Distribution Channels in Swiss Hotels: Online Travel
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1 Distribution Channels in Swiss Hotels: Online Travel Agencies Gain More Market Shares in 2010 Results of an Online Survey Among Members of the Swiss Hotel Association (hotelleriesuisse) i in January 2011 Roland Schegg, Michael Fux et Thomas Allemann roland.schegg@hevs.ch / michael.fux@hevs.ch / thomas.allemann@hotelleriesuisse.ch February
2 Executive Summary (I) Direct booking channels (telephone, fax, walk-ins, , Web form) are still dominant for Swiss hotels with 71.1% of overall bookings (2008: 75.4%) -> hoteliers have large control over distribution. On average more than half of all bookings (55.9%) are mediated through electronic channels ( , Web form, real-time booking, GDS & IDS), whereas real-time booking channels with availability check and credit card payment have a market share of nearly 20% (booking engine on own Website 4.9% + GDS 1,4% & IDS 13.6%), an increase of 7,8% compared to Sales on traditional channels (30,2%) like telephone, letter or fax and through h tourism organizations (6,2%) tend to decrease respectively to be stagnant. 2
3 Executive Summary (II) Booking.com, HRS and destination management systems used by tourism organizations are the most frequently used OTA/IDS in the Swiss hospitality sector. Booking.com has a penetration rate of 90%. For 75% of the hotels this platform is an important to very important distribution channel and seems to have become the leader in online sales in the Swiss hospitality sector. A rough estimation of online sales in the Swiss hotel sector based on data from our survey results in an overall turnover of probably more than 850 Million CHF in 2010 and commission costs for online channels of some 90 Million CHF (out of 160 Mio in total). 3
4 The Study Objective: Monitoring of booking trends on different distribution channels in the Swiss hospitality sector. Research instrument: online survey Administration: Over 2000 hotels have been contacted in early January 2011 by , all members of the Swiss hotel association (hotelleriesuisse). Relaunch of the survey end of January Response rate: 244 replies -> 12% Similar studies have been conducted already in the past: 2003, 2005, 2007, 2009 and
5 Distribution Channels in the Swiss Hospitality Sector % 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Telephone Walk-ins Booking form on Website Real-time booking on hotel website IDS GDS Travel agencies Tour operator LTO 2006 (n=100) 2008 (n=184) 2009 (n=198) 2010 (n=211) RTO NTO (STC) Hotel association Chain/affiliation Event organiser Conference organiser 5 Facebook
6 Distribution Channels in the Swiss Hospitality Sector % 10.0% 20.0% 30.0% 40.0% Tradit. channels (telephone, fax, letter, walk-in) Hotel website (form & realtime booking) Internet Distribution Systems (IDS) Global distribution system (GDS) Travel agency Tour Operator (TO) Local tourism organisation (LTO) Swiss Tourism (ST) & Regional tourism organisation (RTO) Industry association (e.g. hotelleriesuisse) 2002 (n=202) 2005 (n=94) 2006 (n=100) 2008 (n=184) 2009 (n=198) 2010 (n=211) Hotel chain & affiliation Event organizer Conference organizer 6 Facebook
7 Distribution Trends in the Swiss Hospitality Sector Distribution through ICT ( , booking form on hotel website, realtime booking hotel website GDS, OTA/IDS) Online real-time booking (GDS, OTA/IDS, real-time booking hotel website) 2010 (n=211) 2009 (n=198) 2008 (n=184) 2006 (n=100) 2005 (n=94) 2002 (n=202) Distribution through tourism organisations (LTO, RTO, NTO) Direct distribution (customer-hotel: telephone, fax, letter, walk-ins, booking form on website, real-time booking hotel website) Traditional distribution (telephone, fax, letter, walk-ins) 7 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
8 Importance of Online Travel Agencies (OTA) used by Swiss Hotels 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Booking.com Website local tourism organisation myswitzerland.com / STC HRS (Hotel Reservation System) Expedia und hotels.com hotel.de other IDS Venere hotel.ch ebookers GHIX (Global Hotel Index) Lastminute Travelocity Hotelguide.com Tiscover Opodo HostelBookers Rates to go 8 ebay 0=not used 1=not important for bookings =very important for bookings
9 Evolution of OTA use ebay Rates to go HostelBookers Opodo Hotelguide.com Tiscover Travelocity Lastminute Global Hotel Index (GHIX) ebookers hotel.ch Venere hotel.de Expedia und hotels.com HRS (Hotel Reservation System) Website NTO Website LTO Booking.com 9 0% 20% 40% 60% 80% 100%
10 Evaluation of booking.com by Swiss hotels (Source: Schegg & Fux 2010, n=275) Booking.com is an easy booking tool for the customer Booking.com is a relevant distribution channel in international markets (brings bookings and visibility) Booking.com is easy to handle for the hotelier (e.g. update of availabilities and rates) Booking.com offers good features for describing the property on the platform (text, photos, links, etc.) Booking.com has an efficient and professional 3 marketing 4 1=very poor 2 Booking.com manages the administrative processes in an easy and professional way Booking.com is a relevant distribution ib ti channel in the national market (brings bookings and visibility) 5 6 7=very good Booking.com has an advanced booking technology Booking.com offers good sales conditions (commission) 10 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
11 Evaluation of Booking Systems of Tourism Organizations (DMS) by Swiss Hotels (Source: Schegg & Fux 2010, n=181) The DMS manages the administrative processes in an easy and professional way The DMS offers good sales conditions (commission) The DMS is easy to handle for the hotelier (e.g. update of availabilities and rates) The DMS is a relevant distribution channel in the national market (brings bookings and visibility) The DMS is an easy booking tool for the customer The DMS offers good features for describing the property on the platform (text, photos, links, etc.) The DMS is a relevant distribution channel in international markets (brings bookings and visibility) 1=very poor =very good The DMS has an advanced booking technology The DMS has an efficient and professional marketing 11 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
12 What are your Selection Criteria for Online Travel Agencies (OTA) resp. Internet Distribution Systems (IDS)? Relevance of IDS for target segements Relevance of IDS as sales channel Marketing power of IDS / presence in markets Information, presentation of hotel (photos, texte, etc.) Data maintenance (e.g. interface with PMS) 1=not at all important 2 Booking technology & features 3 4 Costs (e.g. commission) 5=very important Added value for guest (e.g. guest evaluation) Back-office efficiency (e.g. biling) User support (hotline, stats for hotel, etc.) 12 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
13 OTA/IDS commissions (based on responses from hotels) Lastminute Expedia und hotels.com Opodo ebookers Venere Travelocity Booking.com hotel.ch hotel.de Hotelguide.com Tiscover HRS Rates to go HostelBookers ebay STC andere Plattform DMS GHIX Max Median Average
14 Estimation of Revenues and Costs by Distribution Channel Revenus Revenus Bookings (%) in 2009 Bookings (%) in (in Mio francs) 2010 (in Mio francs) Difference ( ) Average commission (estimate) Costs per distribution channel 2010 Tradit. channels (telephone, 0% fax, letter) '062 1' Walk-ins % '164 1' % 0.0 Reservation form on hotel 0% website Realtime booking on hotel 4% website Internet Distribution Systems 12% (IDS) Global distribution system 14% (GDS) Travel agency % 11.4 Tour Operator (TO) % 20.5 Local tourism organisation 9% (LTO) Regional tourism organisation 9% (RTO) Swiss Tourism (ST) % 7.0 Industry association % Hotel chain & affiliation % 5.3 Event organizer % 3.6 Conference organizer % total 4'245 4'
15 Use of a Channel Manager 31.8% No Yes In 2009 only 18% of Swiss hotels used a channel manager; in 2010 one out of three hotels used such a tool. 68.2% 15
16 Contact Roland Schegg & Michael Fux HES-SO Valais Wallis Institute of Tourism (ITO) Swiss School of Tourism TechnoPôle 3 CH-3960 Sierre / Switzerland Tel roland.schegg@hevs.ch / michael.fux@hevs.ch Bachelor of Science HES-SO SO in Tourism Swiss School of Tourism ( Thomas Allemann hotelleriesuisse Monbijoustrasse 130 CH-3001 Berne / Switzerland Tel thomas.allemann@hotelleriesuisse.ch 16
17 Glossary CRS Central Reservation System DMO Destination Management Organisation DMS Destination Management System (TOMAS, Deskline) GDS Globale Distribution System (Amadeus, Sabre, etc.) hs hotelleriesuisse (Swiss Hotel Association) HRS Hotel Reservation Service IDS Internet t Distribution ib ti System LT supplier LTO Local Tourism Organisation NTO National Tourism Organisation OTA Online Travel Agency PMS Property Management System (Front Office) RTO Regional Tourism Organisation SEM Search Engine Marketing (p.ex. Google Adwords) d SEO Search Engine Optimisation ST Switzerland Tourism (NTO) STC Switzerland Travel Centre (CRS of Switzerland Tourism) 17
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