a customer via an OTA is much more expensive than through an owned channel. So if you can attract and retain a guest database then you are sending guests through a cheaper channel.”
Couple these costs with virtually non-existent brand loyalty (just 8% of 4,000 travelers surveyed by Deloitte in 2012 said they were loyal to the same hotel brand) and the playing field becomes even
To succeed, hotels need to create a guest experience that stands out. Today’s tech-savvy, mobile-first travelers are looking for more personalized service that keeps up with their on-the-go, up-to-the minute lifestyles. And, they’re looking for marketing messages that are relevant, not generic.
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