Today we are launching the latest report for our Skift Research subscribers, our blockbuster 2017 Outlook on Hotel Direct Booking. This is our most comprehensive and actionable report outlining the real state of distribution in hospitality. We conducted over 30 interviews with executives from most of the leading branded and independent hotel chains, intermediaries, metasearch platforms, and technology providers to, once and for all, demystify the “direct booking” debate.

Is there really a “war” going on between the big chains and the OTAs? If so, what are the impacts? How are independent and chained hotels using paid and unpaid direct channels to reduce their distribution and marketing costs? Who owns the customer? These are just some of the big questions that we have addressed through interviews and data collection.

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We also fielded our 2017 State of Direct Bookings Survey to complement this landmark report and to understand how operators are balancing and optimizing the myriad of distribution and marketing channels now available to them. Close to 400 chained and independent hotels around the world weighed in on the survey, thanks in part to the team at metasearch marketplace trivago and their help in distributing the survey.

At over 55,000 words, this report is a must-have resource for the C-level, as well as for channel and revenue managment teams looking to learn from industry best practices.

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“Experienced operators recognize the value of OTAs as an acquisition channel, particularly for new guest acquisition. The overall consensus when it comes to strategy is that OTAs get new customers through the door and it’s up to the hotel to build the relationship with the guest once on-property. Here, loyalty programs are standard protocol for capturing guest data. For the bigger chains, loyalty program members can account for more than 50 percent of bookings. Adequately rewarding direct booking behavior is clearly part of it. For smaller chains and individual properties, loyalty programs make less sense. Strong branding and differentiation with unique guest experiences targeted toward a niche customer base is one strategy.”

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Here is what you will learn from this report:

  • What should count as a direct booking
  • The difference between paid and unpaid digital direct
  • How hotels can and cannot compete effectively on metasearch
  • How hotels are engaging OTA customers to build their loyalty base
  • How CPC on metasearch can be riskier than CPA, but more cost-effective when done well
  • How traditional travel agents can compete on domain expertise rather than inventory
  • How much traditional travel agents charge per booking and how that number is under pressure from the large hotel groups
  • Corporate travel trends and economics to the hotel
  • Estimates for the share of bookings across non-digital direct (phone, email, walk-ins, group), unpaid digital direct, paid digital direct, OTAs, GDS, traditional travel agents, and managed corporate travel for both large brands and independent hotels
  • Effective commission rates for the OTA, metasearch, metasearch Instant Booking model, GDS, traditional travel agent, and corporate travel manager
  • Why OTAs have dominated metasearch bookings
  • How the fee structure works for GDS bookings
  • Implicit costs of digital and non-digital direct bookings
  • The economic value of moving a booking from an OTA to direct including the impact of advertising and opportunity costs
  • What issues impact the optimal distribution mix
  • What Hilton, Marriott, IHG, Best Western, Wyndham, Choice Hotels, AccorHotels, and Hyatt are doing to drive direct bookings and what their booking distribution mix likely looks like
  • How hotels can improve their chances of “winning” the OTA-booked guest to book direct the next time
  • What leading independent hotels are doing to win booking share
  • What share of Expedia’s and Priceline’s OTA bookings likely comes from the mega-chains and the potential financial impact from channel shifts

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Executives Interviewed

  • Chris Silcock, Executive Vice President & Chief Commercial Officer, Hilton
  • Drew Pinto, Senior Vice President Distribution, Marriott
  • Barry Goldstein, Chief Marketing Officer, Wyndham
  • Andrew Rubinacci, Senior Vice President Distribution & Revenue Management Strategy, IHG
  • Jeannie Lin, Vice President, Marketing and Distribution, Choice Hotels
  • Dorothy Dowling, Senior Vice President and Chief Marketing Officer, Best Western
  • Lennert de Jong, Chief Commercial Officer, citizenM
  • Bill Linehan, Executive Vice President and Chief Marketing Officer, Red Lion Hotels
  • Otón Gomez Fernandez, Senior Vice President – Marketing Services, NH Hotel Group
  • Sebastien Bazin, CEO, AccorHotels (excerpted from a previous Skift interview)
  • Bill Walshe, CEO, Viceroy Hotel Group (excerpted from a previous Skift interview)
  • Jimmy Suh, Chief Revenue Officer, Standard Hotels (excerpted from a previous Skift interview)
  • Melissa Maher, Senior Vice President, Global Partner Group, Expedia
  • Johannes Thomas, Managing Director & Chief Revenue Officer, trivago
  • Brian Schmidt, Vice President of Global Sales, TripAdvisor
  • Keith Melnick, President, Kayak
  • Christine Warner, Travel Head of Industry, Facebook
  • Oliver Heckmann, Vice President of Engineering, Travel, Google
  • Erik Blachford, Former Expedia CEO, Current Venture Partner at TCV Partners
  • Jean-Louis Boss, Co-Founder, Chief Marketing & Digital Services Officer, FastBooking (owned by AccorHotels)
  • Kurt Weinsheimer, SVP Property Solutions, Sojern
  • Mike Ford, Co-Founder and Managing Director, SiteMinder
  • Martin Soler, Managing Partner, Martin Soler Consulting
  • Tony Loeb, Co-Founder, Experience Hotel

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