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Earlier this month we launched our annual package, Megatrends Defining Travel in 2016, where we identify the global trends in travel in 2016 and beyond.
Below we look at the attempt by hotels, airlines, and others to cut out the middle man and drive consumers to book directly from them by using a mix of inducements that include upgrades, preferred selections, and loyalty bonuses. It’s a direction that should give online and offline booking giants some pause.
The Direct Booking War Is On
Hotels and online travel agencies have long been locked in a perennial battle for travelers’ bookings. In 2016, that shows no sign of abating. While hotels got more aggressive in 2015, they will likely make an even more concerted effort this year.
After television ad campaigns by Hilton Worldwide and Marriott International in 2015, and a lobbying campaign by the trade group the American Hotel & Lodging Association all designed to spur travelers to book directly on hotel websites, some hotels are even saying privately that they plan to reduce their room allotments to online travel agencies in 2016.
When the online travel agencies are sold out then booking on hotel websites becomes an even more practical endeavor.
Hotel chain website and mobile share globally seemed to be “trending up” in 2015, says Henry Harteveldt, founder and travel industry analyst for Atmosphere Research Group, while online travel agency share grew more modestly, one percentage point to 20 percent.
The share breakdown, according to Atmosphere’s numbers was:
- Hotel brand websites and mobile, 25%
- Local properties’ websites, 8%
- Online travel agencies, 20%
The rest was divided among channels including hotel phone reservations, walk-ups and traditional travel agencies.
In 2016, Marriott and Starwood, which announced that they will merge, as well as Hilton Worldwide, and InterContinental Hotels Group, are all expand-ing options for loyalty program members to bypass front desks and use smartphones for keyless room entry, and this feature won’t be available for trav-elers who book their stays on Expedia, Booking. com and TripAdvisor, for example.
What’s needed here? More imagination from hotels. Hotels will continue to add exclusive perks, such as points and basic Wi-Fi for free for those travelers who book direct. The most creative properties and chains will also offer direct-booking perks such as early check-ins or late checkout, too.
Such frills illustrate that while there’s no obvious victor yet among OTAs and hotels, the consumer is a clear winner.