Editor’s Note: In July, Hitwise provided Skift with online travel agency and hotel market share data as of May 2017 that Hitwise now concedes was flawed. Hitwise recently provided us with updated data that purport to show the online travel agencies actually gained more share (2.96 percent compared with a 1.16 percent gain, as previously reported), and hotel share fell more (3.87 percent versus 2.55 percent).

In addition, the revised HItwise data show the gap in online travel agency versus hotel market share tallies (58.28 percent versus 41.72 percent, respectively) was narrower than initially reported below.

Even the new Hitwise data, though, is incomplete because it does not capture all the bookings for Starwood brands, but merely tracks bookings through Starwoodhotels.com, for example. Finally, as previously noted, the Hitwise data does not record in-app bookings or corporate bookings completed through private servers.

The original post follows:

With all the hoopla over hotel-direct bookings and online travel agency retaliation and maneuvering, the balance of power in U.S. market share among top players has been surprisingly even-keeled over the last year with overall share shifts amounting to less than one percentage point up or down for each sector.

From May 2016 to May 2017, according to new bookings data from Hitwise, hotels’ market share of all online bookings in the U.S. fell from 31.36 percent to 30.56 percent, or less than a percentage point, while online travel agencies picked up a corresponding amount, seeing their market share of hotel bookings rise to 69.44 percent, up a bit from 68.64 percent a year earlier.

“To be honest the shift in share of bookings for hotels versus OTAs is quite small, less than one percentage point change for either camp,” said Rochelle Bailis, Hitwise’s global director of content. “Hotels have lost about .8 percentage points of overall hotel bookings year over year.”

To get its numbers, Hitwise uses a panel of 8 million U.S. consumers and tallies their online hotel bookings by enabling rules to track their visits to specific booking-confirmation pages.

If Hitwise’s numbers are to be believed, it doesn’t mean that Marriott, Choice Hotels or Hilton, which have been the heaviest hotel advertisers on U.S. TV in the 12 months through May 2017, according to iSpot.tv, aren’t attracting more direct bookings and stealing some from Expedia, as they have reported.

Reacting to the Hitwise numbers, Bjorn Hanson, clinical professor with the NYU Preston Robert Tisch Center for Hospitality and Tourism, pointed out that the number of occupied rooms in 2017 are greater to date than in 2016. That means the online travel agencies can be gaining share and big hotel chains such as Marriott and Hilton can be attracting more direct bookings, too, he said.

“The online travel agencies gained a little bit more this year and last year brand.com sites gained a little more,” Hanson said.

Some of the share shift could be coming at the expense of offline channels.

Hitwise found that Booking.com, in particular, and Expedia, too, posted substantial market share gains, and Wyndham was on a tear among hotel chains.

Not all of the market share gains and losses — depicted in Hitwise charts below — can be attributed to the success or failure of major chains’ direct-booking campaigns. There are a lot of other factors in play.

Asked to comment on the HItwise findings, Morningstar senior equity analyst Dan Wasiolek said the numbers support Morningstar’s view “that hotel direct booking campaigns would not take meaningful share from the two main OTAs for several reasons.”

Offering steep discounts to loyalty program members “mitigates the positive economics that booking on the hotelier website is supposed to generate,” and “Priceline and Expedia have strong network advantages that are too important for the hotels not to be on,” Wasiolek said.

It should be pointed out that an executive from one of the big chains said Hitwise’s numbers may skew toward leisure travel as it is less likely to pick up business travelers booking chain hotels from behind corporate firewalls. However, the official didn’t challenge the basic trajectory of the findings. {See more about Hitwise’s numbers in a note at the end of this story.]

The results do not contradict earnings and investor calls so far this year. “Recent commentary from hotelier conference calls point to these operators seeing improved growth of direct bookings, but Priceline and Expedia are also having continued healthy growth,” Wasiolek said.

But there have been individual winners and losers.

When looking at hotel versus hotel competition, Wyndham has notched the biggest market share gains. Wyndham tripled its market share [see Chart 1 below] among top hotels to 9.6 percent,  Hitwise found.

“Marriott brands have the highest volume of direct site bookings but Wyndham has shown the largest year over year increase with an over 3x jump in bookings since May 2016,” Hitwise said. {By “Marriott,” Hitwise means all bookings from Marriott domains and subdomains but not from people who booked through Starwoodhotels.com, for example.]

A few months ago, Wyndham revamped its loyalty program, and claims to be offering members up to 20 percent discounts when booking direct. The chain says it has earmarked $100 million to market its loyalty program over the next year-and- a half.

Wyndham has a strong summer travel message that emphasizes pricing, Hanson said. “I’m not surprised,” he added, referring to Wyndham’s gains. “It resonates with leisure travelers.”

Wyndham’s U.S. market share and volumes are much smaller than competitors such as Marriott-Starwood, Hilton, and Choice, which all made more modest market share gains when considering hotel competitors. On the other hand, the InterContinental Hotels Group, Best Western, Sheraton and St. Regis hotel websites all took a step back in U.S. market share, Hitwise found.

“We attribute these strides to our intense focus on technology,” said Barry Goldstein, Wyndham Hotel Group’s chief marketing officer.
“We improved our websites this year building a new, responsive platform and focusing on the guest experience through personal and dynamic photography as well as a simple, clean customer experience.

“At the same time we’ve improved the Wyndham Rewards app’s usability, which has increased our conversion rates dramatically. We think focusing on things travelers seek — easy-to-use tools coupled with the most rewarding loyalty program with Wyndham Rewards — will help us continue winning in an ever-more competitive space.”

Chart 1: Hotel Websites’ Share of U.S. Hotel Website Bookings

Hotel websites Share of Bookings Share of Bookings Change (% Points)
May 2016 May 2017
Wyndham Hotels 2.85% 9.61% 6.76
Marriott International 25.13% 26.21% 1.07
Hilton Hotels 16.43% 17.25% 0.82
Choice Hotels 14.02% 14.34% 0.32
Starwood* 4.87% 5.19% 0.31
Hyatt Hotels 3.44% 3.44% 0.0024
St. Regis Hotels 0.08% 0.06% -0.017
Best Western 5.94% 5.74% -0.2
Sheraton Hotels 1.36% 0.88% -0.51
IHG 16.19% 15.58% -0.61

Note: Starwood, which is now part of Marriott International, isn’t a hotel brand, but Hitwise tracked bookings that flowed through Starwoodhotels.com. For Marriott, Hitwise tracked people who hit the booking confirmation page from Marriott’s domain or subdomains.

Booking.com was the big winner within the online travel agency versus online travel agency sweepstakes in the U.S.

Booking.com notched the largest market share gains within the online travel agency category in May 2017 versus a year earlier, seeing its share rise 3.35 percentage points to a 19.13 percent share of online hotel bookings among online travel agencies in the U.S. [More on that later.]

A Booking.com spokeswoman wouldn’t confirm or comment on Hitwise’s numbers, but said “the U.S. remains an important market for Booking.com and it will be a market where we continue to invest.”

Online Travel Agencies, Hotels Vie For Biggest Piece of the Pie

What was perhaps most interesting was additional data that Hitwise pulled for Skift showing the market share gains and losses of online travel agencies and hotels when considering the entire online hotel booking ecosystem in the U.S. among major players and not just the individual sectors alone.

“Interestingly, I did notice a strong concentration in growth amongst the top five players while most OTAs and hotels stagnated or lost bookings since last year,” Bailis said [see Chart 2 below]. “Although it’s small, Wyndham was the only hotel that managed to maintain growth in direct bookings against major OTA players — extremely rapid growth, in fact, with the largest percentage increase in bookings by a long shot.”

Booking.com made big market share gains in relation to hotels and other online travel agencies, and the largest hotel-booker in the U.S., Expedia, also picked up share.

While Wyndham saw its market share rise among hotels and online travel agencies, Sheraton, Hyatt, Hilton, Best Western, Marriott, Hilton and InterContinental Hotels Group were among the decliners, Hitwise found.

Chart 2: U.S. Online Hotel Booking Gains/Losses Among Top Players

 WEBSITES Hotel Booking Hotel Booking % CHANGE Change (% Points)
Market Share May 2016 Market Share May 2017
Booking.com 10.84% 13.29% 22.64% 2.45
Wyndham Hotels 0.99% 2.99% 201.98% 1.99
Expedia 18.90% 19.52% 3.28% 0.61
Priceline.com 10.79% 11.22% 3.96% 0.42
Hotels.com 10.14% 10.23% 0.96% 0.09
St. Regis Hotels 0.03% 0.02% -29.74% -0.008
Starwood* 1.69% 1.61% -4.68% -0.079
Hyatt Hotels 1.19% 1.07% -10.38% -0.124
Sheraton 0.47% 0.27% -43.79% -0.207
Best Western 2.06% 1.78% -13.51% -0.278
Hilton 5.70% 5.36% -5.96% -0.339
Choice Hotels 4.87% 4.46% -8.43% -0.41
Cheap Tickets 1.92% 1.44% -24.85% -0.476
Travelocity 6.01% 5.48% -8.86% -0.532
Marriott International 8.73% 8.15% -6.62% -0.577
Orbitz 5.42% 4.81% -11.29% -0.612
IHG 5.62% 4.84% -13.84% -0.778
Hotwire 4.61% 3.44% -25.44% -1.173

Note: Starwood, which is now part of Marriott International, isn’t a hotel brand, but Hitwise tracked bookings that flowed through Starwoodhotels.com. For Marriott, Hitwise tracked people who hit the booking confirmation page from Marriott’s domain or subdomains.

From a low base, Wyndham saw its market share rise more than 200 percent to just under 3 percent share. Bailis of Hitwise said a company’s gains might be attributed to a variety of factors, and, in the case of hotels. they shouldn’t be attributed to direct-booking initiatives alone, for example.

“It could be search and advertising performance, or competitive conquesting etc., Bailis said.

Wyndham’s gains didn’t occur in a vacuum. From the March 2016 to March 2017 period that Hitwise tracked, Wyndham was the ninth largest hotel advertiser on U.S. TV, spending an estimated $19.2 million, iSpot.tv found.

The Hyatt numbers, which show its small U.S. market share in the overall online-hotel booking space falling, doesn’t bode well for its contract negotiations with Expedia and threat to remove its inventory from the online travel agency.

“Hitwise’s data shows a lack of traction in direct bookings for Hyatt, which we believe supports our view that the operator is unlikely to follow through on its recent threat to exclude its content from Expedia’s platform,” Wasiolek contended.

In addition to Wyndham, the Booking.com, Expedia.com, Priceline.com and Hotels.com brands, all picked up online-hotel booking market share, according to Hitwise, when considering both top online travel agency and hotel players in the U.S.

On the other hand, when tallying the entire online-hotel booking space in the U.S., Cheap Tickets, Travelocity, Orbitz and Hotwire — all owned by Expedia Inc. — were in market share retreat mode.

When coupled with the fact that the Expedia.com brand saw its leading market share of U.S. online hotel bookings climb 3.28 percent to 19.52 percent, it’s clear that the flagship brand is the priority in the Expedia Inc. portfolio. With its leading market share in the U.S., nearly one in five online hotel bookings in the U.S. take place on Expedia.com or in its apps.

Online Travel Agency Versus Online Travel Agency

In online travel agency versus online travel agency competition, Booking.com has made the largest booking market share gains from May 2016 to May 2017 by far, according to HItwise, and it came at the expense of Expedia Inc. brands.

Chart 3: Online Travel Agency Market Share Winners/Losers in Online Hotel Bookings

Online Travel Agency Share of Bookings Share of Bookings Change (% Points)
 Websites May 2016 May 2017
Booking.com 15.78% 19.13% 3.35
Expedia 27.52% 28.09% 0.57
Priceline.com 15.71% 16.15% 0.43
Hotels.com 14.76% 14.72% -0.033
Cheap Tickets 2.79% 2.07% -0.72
Travelocity 8.75% 7.88% -0.87
Orbitz 7.89% 6.92% -0.97
Hotwire 6.72% 4.95% -1.77

“Of the top OTAs in the industry, only three of them have shown an increase in bookings compared to the same time last year — Booking.com, Expedia and Priceline,” Hitwise said. “Meanwhile, five of them have actually lost conversion year-on year.”

While Expedia.com had the largest volumes in the U.S. and increased its market share to 28.09 percent among other online travel agencies, Booking.com saw its market share jump the most, 3.35 percentage points during the period to 19.13 percent. Priceline.com, a sister company to Booking.com, saw its market share increase a tad, 0.43 percentage points to 16.15 percent, rounding out the only three online travel agencies that could claim market share gains among their peers.

Five other Expedia Inc. brands, namely Hotels.com, Cheap Tickets, Travelocity, Orbitz and Hotwire, were in the red in terms of market share declines in the U.S. from May 2016 to May 2017, according to Hitwise.

TV advertising isn’t the end-all, be all when looking at an online travel agency’s overall marketing efforts but it can be a leading indicator. In descending order, Expedia.com, Booking.com, Hotels.com, Travelocity.com and Priceline.com were the top U.S. national TV advertisers among online travel in the May 2016 to May 2017 period, according to iSpot.tv.

From the Hitwise numbers, It appears as though Priceline.com’s website relaunch may be bearing fruit while Expedia’s Hotwire, which has struggled for several years despite signifiant TV advertising, could be falling off a cliff.

Top 15 Hotel Brands

Hitwise tallied the top 15 hotel brands that U.S. consumers stayed in over the last year, and Hilton (10.62 percent) and Marriott (10.51 percent) led the pack in a virtual photo-finish.

Chart 4: Top 15 Hotel Brands In the U.S. In Past Year

Hotel Market Share Last 12 Months
Hilton 10.62%
Marriott 10.51%
Best Western 9.90%
Holiday Inn 9.28%
Hampton Inn 9.04%
Courtyard by Marriott 7.94%
Comfort Inn 7.10%
La Quinta 6.36%
Hilton Garden Inn 5.74%
Doubletree 5.57%
Comfort Suites 5.23%
Hyatt 4.67%
Days Inn 4.45%
Embassy Suites 4.17%
Sheraton 3.72%

Note: The total share does not add up to 100 percent because some guests stayed in more than one hotel brand

Wasiolek of Morningstar sees both Hilton and Marriott with competitive advantages over the rest of the pack.

“We see both of these operators as being able to strengthen current brand-intangible moats and gain future room share due to strong loyalty programs and brands that resonate with travelers,” he said.

Consider Marriott and its Courtyard brands, for example.

“Hitwise data shows that the Marriott and Courtyard brands (the two largest brands for Marriott International) garnered 18.5 percent of all traveler visits combined, which perhaps supports the brand-intangible advantage we see these firms [Marriott and Hilton] having,” Wasiolek said.

Hotels’ Reliance on the Online Travel Agency Channel

Some hoteliers have correctly chafed at the notion that there is a “war” between hotels and online travel agencies. Although there can be deep bitterness, it is clear that despite direct-booking campaigns geared to tip the balance to each side’s advantage, the two parties need one another.

Hitwise took a look at hotels’ reliance on the online travel agency channel, or the percentage of consumer traffic leaving online travel agency websites and heading to hotel sites. Hitwise found that there significant disparities brand to brand.

“Although Country Inn is relatively small (and only receives 0.05 percent of the overall downstream traffic from the OTAs), this brand is the most channel-reliant on the OTAs  — over 10 percent of its Web traffic comes from these booking sites,” Hitwise said.

Chart 5: Hotels’ Downstream Traffic From Online Travel Agencies

Hotel Websites Clicks Clicks’ Reliance
Country Inn & Suites 0.05% 10.21%
Choice Hotels 0.43% 9.27%
Motel 6 0.06% 9.15%
La Quinta 0.07% 7.50%
Wyndham Hotels 0.22% 6.56%
Best Western 0.12% 6.19%
IHG 0.31% 5.88%
Radisson Hotels 0.01% 5.74%
Extended Stay America 0.30% 5.69%
Red Roof Inn 0.18% 5.58%

Hitwise found that Choice and Wyndham have been converting more customers on their own websites than they did in 2016. “They also receive a notable amount of traffic from booking sites. This could suggest these hotels are successfully conquesting and converting downstream site visitors before they return back to the OTA.”

What Does It All Mean?

Regarding additional takeaways from Hitwise’s numbers, the online travel agencies are correct when arguing that they haven’t seen a huge impact — yet — from hotels’ direct-booking campaigns.

“This year we see OTAs continuing to pull the bulk of hotel bookings — about two-thirds — while hotel websites pull about a third of online conversions,” said Bailis of Hitwise. “Although this ratio hasn’t haven’t shifted much since 2016, we do see a greater concentration of bookings growth amongst the top OTA players: Booking.com, Expedia, Priceline and Hotels.com.”

The online travel agencies have been saturating the airwaves with their TV advertising and, as a rule, are more adept at and can scale digital marketing in ways that most hotels aren’t equipped to do.

The big online travel agencies also have the comprehensiveness advantage when it comes to competing with hotels.

“Priceline’s Booking.com has around 25 million rooms on its platform with 330 million monthly visitors while the largest brand hotelier, Marriott, has 1.2 million rooms and roughly 30 million monthly visitors to its website, according to Similarweb,” Waiolek said.

Still, Marriott and Hilton seem well-positioned, and Wyndham appears to be making some gains in the U.S.

Hanson of the NYU Preston Robert Tisch Center for Hospitality and Tourism said the barrage of online travel agency TV advertising, much of it focused on price, creates “top-of mind and unaided recall” among consumers that there are alternatives to booking on hotels’ websites.

“It is very difficult to compete against that volume of online travel agency advertising,” Hanson said.

Wyndham indeed seems to be striking a chord with consumers.

“In spite of being smaller than the likes of Marriott and Hilton, Wyndham has shown the greatest relative growth in direct online bookings this year,” Bailis said. “This may be partially attributable to the success of their Wyndham Rewards program, as well as their consistency in offering discounts to those who book onsite.”

Note 1: Hitwise was the source for all five charts.

Note 2: After publishing this story, two big hotel chains approached Skift to say they believe Hitwise’s numbers skew toward leisure travel and miss a significant portion of their bookings because they occur behind corporate firewalls, are group bookings, or are done by travel management companies (although these wouldn’t be direct bookings), or take place on mobile apps.

In response, Hitwise said, “We do track visits to both secure (https) and non-secure (http) website pages. Firewalls/virtual private networks don’t affect our data. We are simply tracking visits to specific pages, indiscriminate of whether they are protected or where they are accessed. So this should answer the “bookings behind corporate firewalls” question.

“We do track m. mobile website bookings. As of right now (although this will soon change!) we do not track mobile app bookings. I understand that higher-end and larger hotels may have relatively more rewards members, who are more likely to book through their hotel apps. But we didn’t have mobile app data for any of the other major hotels or OTAs in this analysis.

“It’s also true we cannot see private group business bookings completed through corporate APIs. This analysis was meant to be more consumer-facing, comparing who is attracting travelers researching and booking hotels online, in a situation where both OTAs and other hotels are at play. Large business bookings done through a private APIs are an entirely different ballgame.”

Photo Credit: The battle for hotel bookings between hotels and online travel agencies is as intense as it ever has been. The last year has basically been a standoff.