Distribution Channel Analysis NYU Investor s Conference Phantom of the OTA, Distribution Gone Wild Steve Hood Senior VP of Research, STR
Components of the Study Economic Analysis Adam Sacks/ Tourism Economics Distribution Strategy Analysis Cindy Estis Green Channel Mix Analysis - STR
Details Regarding Channel Mix Data Property data by month back to 2009 Channels: Property Direct, Brand.com, GDS, CRS, OTA OTAs: Bookings.com, Expedia, Hotels.com, Hotwire, Orbitz, Priceline, Travelocity, Travelweb, Other OTAs Categories: Merchant, Retail, Opaque
Channel Mix Participation Stage 1 (preliminary findings): Monthly numbers (some daily) US chain hotels (some WW) January 2009 through 2011 Consumed data Working with data providers, fine tuning Sample of nearly 25,000 hotels, most major brands (85), obtaining independents Comp sets 5,000 full & 16,000 sufficient
Demand & Revenue Share by Channel for Chain Hotels All Scales less Independents, Annual 2010 Preliminary Results OTA - Merchant /Retail 4.6 OTA - Opaque 2 Brand.com 17.5 OTA - Merchant /Retail 4.3 OTA - Opaque 1.2 Brand.com 20.2 CRS 12.2 CRS 15.4 Property Direct 54.3 GDS 9.3 Property Direct 46.5 GDS 12.3 Demand Share Revenue Share Prop Direct includes walk-in, group, & deals; Combining OTA Merchant/Retail; Shares vary widely by scale; total numbers are blended
Channel Demand Share by Scale Channel View Demand Share as percent of Total Demand, Annual 2010 Preliminary Results Luxury Upper Up Upscale Upper Mid Midscale 56 66 38 34 42 8 8 7 6 7 18 22 23 22 22 19 15 15 13 14 15 10 10 8 5 OTA Brand.com CRS GDS Property Direct Brand,com in UpUp & Up, CRS in Lux & UpUp, GDS at top, Prop Direct bottom
Monthly Demand Share for Merchant/Retail & Opaque OTAs January 2009 to December 2010, all Chain Hotels 6 5 4 3 2 1 0 Merchant/Retail Opaque 2009 Apr Jul Oct 2010 Apr Jul Oct 2011 Peak months are consistently July, August, and December
Luxury Chains - Demand Share by Booking Channel Channel Demand as percent of Total Demand, Annual 2009 & 2010 Preliminary Results 37 37.5 2009 24.6 23.4 2010 17.2 17.5 11.6 13.2 6.1 5.4 3.4 2.8 Brand.com CRS GDS Property Direct OTA - Merchant /Retail OTA - Opaque Compared to US Prop Direct is lower (54), some channels are higher CRS (12), GDS (9), OTA M/R (4) Opaque (2); Brand.com even
Luxury Rates by Channel Vary Actual ADR, Annual 2009 & 2010 Preliminary Results 248 255 250 253 273 273 239 239 2009 2010 239 244 204 190 92 99 Brand.com CRS GDS Property Direct OTA - Merchant /Retail OTA - Opaque Total (STAR) Opaque rate is what hotel received; Merchant/Retail is mixture of Net/Gross, Brand.com, CRS, & GDS numbers are without related costs backed out
Luxury ADR Growth Different By Channel ADR % Change By Channel, Annual 2010 versus Annual 2009 Preliminary Results 8.5 6.5 2.3 1.1 0.1 0.5 1.9 Brand.com CRS GDS Property Direct OTA - Merchant /Retail OTA - Opaque Total (STAR) Increases across channels, OTAs grew the most, then Brand.com
Channel Demand Share by Scale Scale View Demand Share as percent of Total Demand, Annual 2010 Preliminary Results OTA Brand.com CRS GDS Direct 56 66 38 34 42 23 22 22 22 18 13 14 15 15 8 8 7 6 19 10 10 7 15 8 5 Luxury Upper Up Upscale Upper Mid Midscale Economy numbers will be available soon
Merchant/Retail vs. Opaque OTA Demand Share by Scale Demand Share as percent of Total Demand, Annual 2010 Preliminary Results 5.4 Merchant/Retail Opaque 5.8 4.4 4.4 3.7 3.7 2.8 2.8 1.7 1.2 Luxury Upper Up Upscale Upper Mid Midscale Highest proportion of Merchant in Lux and Mid, highest Opaque in Upper Up
Channel Demand Share by Location for Chain Hotels Demand Share as percent of Total Demand, Annual 2010 Preliminary Results OTA Brand.com CRS GDS Property Direct 66 63 36 47 42 43 9 22 20 12 6 20 21 1314 15 15 9 3 15 8 7 9 23 19 6 4 17 8 9 Urban Suburban Airport Interstate Resort Small Metro/Town OTA high in Urban, Airport, & Resort, Direct high in Interstate & Small Town
Merchant/Retail vs. Opaque Demand Share by Location Demand Share as percent of Total Demand, Annual 2010, Chain Hotels Preliminary Results Merchant/Retail Opaque 6.6 5.4 5.1 3.6 3.9 3.5 3.1 2.4 2.6 2.3 0.7 0.8 Urban Suburban Airport Interstate Resort Small Metro/Town Urban & Airport similar, Resort has high M/R OTA and lower Opaque
Top 15 Markets by OTA Percent of Total Demand Annual 2010, Combined OTA demand compared to total demand, Chain Hotels Florida Keys Maui Island, HI San Francisco, CA Anaheim-Santa Ana, CA Hawaii-Kauai Islands San Diego, CA Ft Lauderdale, FL Los Angeles, CA New York, NY Oahu Island, HI Seattle, WA San Antonio, TX Orlando, FL Chicago, IL Denver, CO 11.1 11.0 10.9 10.9 10.7 10.6 10.5 10.1 10.0 10.0 9.3 9.0 12.4 12.9 13.6 OTA percent higher in large leisure and group destinations
Bottom 15 Markets by OTA Percent of Total Demand Annual 2010, metro markets with over 100K annual rooms, Chain Hotels Pittsburgh, PA Albuquerque, NM Jacksonville, FL Louisville, KY Nashville, TN Norfolk, VA Beach, VA Cincinatti, OH Oklahoma, City, OK Charlotte, NC Raleigh-Durham-CH, NC Birmingham, AL Knoxville, TN Greensboro-WS, NC Richmond, VA Memphis, TN 3.1 4.2 4.1 4.4 4.9 6.5 6.5 6.4 6.2 6.0 5.9 5.7 5.7 5.7 5.6 Less OTA percent in smaller second tier and southern cities
Length of Stay by Channel by Scale Annual 2010 Preliminary Results 4.1 3.4 3.5 3.3 3.2 OTA Merchant/Retail OTA Opaque Brand.com CRS GDS Direct 2.9 2.6 2.7 2.6 2.5 2.5 2.1 2.2 2.3 2.1 2.2 1.9 1.7 1.7 1.7 1.8 1.8 1.8 1.8 1.9 1.9 1.7 1.7 1.8 1.8 Luxury Upper Up Upscale Upper Mid Midscale Prop Direct highest at upper end, GDS highest in midscale
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