Travel providers continue to feel the effects of the Covid-19 pandemic, but many would agree that as widespread vaccine inoculations roll out, rapid testing sophisticates, and health passports are developed, there is a light at the end of the tunnel.
As hospitality leaders prepare for the beginnings of travel’s recovery, paying close attention to new behaviors and demands of travelers will be key. According to new research from Expedia Group done in partnership with global research firm BVA BDRC, travelers that book trips with online travel agency sites (OTAs) will be valuable to the industry’s rebound. Expedia Group’s economic impact study, which looks at OTA traveler behavior and spending patterns across the U.S., the UK, France, and Mexico through the lens of Covid-19, found that the contribution of OTA travelers — especially in the domestic category, where initial rebound will be strongest — should not be overlooked.
“Historically, OTAs have contributed a significant amount of value to the tourism industry and the overall economy — from the spend generated by OTA travelers, to the number of jobs generated — and we expect this to continue as the industry recovers from the impacts of the pandemic,” said Melissa Maher, senior vice president, Marketing and Industry Engagement, Expedia Group. “Because OTA customers tend to travel for leisure, and place value on overall trip experience, their spending patterns make them valuable guests as properties reopen their doors.”
Here, we look at five takeaways from the research that hoteliers should keep in mind about OTA travelers as properties reopen their doors.
1. OTA travelers spend on par, and sometimes more, on their accommodation and on amenity services than direct bookers.
There’s a common misperception throughout the hotel industry that direct bookers are more profitable for a hotel than OTA travelers. But Expedia Group found that, just prior to the pandemic, these travelers often spent more on property than direct hotel bookers.
“Just prior to the onset of the pandemic, OTA travelers spent more on-property — on things like hotel restaurants and spa services, for example — ultimately generating more revenue for the hotel. We attribute this to the typically longer length of stay for OTA bookers,” Maher said.
For example, in the U.S., domestic OTA travelers spend 16 percent more per trip and 5 percent more on property than those who book direct, and nearly the same amount on accommodations. They also stay an average of nearly 5 nights on a property, compared to just over 4 nights by direct bookers. They’re also more likely to book higher-end hotels, such as upper full service or luxury, than direct hotel bookers.
In the UK, domestic OTA travelers spend more than twice on hotel accommodation than direct bookers, as well as an average of one more night stay, at 4.4 nights versus. 3.5 nights. Domestic hotel guests who book via OTAs are also more likely to use several on-property paid-for services, including room service, spa service, the mini bar, and hotel dining offerings than direct hotel bookers.
Similarly, the research found that Mexico’s domestic OTA travelers also spend more on accommodation than direct bookers, and outspend direct bookers in categories such as hotel restaurant, mini bar, hotel bar, resort services, laundry services, spa, and childcare services.
Meanwhile, France’s domestic OTA travelers spend 8 percent more than direct bookers on accommodations, 5 percent more at on-property restaurants, and 26 percent more on hotel bar services.
2. OTA travelers generate more revenue for local communities than direct bookers.
Domestic OTA travelers will be vital to destinations as they rebuild their local tourism industries, Expedia Group’s research found. According to Maher, “OTA travelers are active travelers, meaning they shop, visit cultural attractions, and partake in local cuisine, among other activities, contributing more to local communities.”
In the U.S., domestic OTA travelers spend 12 percent more on meals and drinks, 6 percent more on activities, and 27 percent more car rentals than direct hotel bookers, while Mexico’s domestic OTA travelers spend 20 percent more on meals and drinks, 24 percent more on activities, and 4 percent more on car rentals. In the UK and France, OTA travelers are more likely to visit cultural venues, historic sites and try local restaurants.
3. Travelers use OTAs for planning and research before they book.
Beyond booking, customers are also widely turning to OTAs in the planning and research phases before making a purchase. OTAs play a significant role when it comes to comparing rates across multiple travel products, from hotels to flights, to car rentals, and activities, as well as balancing features such as safety and room type.
Expedia Group found that in the U.S., the majority of both domestic and international travelers use OTAs to plan or research at least one aspect of their trip, at 61 percent and 74 percent, respectively. Additionally, 56 percent of domestic travelers and 71 percent of international travelers that use an OTA in the research and planning phases are likely to book via an OTA.
About half of domestic travelers and two-thirds of international travelers in France and the UK use OTAs to plan or research at least one aspect of their trip, and at least half of those who used an OTA for planning or researching ended up purchasing their travel from an OTA. The number was even higher for domestic travelers in Mexico, where 72 percent reported using OTAs to plan or research their trip.
4. Travelers Are Most Likely to Use OTAs to Find the Best Value
It’s common for consumers to prioritize value in periods of economic downturn, so it makes sense that in Expedia Group’s research, OTA travelers in the U.S., the UK, France, and Mexico turn to such platforms to find the best nightly rate.
Other top reasons travelers use OTAs include comparing properties in one location, seeking out the best room to meet their expectations on size, safety, and cancellation policies, buying bundled offers that combine multiple aspects of a trip, and finding promotions and earning reward points.
“Travelers have new preferences and motivations when booking accommodations, which isn’t surprising nor unexpected given our current Covid-19 environment,” Maher said. “Our research shows that OTAs outperform other distribution channels in providing options to meet a range of expectations, driving travelers to shop on online channels and compare hotel rooms and features to find the best options.”
5. How Travel Providers Can Successfully Engage With OTA Travelers
As travel starts to recover and OTA bookings begin to pick up, hoteliers must first understand who will travel first, and when and how they intend to book their stays. With more options and competition for travelers’ dollars, they are even more particular in their demands.
For example, on average, in the U.S., Mexico, and France, eight in 10 travelers said hotels in similar price ranges look the same online and that they must do more to stand out — and this crossed generational lines. “Clearly, hotels aren’t doing enough to make their value proposition unique and differentiated,” Maher said.
Hotel properties can stand out from their competitive sets by offering flexible cancellation policies, as well as incentives for bookings via mobile or discounts for longer bookings, as travelers look for extended stays to get away from home. Value-added incentives such as breakfast vouchers, free parking, or upgrades to premium rooms can help attract bookings as well.
And of course, cleanliness measures continue to be scrutinized by customers. “It has never been more critical to clearly communicate health and safety features so travelers feel confident in booking. We’ve had hundreds of thousands of properties add health and cleanliness information on Expedia.com, which includes enhanced cleaning measures, contactless check-in, social distancing, and other guest safety considerations,” Maher said.
Reputation also matters, with nearly 75 percent of U.S. and Mexican travelers reading reviews before booking a property. Travelers across all regions rate reviews about ‘room cleanliness’ and overall condition of the hotel as most influential. Reviews make an impact, especially to the heavily socially influenced American millennials and Gen Z, who showed slightly higher consideration for a property based on reviews.
Travelers are also viewing multiple photos before making a booking decision. More than half of Mexican travelers view 10 or more photos, and for millennials and Generation Z, it’s 15 or more. Meanwhile, 80 percent of French travelers and nearly 90 percent of UK travelers say photos of the hotel room are most essential to their decision.
As Maher explained, “While the travel industry continues to face a bumpy path to recovery, now more than ever, people are dreaming of their next trip. With this in mind, hotels should do their best to represent their property benefits and adjust their offerings to help encourage guests in the dreaming or research phase of their travel journey to book.”