Hotel CEOs Think Their Direct Booking Pushes Position Them for Long-Term Gain

Hotel CEOs have a lot on their minds these days, from terrorism and softening corporate travel business to Brexit and Airbnb. And although they're guardedly positive about business for the rest of this year, one thing hotel CEOs have been particularly bullish about in the past few quarters are their respective direct booking campaigns, most of which involve discounted rates for their loyalty program members. That was especially evident during their first quarter earnings calls, as well as the most recent spate of calls for the second quarter. Marriott and Hilton were the first major U.S. brands to push direct bookings and member rates on a more global scale, and that was soon followed by their peers, including Hyatt Hotels & Resorts, InterContinental Hotels Group, Wyndham Worldwide, Choice Hotels, and others. But not all hotel players, notably Red Lion Hotels and AccorHotels, have followed suit. Sebastien Bazin, AccorHotels CEO, told Skift, "Are they [hotels launching direct booking campaigns] going to be successful in taking market share away from Booking and Expedia? I doubt it." "The brands are very positive on direct booking, but they admitted there may be some short-term pain for that they think is some very long-term gain," said Michael Bellisario, a senior equity analyst at Robert W. Baird. "Some of those rates are diluting their RevPAR (revenue per available room, a popular performance metric for the hotel industry) in the near term — maybe as much as 25 to 50 basis points in drag," he added. "That's not helping the already tough rate environment they're facing, and the fact that consumers are shopping around and they have so much booking technology at their fingertips. But the brands are still optimistic that it's working." Now, one or two quarters into their campaigns, those CEOs pushing direct bookings offered additional insights into how their efforts are playing out. Here's what the hotel CEOs had to say, put into context with comments they've made previously about booking direct. Hilton: 'This Is a Long-Term Strategy' In April, discussing first quarter results, Hilton CEO Christopher Nassetta said the early results from Hilton's largest-ever global marketing campaign, "Stop Clicking Around," which debuted in February, resulted in a 90 percent increase in Hilton HHonors membership enrollments and a 55 percent jump in HHonors occupancy levels. He also said direct channels (referring specifically to Hilton.co