Average booking value on direct hotel websites nearly double that on third-party channels: SiteMinder report
The average booking value hotels are realising on their direct website is nearly double the value they are receiving from third-party booking channels, the global hotel industry’s leading cloud platform, SiteMinder, reveals today.
The finding is based on the 43.5 million reservations that passed through SiteMinder’s technology over the 12 months ending June 2016 to generate US$16 billion in revenue for the company’s 22,000 hotel customers around the world. An analysis of the year-long data found that the average reservation was US$340 through SiteMinder’s Channel Manager, which streamlines reservations made on more than 350 largely third-party booking websites, while the average reservation was US$600 through SiteMinder’s Internet booking engine, TheBookingButton, which facilitates bookings on a hotel’s own website.
SiteMinder’s managing director, Mike Ford, says the finding highlights that hotels should be investing heavily in ensuring they have a balanced approach to distribution and that they are focusing on their direct booking strategy in order to maximise direct conversions and therefore profit.
“Our data shows that hotels globally are achieving 1.8 times more, on average, for accommodation booked via their own direct website than via OTAs and other third-party channels. While we can’t forget the reach these third-party sites provide to hotels, , it’s important to note that direct bookings are not only achieving higher value overall but there is no commission payable on them so they are very much more profitable,” says Mr Ford.
“Today’s finding not only highlights the need for hotels to focus on direct booking technology and improving their own website and search rankings, but also points to the fact that hotels need to ensure that they are at least at parity with OTAs and other third-party channels in order to compete effectively. Too many hoteliers are giving OTAs better rates than their own websites which is not smart given the profitability of direct bookings.”
The total revenue and reservations generated through SiteMinder’s technology have grown 122 percent and 142 percent, respectively, over the past three years. Every minute, SiteMinder now powers 83 reservations worth more than US$30,000 in revenue for its hotel customer base which spans 160 countries on six continents.
In addition to TheBookingButton – which, alone, powered 1.75 million reservations worth US$1.05 billion in revenue for hotels over the past year – and The Channel Manager, SiteMinder’s technological solutions include GDS by SiteMinder, a single point of entry to the industry’s major global distribution systems, Canvas, the intelligent website creator for independent hoteliers, and Prophet, the real-time market intelligence solution that takes the guesswork out of pricing rooms.