The Summer travel season will be here before you know it – Are you ready for your guests? We took a look at the latest research available to show us which channels are used most by travelers to search and book, how far in advance they book, and their preferred travel searches online.
What Travel Services Are Booked Online?
According to recent data by PhocusWright, Hotels are second only to Airlines in online searches and bookings/reservations completed when consumers are shopping for travel. While “Activities”, the third-largest travel segment in this chart, is only at 10%, this sector is going through extraordinary change. Advances in reservation technologies has opened the door to innovative startups and helped existing suppliers adapt to the digital age. A host of startups focused on reselling activities have launched and online travel's biggest brands – including Expedia, Airbnb, and TripAdvisor – have moved into this space. There has also been considerable interest in leveraging “Activities” as well as elaborate activities named “Experiences” by the major hotel brands as well. Marriott has recently boosted its newly combined loyalty program by emphasizing the benefits of customized, special experiences one can have as a Marriott Bonvoy member.
What Booking Type Is the Most Common?
We also looked at the Statista Global Consumer Survey which offers a perspective on consumption and covers the online - and offline - world of consumers. Specifically, we dug deeper into their data that gauges how consumers make their travel arrangements.
The graph above, from the Online Travel Booking category of the survey, shows that historically since 2014 most individuals tend to book their hotel reservations as "hotel room only" rather than booking their hotel as part of a bundled “package holiday” that includes airline reservations plus activities in destination or "vacation rentals" for their stay. It is projected that this booking trend will continue well into 2023 even though vacation rentals have been on the rise each year.
What Channels Are Used Most Frequently for Bookings?
We wanted to learn first-hand which channels hotel bookers utilized the most, so we conducted our own survey in February of this year. We found the following results:
- Close to 43% of those surveyed conducted their research directly on the Hotel website and hotels were able to capture 50% of these lookers to convert them to bookers. Industry statistics show, and our own data confirms, that the efforts by brands to entice consumers to book direct is making a difference. We mentioned in our February webinar that loyalty member advertising campaigns and added perks or rewards for members have helped increase the rate of direct bookings while the OTA channel has either held steady or somewhat declined.
- Among the OTA channels, Expedia leads the pack and also have close to half of searchers on their site convert to a booking.
- We included TripAdvisor as a choice because we were interested to see how that review site might fare against traditional OTAs. In addition, TripAdvisor significantly increased their advertising to new markets in 2018 so we were curious if that had an effect. Our survey showed that TripAdvisor is NOT the top 3rd party online channel when individuals are searching for a hotel and less than 5% of those surveyed booked directly through TripAdvisor.
- Another learning from this research is that, while the majority of bookings decisions are made on your Hotel’s website and/or Expedia, guest reviews continue to be relevant. We asked this question in our survey “Have you booked a hotel based on their reviews on a particular website?” Close to 56% of survey respondents in all age groups said “yes” with an even larger percentage 64% of the 18 – 34 year old segment - who are considered digital natives - choosing Yes. This confirms that potential bookers are searching what a past guest says about their experience at your property and observing how a hotel responds.
Short Booking Window for Hotel Rooms
Another interesting behavior of hotel shoppers that we examined using the Phocuswright data was how far in advance do travelers book their hotel rooms?
- We found that the booking window is short - with more than half of online bookings being completed on the day of or within 7 days of an individual’s travel.
- This can be a great opportunity for Hotels to capture last minute bookings by offering specials during their slow occupancy times and add incremental revenues to their bottom line.
Mobile/Tablet vs Desktop
Next, we looked at which devices are the most popular to book travel – smartphones, tablets, or desktop computers. Travelers have become a highly mobile audience, so it is important to keep an eye on the devices guests are using to book their hotel rooms.
It’s not surprising that among all travel categories – airline, care rentals, cruises, hotels, activities - most generate more than one-third of their bookings on mobile devices, according to research by Criteo. The highest amount of bookings occurs in the Hotel category. Criteo’s research shows that over one third of people now use a mobile device to book a hotel room.
However, when you look at the data by channel, as this graph shows, you see that Hotels are lagging behind in Mobile bookings when compared to OTAs. Only 10% of travelers utilize the Hotel Brand app on their smartphone, while 39% of travelers utilize an OTA app when searching and booking their Hotel rooms.
Why Are Hotels Losing Mobile Share to OTAs?
With that in mind, we considered reasons why hotels may be losing mobile share to OTAs. Some hotel brands have made progress in these areas but for others change has been slow.
Hotel websites have been around longer than OTAs so their designs haven’t been strategically adapted to mobile, which can result in a frustrating experience for users. Because they were built as desktop sites, they offer too many options which does not translate well to a smaller screen and makes it hard for potential bookers to find what they’re looking for. Website content must be redesigned for a mobile experience and not include all content available on a desktop version.
In addition, viewing content on a mobile device is very different from a desktop experience. By definition, mobile users are on the move and more distracted by the activities they are doing while they are out and about. Desktop or laptop users typically stay in one place and are more focused on the task at hand. Mobile browsing is more spontaneous and many searching for travel on a mobile app are last-minute bookers. Consider how that ties in with the short booking window mentioned earlier.
Google research shows that consumers expect to find relevant travel information faster than ever before and that having a fast, easy-to-use mobile experience is critical. They found that the most common mobile travel activity is looking for discounts or offers and when consumers find a great offer, they are willing to convert on their mobile device. The claim to fame for OTA channels has been that travelers can find what they are looking for quickly and book it easily within two minutes. Hotels need to do the same. Offer competitive pricing upfront - one or two offers to choose from rather than a plethora of choices - and make it easy to book without a fuss.
As you prepare for the busy summer travel season, we wanted to share this research to paint a picture of the online (including mobile) behaviors of potential bookers searching for your hotel. The great news is that more travelers are booking directly on hotel websites and hotel terms are some of the most searched items online by travelers. This gives Hotels the advantage of being found organically by travelers looking for lodging. Take time to check your listings on Google when searching for Lodging in your area and work with your e-Commerce to make any corrections.
Leverage those shorter booking windows, by adding last-minute incremental revenue for your low forecasted occupancy nights. Because OTAs serve a purpose during those low periods, work with your them to offer last minute discounts and offer these special discounts also on your Hotel's website.
Mobile searches for hotels are on the rise, and so are mobile bookings. By 2021, eMarketer projects that desktop/laptop and mobile booking volume will essentially be equal. Make sure that you review how your hotel information appears on mobile devices – check for accuracy and that discounts you are offering are featured prominently. With these strategies in place, you’ll be in good shape to vie against your competitors during high or low seasons.
Download an infographic PDF with all the charts shown in this post.
For more information on this topic, watch our webinar Preparing for Summer Travel: What Influences the Hotel Choices of Online Lookers and Bookers?
Do You Need a Strategic Partner?
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