A recent European survey has revealed some incredible data in the hotel accommodation sector.
HOTREC, the umbrella association of national trade associations representing hotels, restaurants and cafes across Europe, has released some eye-opening figures from a study involving 2000 hoteliers.
The summary of the report suggests:
- 1 out of every 4 overnight bookings were made via an OTA
- 3 OTA players make up 92% of this traffic
- 2 OTA players (Expedia & Booking.com) make up more than 80% of this traffic
- Priceline owned Booking.com represents 60% of the OTA traffic
With more and more consolidation of the OTA industry, there is less competition across channels, with the “parity clause” issues seemingly having little effect on the large OTA’s.
Direct hotel bookings have now dropped to an industry average of 55%, and the OTA’s are now one of the biggest costs of acquisition to a hotel.
Christian de Barrin, CEO of HOTREC comments:
“The study clearly shows that online platforms are steadily acquiring bigger and bigger shares in hotel bookings, while the hotels’ own distribution channels are on a decline making dependency on OTAs growing. The situation is especially critical as it seems that the OTA market tends to become a duopolistic (or even monopolistic?) one in Europe, with one player (Booking.com) controlling closely 2/3 of the market”
OTA’s are now clearly in the driving seat when it comes to hotel allocations and hotel bookings.
Global chains such as Marriot, Accor and IHG are developing strategies to combat this rise, including offering lower rates when signing up to be a member of their “frequent stay” programs, and spending millions in global advertising campaigns. However with Booking.com’s Priceline parent spending $2.8 (US) billion per year (source tnooz) in online advertising however, it is obvious where the financial muscle is within the industry.
The press release from HOTREC can be read here