Online Travel Agencies (OTAs)

Online Travel Agencies (OTA): Friend or Foe?

Despite High Awareness Among Consumers, Majority of Travelers Never Claim Membership in Loyalty Programs by Online Travel Agents.

HTrends In the past five years, online travel sales have grown from $93-Billion to over $160-Billion, with hotel reservations accounting for almost 40% of this total volume. Online Travel Agency (OTA) websites are responsible for one-third of the online hotel bookings, indicating their importance in the distribution and reservation chain.

The 2013 Hotel SCORES™ syndication, which measures the impact that Hotel Frequent Guest Programs (FGP) have on hotel usage and loyalty, shows that 70% of FGP Program members are aware of Loyalty Programs offered by OTAs.

According to David Pluchino, Vice President, Phoenix Marketing International, this high awareness should be expected. “Today, all one has to do is turn on the TV to become aware of OTA programs. We see the Travelocity Gnome and the Priceline spokesperson duo of William Shatner and Kaley Cuoco almost on a daily basis.”

Despite this high awareness of OTAs among Hotel Loyalty Program Members, very few (29%) claim membership in an OTA Loyalty Program. “When we look at who among FGP Program members carries a membership in OTA Programs, we see that OTA Members tend to be most likely from Generation “Y”, prefer Economy-Tier Lodging products, and spend an average of 25 nights a year in hotels. These individuals appear to be a less-experienced traveler than most members of most members of Hotel FGP Programs.”

Pluchino believes that there is a place for the OTA web sites and OTA Loyalty Programs in the distribution channels, but hotels should be looking at offering a rationale for using their own web sites. “While the consumer may be able to get a room at a property for the same price whether they use an OTA site or a hotel site, it is in the financial interest of the hotel to drive traffic through its own site. It is interesting to note the emergence of Roomkey.com, a web site developed by a combination of six hotel companies in early 2012. This site offers the traveler the ability to earn points in the hotel FGP Programs, something the traveler may or may not be able to do when booking through an OTA site.”

In closing, Pluchino states, “Regardless of how an individual books a hotel room, one of the key issues facing the industry - both OTAs and hotel companies - is educating the consumer in the booking channel options they have and providing an easy-to-use reservation platform.”

Entering its second decade, Hotel SCORES™, is an annual syndicated study conducted by Phoenix Marketing International in eleven countries (USA, Canada, France, Germany, the United Kingdom, Russia, the UAE, India, Australia, Japan, and the People’s Republic of China). Each year, the study interviews 3,500 active FGP members in the USA and 1,000 FGP members in each of the other ten countries. The study captures key metrics (Awareness, Membership, Usage and Preference) on 36 different FGP Programs, benefit importance, benefit delivery share of room nights by FGP Program, Awareness and usage of OTAs, Mobile Phone Apps, and co-branded credit card usage.



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