Did You Know?

Impact on Website vs OTAs Bookings!

What we had a look at?

Cancellation Rates All hotels currently suffer from a major cancellation impact. But what segments are actually really being affected. After several talks with many hotels I understood that mainly groups and corporate travel were affected. But what is happening in the online world where a lot of unorganized business and leisure travel happens? Our approach was simple. We looked at Booking and cancellations in January and February 2020 and compared this with the same numbers from 1st March to 5th March. See the chart below:

While OTA’s cancellations rates in the first two month were around 22%, they went up to over 55% across all three big OTA’s in Germany. Website Cancellations at the same time only increased from 5% to 13%. ‍

Conclusion 1

We all know for years that direct website bookings generate a much higher value due to significantly lower cancellation rates, but now it is an obvious fact that even in time of crisis those customers have a much higher loyalty vs OTA bookers. Conclusion 2 Metasearch driving business through your own website are on the same behavior and have the same cancellation rate as other direct website bookers. This is another strong argument that Meta has a strong impact on customer loyalty just as much as it can deliver clients to a much lower cost of distribution (at myhotelshop average Costs are around 12% vs OTA’s at 16-17%) Booking volume.

Second evaluation was around how bookings were affected in the last 5 days. This is a bit tricky, as many aspects pay into this. So we took the average bookings per day in Jan/Feb 2020 and compared it to the same number on March (1st to 5th). Then we looked at the downturn. Still there could be simple seasonal reasons. So we looked at the same numbers for 2019 (bookings per day – considering that February had a day more in 2020!). The difference in percentage could be interpreted as “Corona Impact”. Here are the numbers:

Conclusion 1

Surprisingly HRS is actually doing much better than last year, while Google demand has the biggest downturn. This is what we also noticed in the last 5 days of traffic. While Trivago is amazingly stable, Google has decreased over 30% across multiple destinations. Above numbers are Google Hotelads. But we see the same downturns on Google Ads (formerly known as Google AdWords)

Conclusion 2

Again Website bookers have a much higher stability and loyalty than OTA bookers, with a less dramatic downturn. Even though differences are not as obvious as with Cancellation rates. Take Aways In times like that your website is your most reliable channel and also your most profitable one. While other segments can evaporate in hours (groups, etc.), your direct online segment production is much more stable. If your share of direct online business is below 10% of your bookings, your business can be seriously harmed in such situations.

With very many myhotelshop clients having over 35% of the rooms sold through their website for costs averaging 10%, we can rest assured that those hotels will have a much more robust business to run over the next months As demand seems to be stable on meta channels like trivago and still on high volumes on Google, hotels should now turn more than ever to those opportunities. When other segments drop, on those markets business might be won. Especially as so many hotels still sleep and don’t take advantage of those meta channels.

You can read the full article :https://revenue-hub.com/corona-impact-website-vs-ota-bookings/