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Cha-ching: Is the OTA Guest Profile Becoming More Profitable?

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March 26, 2018
Brandon Ehrhardt

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A new report conducted by Oxford Economics reveals OTA guests stay 8.4 percent longer than non-OTA guests and spend $176 (17.5 percent) more per trip overall than non-OTA guests during their travel period, driven primarily by on-property spend. 
We’ve all heard the folktales before: “OTA shoppers only care about finding the lowest price!” “OTA customers will show up in your lobby with a full tailgate!” “OTA guests won’t eat in your restaurants!” 
While myths that OTA shoppers only care about savings have persisted for years, the hard facts from the Oxford Economics Guest Spend Study show that the opposite is true. The study, conducted in conjunction with Longwoods International, examined guest spend analysis that covered 98,815 guest trips in the United States. The study segmented OTA guests versus non-OTA guests and covered nearly all spend categories, such as dining and entertainment, while travelers were in trip. The results solidify a growing trend in the travel industry: OTA guests are bringing greater or equal value to hoteliers and destination markets than any other travel segment. 
On a per trip basis, including transportation, retail, dining and entertainment, OTA guests spend $1,183 compared with $1,007 for non-OTA guests (as depicted in figure 1). The Oxford data suggests the length of trip is helping to drive the OTA spend premium with OTA guests staying approximately 8 percent longer than their non-OTA counterparts, which makes OTA guests a valuable customer for hoteliers. 
The Oxford survey also recorded greater spend by OTA guests in other trip segments when compared with non-OTA guests. As shown in Figure 2, this included transportation, food and  beverage, retail and entertainment. 
The OTA segment outspent non-OTA guests by 17.5 percent in food and beverage, further demonstrating OTA guests appreciate dining and nightlife activities while at the destination.
These macro trends revealed by the Oxford economic data hold true during market deep dives as well. According to a separate Expedia gaming survey conducted in August 2017 that surveyed more than 2,000 U.S. respondents, Expedia Las Vegas bookers spend an impressive 31 percent of total trip spend at the hotel. This 31 percent spend premium does not include the cost of lodging. When visiting Las Vegas, Expedia travelers visit an average of three different hotels per trip, and spend more than the Las Vegas Convention and Visitors Authority (LVCVA) average on shopping, dining, shows, sightseeing and transportation. 
As detailed, the Oxford Economics data suggests that OTA guests can and will spend significantly more than non-OTA guests and remain an integral and valuable part of the travel ecosystem. As the hotel industry powers into 2018, it’s critical for hotel owners and operators to utilize data and their lodging partners to understand the landscape of the ever-changing travel industry. By strengthening partnerships that provide incremental insights into their business, owners and operators are putting success well within reach.

1 2016 Las Vegas Visitor Profile Study, LVCVA and GLS Research, April 2017

Brandon Ehrhardt is the director of strategic initiatives, Expedia, Inc.

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