Hotels lose out as bookers choose online agencies

Hotel chains and airlines are losing out to online travel agencies (OTAs), according to a new report by US based travel industry authority PhoCusWright Inc.

According to the report, in the first half of 2010 bookings made direct with hotels and airlines declined, as online travel agencies benefited from price-conscious comparison shoppers.

In 2008-2009 hotel websites commanded 67-72% of monthly online hotel bookings, while OTA’s represented the balance at 33%-28%.

But in Q2 2010, hotel website share dropped substantially to 57-69%. A less dramatic shift to the online travel agency channel was also seen among air bookers.

“The drop in conversion rates among airline and hotel websites was likely the result of supplier-driven price increases,” said Carroll Rheem, director, research at PhoCusWright.

“The return of corporate travel prompted suppliers to raise rates, but it appears that leisure consumers were not so ready to pay those higher prices, and online travel agencies reaped the benefits of their sensitivity.”