With the advent and acceleration of the digital age, consumers continue to adjust their behavior across all industries including approaching hotel booking differently. Whereas in the past most guests tended to book their reservations directly with the hotel by calling or physically going to the property, consumers are now much more likely to shop for and buy their rooms online and/or on a mobile device. Almost half of all bookings were through electronic channels in 2016 and a much higher percentage of consumers tap digital channels for at least one part of the shopping journey.
For a hotelier, this shifting consumer behavior from one booking channel to another can have a dramatic effect on the property’s bottom line as each booking channel comes with its own associated costs. Understanding the impact of shifting channels is key to managing a hotel’s cost of customer acquisition. It is important to recognize that hotels may incur costs from both consummated transactions as well as from maintaining a presence in some channels.
With easy access to digital booking tools, consumers have distinctly more flexibility in the booking process than they had in the past. This, coupled with the increasing consumer comfort in using digital methods to book, has resulted in the severe decline in the property direct channel.
Those guests who previously called a property or drove up/walked in, are now often turning to mobile apps or websites to shop before getting on the road. While there has been a sizeable decline in the share of bookings through these traditional channels, it is important to note that overall room demand has increased in the U.S. in each of the past 5 years so the absolute number of bookings does not show as pronounced a decline.
Excerpted from "Demystifying the Digital Marketplace: Spotlight on the Hospitality Industry," produced by Kalibri Labs through the AH&LA Consumer Innovation Forum and published by the HSMAI Foundation. Visit http://www.ahla.com/DDM/ to access this report available to HSMAI members. Use code: HSMAI2016