OTA's losing online hotel share

Diane Clarkson | June 06, 2008, 01:12 PM

Comscore has released information indicating consumers are increasingly shifting from online travel agencies to supplier sites. According the Comscore’s data, supplier Web sites accounted for 72% of online hotel spending during Q1 of 2008. That's a three-percentage point increase in dollar share from last year.

This trend is certainly consistent with JupiterResearch’s travel forecast. We looked at this trend specifically among online leisure and unmanaged business travelers, and forecast that hotel Web sites will account for 54 percent of online leisure and unmanaged business travel revenue in 2007, a share that will grow to 57 percent by 2012. This trend is further fueled by managed business travelers who go outside their companies’ preferred booking partners and prefer supplier sites, frequent travelers who are notably more likely to book their accommodation at supplier Web sites, and the leisure travelers shifting from telephone reservations to hotel Web sites.

This shift to supplier Web sites adds up to a challenging situation for the online travel agencies. After 9/11, online travel agencies were able to leverage the travel slowdown into opaque pricing and vacation packages. This will likely happen again as there are fewer heads in beds and hotels need the distribution partnerships. However, in 2001, the online travel agencies were more likely to be a first stop in travel research. They will have to fight for that position now.