Major Hotel Chains Report Continued Double-Digit Internet Growth With 25 Percent Increase in Q3 According to TravelCLICK's eTRAK Results

  • TravelClick
  • 12.04.06

Consumers continue an upward trend of shopping for hotels online and booking electronically, according to TravelCLICK's consolidated third quarter eTRAK results.


The data shows the Internet contributed 40.0 percent, or 8,581,936 reservations, of the total central reservation office (CRO) reservations at major hotel brands, a 24.8 percent increase compared to the same period in 2005.

The data also highlights the continuing importance of global distribution system (GDS) e-commerce with 34.7 percent, or 7,419,408 bookings, of CRO reservations coming through those channels. This is the second quarter that Internet reservations surpassed GDS reservations, or bookings made through the travel agent-focused global distribution system (GDS). The eTRAK report shows that voice represents the remaining 25.3 percent of CRO reservations, down 2.8 percent over the same time last year.

In the third quarter of 2006, brand Web sites grew again and continued to gain share compared to third-party merchant and opaque Web sites, which are increasingly used for hotel rate shopping prior to consumers booking direct on hotel Web sites. According to eTRAK, brand websites were the source of 81.2 percent of the brands' centrally booked Internet reservations.

eTRAK is a quarterly benchmarking report that enables individual hotels to track booking trends on the Internet and GDS through central reservation office (CRO) performance. The consolidated results provide industry indications based on performance trends for 21 major hotel brands and chains.

Observations for the market based on this latest data include:

Reservations through the CRO will continue to increase over the next several years, powered by a continued centralization of the distribution and revenue management functions.

The voice channel will become much more profitable. Call volume will continue to decline; however, consumers will be more informed from shopping the Internet, leading to an increased conversion rate.

The GDS will continue to outperform expectations as this channel begins aggressively pursuing programs that build travel agent confidence, such as the 'Best Available Rate' programs recently introduced by some of the major GDS channels.

'A balanced approach will win the game,' said TravelCLICK Senior Vice President of Product Management Scott Farrell. 'Although channel shifts will continue to occur, hotels will lose business if they don't take advantage of the full distribution mix, including both high-growth and mature channels. Consumers will continue to shop multiple sources, and hotels must be prepared to convert business wherever it occurs.'


Reservation Sources for Major Hotel Brands: Third Quarter 2006
 

CRO Hotel Bookings

Share of CRO Reservations

Q3 2006

Share of CRO Reservations

Q3 2005

Share Increase/(Decrease) 2006 over 2005

Internet

40.0%

35.1%

 4.9% points

GDS Travel Agent

34.7%

36.4%

 -1.7% points

Total Electronic

74.7%

71.5%

   3.2% points

Voice

25.3%

28.5%

-3.2% points

Total for CROs

100%

100%

N/A

 
 
Internet Source Breakdown for Major Hotel Brands: Third Quarter 2006
 

Internet Bookings

Share of Internet CRO Reservations

Q3 2006

Brand Sites

81.2%

Retail Sites

6.8%

Merchant Sites

7.8%

Opaque Sites

4.2%

Total Internet

100.0%

 
 
Reservation SourceGrowth Rates: Third Quarter 2006
 

CRO Hotel Bookings

Percent Growth/Decline of Reservations    2006 over 2005

Internet

24.8%

GDS Travel Agent

4.0%

 Total Electronic

14.2%

Voice

-2.8%

 Total for CROs

9.3%

 

The eTRAK report covers all central reservation office booking results including Internet, GDS and voice bookings. The report allows subscribers to compare their own performance to that of their direct competitors and the industry in general. The unique information contained in eTRAK is intended to help hotel companies determine e-commerce priorities, such as where to invest Internet advertising dollars and which sites create the best returns.

Results from this study may differ from overall hospitality industry trends on the Internet and GDS because eTRAK reflects only the performance of 21 major brands. The conclusions, however, are directional for the industry as a whole.




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