Hotel Online  Special Report

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Hotel Branded Web Sites Capture 75% of Internet
Reservations, Third Party and GDS Sites Share
the Remaining 25%
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HSMAI and Smith Travel Research Survey
Hotel Brand Reservations Increase 32.5% in 2003


 MCLEAN, VA (April 27, 2004) – The Hospitality Sales & Marketing Association International (HSMAI) and Smith Travel Research launched the first-ever hotel Internet marketing metrics survey and presented the initial results showing that brand hotel sites account for 75% of Internet reservations.  The findings, compiled by Smith Travel Research, were revealed at the second HSMAI Hotel Internet Marketing Strategy Conference, in which ideas and solutions were discussed for “Protecting Your Brand Online.”

A total of 34 branded hotel chains, representing nearly 1.2 million rooms, participated in the survey, which reviewed 2002 data against 2003 results of all online reservations by brands, third party sites and GDS sites.

“This is the first time actual hotel brand data has been aggregated to quantify these results,” said Jens Thraenhart, director of Internet Strategy for Fairmont Hotels & Resorts, and co-chair of HSMAI’s Hotel Internet Marketing Committee, which oversaw the development of the Metrics Survey.  “We were extremely pleased and excited to see the enthusiasm from the hotel companies agreeing to participate in this groundbreaking survey,” he said.  “We are also equally excited to have Smith Travel Research as our partner in this Metrics Survey as they are the leading research company in this field and have the credibility that is needed from the hotel companies to capture this new data,” Thraenhart added.

“Internet reservations and especially the impact of third party sites is on everybody’s mind today,” said Mark Lomanno, president of Smith Travel Research.  “We look forward to working with HSMAI and our hotel clients to further explore the way that the Internet channels evolve and will keep reporting on the emerging trends,” Lomanno added.

In releasing the research at the recent HSMAI Hotel Internet Marketing Strategy Conference, the preliminary findings showed:

  1. Brand.com (hotel branded Web sites) drives Internet business with 75% of the volume
  2. Brand.com reservations increased 32.5% in 2003 over 2002 to 14.8 million
  3. InterActive Corp, with Expedia, Hotels.com and Hotwire, combined marketshare makes up 11% of the total reservation volume
  4. Total third party share of online reservations shifted from 23% to 25% from 2002 to 2003. This two-point shift represents 4.9 million reservations.
  5. Amadeus had the largest gain among the GDS, but Sabre still rules with 50+ % of GDS volume
  6. Brand.com sites produce the highest ADR, but were flat year over year
  7. Third party sites’ ADRs increased slightly from 2002 to 2003
The total number of reservations collected in this survey increased by 2.6% in 2003 to 245.4 million reservations, up from 239.2 million in 2002.

The third party sites gained two percentage points from 2002 to 2003, but 75% of Internet reservations were still being made on the branded hotel Web sites.

Within the four GDS channels, Amadeus showed a very large gain of 16.4% in the number of reservations with WorldSpan experiencing a 3.5% growth while both Galileo and Sabre showed a decline in the number of hotel reservations by 0.5% and 0.3% respectively.  Sabre, however, still maintains dominance in the field with 56% of the hotel reservations made over the GDS.

The ADR on the brand Web sites were highest in 2003 at $106.60 with no change year over year.  Other ADRs in 2003 were 

  • Travelocity at $100.80 (down from $102 in 2002), 
  • Expedia at $97.20 (up from $95.30 in 2002), 
  • Orbitz at $96.40 (up from $89 in 2002), 
  • Hotels.com at $85.40 (up from $82.40 in 2002), 
  • TravelWeb at $80.80 (down from $80.90), 
  • Worldres at $103.30 (up from $77.30 in 2002), 
  • Hotwire at $44.90 (down from $51.60 in 2002) and 
  • Priceline at $44.50 (up from $39.20 in 2002).
“Recognizing anomalies in trends, the results in reservations and ADR production for Worldres and Hotwire represent changes in those companies’ marketing strategies,” noted Thraenhart.  Worldres added a merchant model to their business mix and Hotwire expanded their hotel inventory into secondary markets from major markets only.

“This is a great indication of how we are doing,” said Gino Giovannelli, vice president, e-Business Solutions, Carlson Companies, and a member of HSMAI’s Hotel Internet Marketing Committee. “This is the first time I am able to go back to my company and provide some real answers thanks to this research,” he added.

“Our intention is to move forward by identifying other Internet marketing metrics that will give the industry as a whole a clearer view of the results of their online marketing strategies as compared to industry benchmarks,” said Robert A. Gilbert, CHME, CHA, president and CEO of HSMAI.  “This comes at a time when all hotels are scrutinizing their relationships with the third party Internet sites and seeking to find better ways to work together to everyone’s mutual benefit,” he said.  “We hope our timely research will help the hotels do just that,” he added.

Smith Travel Research is the recognized leader for U.S. Lodging Industry benchmarking.  For over 18 years, STR has collected monthly and daily operating data and reported on the state of the U.S. lodging industry, maintaining one of the worlds’ largest lodging industry databases and publishing an array of valued industry research.  For more about STR and its services, visit the web site www.smithtravelresearch.com.

HSMAI is an international organization of sales and marketing professionals representing all segments of the hospitality industry.  With a strong focus on education, HSMAI has become the industry champion in identifying and communicating trends in the hospitality industry, while operating as a leading voice for both hospitality and sales and marketing management disciplines.  Founded in 1927, HSMAI is an individual membership organization comprising nearly 7,000 members from 35 countries and 60 chapters worldwide.


 
Contact:
HSMAI
8201 Greensboro Drive, Suite 300
McLean, VA 22102
phone (703) 610-9024
www.hsmai.org
Also See: HSMAI Hotel Internet Marketing Strategy Conference Report; Keyword Bidding, Pop Ups, Pop Unders, Domain Name Piracy / January 2004
Best and Worst Performance for Airline, Hotel and Online Travel Agency Web Sites; The Speediest Site in Hotel Category Was Intercontinental.com / April 2004


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