HSMAI, STR marketing survey examines online reservations

Hotel & Motel Management, June 7, 2004 by Harvey Chipkin

New York -- Brand hotel sites account for 75 percent of Internet reservations, according to a hotel Internet marketing metrics survey by The Hospitality Sales & Marketing Association International and Smith Travel Research.

The findings were revealed at the second HSMAI Hotel Internet Marketing Strategy Conference, held in conjunction with the Travel Commerce Conference and Expo in April in New York.

Thirty-four branded hotel chains representing nearly 1.2 million guestrooms participated in the survey, which reviewed 2002 data against 2003 results of all online reservations by brand Web sites, third-party sites and Global Distribution Systems.

Preliminary findings showed:

* Hotel branded Web sites drive Internet business with 75 percent of the volume.

* The number of hotel branded Web site reservations increased 32.5 percent in 2003 compared with 2002 to 14.8 million.

* InterActiveCorp, parent company of Expedia, Hotels.com and Hotwire, had a combined market share of 11 percent of total online reservation volume.

* Total third-party share of online reservations increased from 23 percent to 25 percent--a shift that represents almost 5 million reservations.

* Hotel branded Web sites produce the highest average daily rate, but that rate was flat year over year.

* Third-party Web sites' ADRs increased slightly from 2002 to 2003.

* Within the four GDS channels, Amadeus gained 16.4 percent in the number of reservations and WorldSpan grew 3.5-percent. Galileo and Sabre showed a decline in the number of hotel reservations by 0.5 percent and 0.3 percent, respectively. Sabre delivered the most--56 percent--hotel reservations made through the GDS.

"More than seven in 10 people who stayed at a hotel last year used a search engine, so search engine marketing is central," said Henry Harteveldt, v.p.-research for Forrester Research. "The travel industry has been operations driven, but now, marketing and distribution must be a priority."

Harteveldt said monitoring search engine productivity is extremely important and it should be done as frequently as necessary--daily in some situations.

Other highlights included:

* Gino Giovanelli, v.p., e-business solutions for Carlson Hotels Worldwide, recommended owning as many keywords as possible to protect a brand.

"If someone owns the misspelling of Radisson and can divert business, we could lose a lot of revenue," he said.

* James Zito, manager of interactive marketing & development at Affinia Hotels, said third-party sites don't focus on the company.

"Being small is an advantage because we're under the radar of most third parties," he said. "However, of those customers that we get from third parties, 25 percent become repeat customers, and of those, 90 percent then book directly on our sites."

* D.J. Vallauri, v.p. of e-commerce for Prime Hospitality, said independent hotels have opportunities to maximize search-engine business. Software can be purchased for less than $1,000 that helps track results, he said.

* Mara Hannula, senior director of e-commerce for Marriott International, said nonbrand searches are successful for the company.

"We get the best results from [nonpaid] searches that lead to sites other than brands, like destination searches; we try to maximize those using keywords and get a lot of leverage for relatively little money," she said.

* Analysis is crucial to search-engine policy, according to Emily Schubert, director of merchandising and marketing for Travelocity. She said her company owns more than 20,000 keywords and phrases.

hmm@advanstar.com