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The Power of Online Travel Agencies (OTA): Results of an Online Survey on Hotel Distribution in Germany, Austria and Switzerland for 2011
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The Power of Online Travel Agencies (OTA): Results of an Online Survey on Hotel Distribution in Germany, Austria and Switzerland for 2011

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Online distribution for the hotel industry in Germany, Austria and Switzerland (DACH) is becoming increasingly important. On average, today in the DACH region already 27% of bookings are generated …

Online distribution for the hotel industry in Germany, Austria and Switzerland (DACH) is becoming increasingly important. On average, today in the DACH region already 27% of bookings are generated electronically in real-time through online booking agencies (OTA), hotel websites, global reservation systems (GDS), central reservation systems (CRS) of hotel chains and hotel cooperation or social media platforms. This represents an estimated turnover of over 7.5 billion euros. These are some of the results of a joint survey by the German Hotel Association (IHA), the Austrian Hotel Association (ÖHV) and the Swiss Hotel Association (hotelleriesuisse) in collaboration with the Institute for Tourism of the University of Applied Sciences Western Switzerland Valais (HES-SO Valais) in Sierre.

The hotel associations of the three countries have measured for several years now in independent surveys market shares and developments in the respective distribution channels. For the first time, a uniform data set has been established with scientific support in Germany, Austria and Switzerland in order to analyze the overall developments in hotel sales in a transnational context.

According to the study which was conducted between December 2011 and January 2012 and based on the responses of 1,400 hotels in Ger-many, Austria and Switzerland, online travel agencies (OTA) have reached a market share of 19% (D-A-CH). OTAs dominate electronic distribution with the proportion in Germany (20%) exceeding those of Switzerland (16%) and Austria (13%). The trend towards online booking channels is unbroken, while both traditional direct sales and sales generated by tourism partners (e.g. travel agencies, tourism organizations) are constantly declining.

Hotel Reservation System (HRS), Hotel.de and Booking.com are the most widely used OTAs in Germany, Austria and Switzerland. Booking.com with 43% in Austria and 53% in Switzerland is the dominant platform in these countries.

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  • 1. The Power of Internet Distribution Systems (IDS) Results of an Online Survey on Hotel Distribution in Germany, Austria and Switzerland for 2011 Roland Schegg & Michael Fux roland.schegg@hevs.ch / michael.fux@hevs.ch Institute of Tourism, University of Applied Sciences of Western Switzerland Valais Sierre, March 20121
  • 2. Table of Contents • Executive Summary • Background of the Study • Booking Channels • IDS (Internet Distribution Systems) • Costs of Distribution • Selection Criteria for IDS • New Forms of Distribution • Channel Manager2
  • 3. Glossary of the Used Terms and Abbreviations CRS Central Reservation System D-A-CH Germany, Austria and Switzerland DMO Destination Management Organisation DMS Destination Management Systems such as TOMAS or Deskline from Feratel GDS Global Distribution Systems (e.g. Amadeus or Sabre) hs hotelleriesuisse (Swiss Hotel Association) HRS Hotel Reservation Service (http://www.hrs.de/) IDS Internet Distribution System (online booking platforms) IHA German Hotel Association LT Supplier LTO Local Tourism Organisation NTO National Tourism Organisation OTA Online Travel Agency ÖHV Austrian Hotel Association PMS Property Management System (hotel software, Front Office System) RTO Regional Tourism Organisation (e.g. Valais Tourism) SEM Search Engine Marketing (e.g. Google Adwords) SEO Search Engine Optimisation STC Switzerland Travel Centre (national booking system in Switzerland)3
  • 4. Executive Summary : Direct Distribution still Important• Direct bookings (telephone, fax, walk-ins, e-mail, Web form) without intermediaries are still the dominant channels for the hotels in Germany, Austria and Switzerland, even though their proportion in the distribution mix is steadily decreasing since a couple of years. – In 2011, 67% of the bookings in Switzerland, 68% in Germany and 71% in Austria were generated via direct sales channels.• Traditional booking channels as telephone, letter or fax, as well as sales through tourism partners (travel agencies, tourism boards) are declining. The losses through these channels have been more than 30% over the last 10 years.4
  • 5. Executive Summary: Growing Shares of Electronic Distribution Channels• Overall more than one out of four bookings is generated through online channels. Internet Distribution Systems (IDS/OTA) are clearly dominant (D-A- CH: 18.9%, D: 20.8%, A: 12.6%, CH: 16.4%) in this context.• The proportion of real-time bookings on the own website of the hotel only reaches 5.5% (individual hotels in Germany: 4.9%, hotel chains in Germany: up to 8.2%).5
  • 6. Executive Summary : The Power of Internet Distribution Systems (I)• One out of four enterprises in our study generates more than 30% of all sales through IDS. 18% of the hotels show a proportion of IDS in the distribution mix between 20 and 30% which underlines the importance of these portals as well as the dependence of many hotels on these players.• According to our extrapolations, online booking channels (GDS, IDS/OTA, real- time booking on hotel website, CRS) generated a turnover of 7.6 Billion Euros in the three countries.• The total amount of commissions paid to intermediaries by the hotels totals almost 1.3 Billion Euros. Just under 800 Million Euros were spent for commission to the online channels.• With estimated 594 Million Euros, most of the commission payments have gone to IDS such as HRS, hotel.de or booking.com.6
  • 7. Executive Summary : The Power of Internet Distribution Systems (II)• Booking.com, Hotel Reservation Service (HRS) and hotel.de are the most frequently used IDS in Germany, Austria and Switzerland.• Booking.com with 43% in Austria and 53% in Switzerland is the dominant platform in these countries.• In Germany, HRS with a market share of 34.4% is the clear leader. If you add the booking shares of hotel.de (15.8.5%) and Tiscover (0.4%) to it, HRS reaches 50.6% of the bookings realized through online booking channels in Germany, followed by booking.com with 28.5%.• Expedia is another significant player, especially for business hotels, for 4-5 star hotels and for hotel chains.7
  • 8. Executive Summary: Distribution Trends• One out of five hotels use deal offers such as DailyDeal or Groupon today, amongst them especially big hotels, 5 star hotels and hotel chains.• About 30% of the questioned hoteliers use a channel manager in order to update the availabilities in the multiple distribution channels. However, more than 60% of the enterprises still update rates and availabilities manually in the different channels. The remaining hotels use their hotel software respectively reservation systems or cooperate with agencies.• Just under one third of the enterprises make use mobile forms of distribution, more frequently in the form of a website adapted to mobile internet, rather than a specific app.• The hotels investing in these new possibilities of distribution are especially 4-5 star hotels, hotel chains and big hotels.8
  • 9. Table of Contents • Executive Summary • Background of the Study • Booking Channels • IDS (Internet Distribution Systems) • Costs of the Distribution • Selection Criteria for IDS • New Forms of Distribution • Channel Manager9
  • 10. Background of the Study • To get an insight into the distribution trends in the hospitality sector on an European level, the German Hotel Association (IHA), the Austrian Hotel Association (ÖHV) and the Swiss Hotel Association (hotelleriesuisse) in collaboration with the Institute of Tourism of the University of Applied Sciences Western Switzerland Valais (HES-SO Valais) in Sierre have teamed up to conduct a common survey. • The online survey for the reference year 2011 was conducted between December 2011 and January 2012, terminated on 18 January. Because of the importance of the hotel chains in Germany a separate survey was conducted (responses of 28 chains involving more than 400 hotels). • The present results are based on the responses of 1406 hotels in Germany, Austria and Switzerland (D-A-CH), which corresponds to a response rate of about 10% (9.7% in Austria, 10% in Switzerland and 12.8% in Germany).10
  • 11. Survey Details Switzerland Austria Germany TotalResponse 201 119 - 686 individual hotels 1406survey - 28 hotel chains with at least 400 hotels -> that means responses from a minimum of 1086 hotelsPopulation 2035 1216 About 8.500 hotels participating in the German Hotel Classification and IHA membersResponse rate 10% 9.7% 12.8%11
  • 12. Table of Contents • Executive Summary • Background of the Study • Booking Channels • IDS (Internet Distribution Systems) • Costs of the Distribution • Selection Criteria for IDS • New Forms of Distribution • Channel Manager12
  • 13. Booking Channels (D-A-CH) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Telephone 24.1% E-mail 19.7% Internet distribution systems (IDS) 18.9% Booking form on hotel website 8.4% Walk-ins 5.7% Real-time booking on hotel website 5.5% Tour operators / travel agencies 4.9% Letters / fax 4.3%Local and regional tourism organizations 2.7% Global distribution systems (GDS) 1.6% Event & conference organizers 1.5% Other channels 1.1% Hotel chains & affiliations with CRS 0.9% National tourism organizations 0.6% 13 Social media 0.2%
  • 14. Aggregated Booking Channels (D-A-CH) 10.2% Traditional distribution (telephone, fax, letters, walk-ins, others) 34.7% Electronic requests (e-mail, booking form own website) 27.0% Real-time online booking (GDS, IDS, booking engine on hotel website, hotel chains with CRS, social media) Tourism partners (tour operators, DMO national-local, conference/event organizers, others) 28.0%14
  • 15. Direct versus Indirect Booking (D-A-CH) 31.8% Direct distribution (hotel- customer) Indirect distribution (hotel- intermediary-customer) 68.2%15
  • 16. Booking Types in 2011 (D-A-CH) Personal (walk-ins, others, subdivided) 6.3% Written (fax, letters, e-mails, booking form on website) 32.4% By phone (telephone, Call Centre) 24.1% Electronic (IDS, real-time bookings on website, GDS, CRS, social media) 27.1% Tourism partners (tour operators, travel agencies, tourism organisations, conference & event organizers, others subdivided) 10.3%16
  • 17. Profiling of Booking Channels by Enterprise Characteristics (1)• The traditional direct distribution channels (telephone, letter, etc.) are considerably less important in hotel chains and in the classical leisure hotels than in small, urban hotels which address business travellers.• Real-time bookings on the own hotel website are noticeably more frequent in urban hotels and hotel chains than in other hotel types.• Online sales (IDS/OTA, GDS) are clearly more important in urban and in business hotels than in leisure hotels. It is interesting to observe, that for big 4-5 stars hotels the IDS/OTA have comparably low market shares, simultaneously the bookings generated through GDS are above-average though.17
  • 18. Profiling of Booking Channels by Enterprise Characteristics (2)• Above-average sales through travel agencies and tour operators are realized by hotel chains in holiday resorts. In this context, big 4 star hotels (> 50 rooms) play an important role.• Local and regional tourism organizations are clearly more important for hotels positioned in the leisure segment than for other types of enterprises such as big 4- 5 star hotels or hotel chains. In business hotels traditional booking channels such as telephone and letter/fax on the one hand and online channels such as IDS/OTA or GDS on the other hand are comparably more important than in other types of enterprises. In leisure hotels requests via electronic channels such as e-mail and website form as well as bookings through tourism partners (travel agencies/tour operators and tourism organizations) are clearly more used than in other types of enterprises. 18
  • 19. Germany19
  • 20. Booking Channels of the Hotels in Germany 2011 Share of total Bookings 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Telephone 25.0% Internet distribution systems (IDS) 19.5% E-mail 17.1% Booking form on hotel website 6.2% Real-time booking on hotel website 5.9% Tour operators / travel agencies 5.9% Walk-ins 5.3% Letters / fax 4.9% Global distribution systems (GDS) 2.7%Local and regional tourism organizations / associations 2.3% Conference & event organizers 1.9% Hotel chains & affiliations with CRS 1.8% Other distribution channels 0.9% National tourism organizations 0.5% Social media 0.2% The values for Germany represent weighted means between the 20 values of the individual and the chain hotels.
  • 21. Booking Types for the Hotels in Germany 2011 Personal (walk-ins, others subdivided) 5.7% Written (fax, letters, e-mails, booking form on website) 28.2% By phone (telephone, Call Centre) 25.0% Electronic (IDS, real-time bookings on website, GDS, CRS, social media) 30.1% Tourism partners (tour operators, travel agencies, tourism organizations, conference & event organizers, others subdivided) 11.0% The values for Germany represent weighted means between the21 values of the individual and the chain hotels.
  • 22. Booking Types for the Hotels in Germany 2011 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% Personal (walk-ins, others subdivided) 5.8% Written (fax, letters, e-mails, booking form on website) 28.2% By phone (telephone, call centre) 25.0% Electronic (IDS, real-time bookings on website, GDS, 30.1% CRS, social media)Tourism partners (tour operators, travel agencies, tourism organizations, conference & event organizers, others 11.0% subdivided) The values for Germany represent weighted means between the22 values of the individual and the chain hotels.
  • 23. Subdivision of electronic Bookings in Germany 2011 Share of total Bookings Internet distribution systems (IDS) 19.5% Real-time bookings on own website 5.9% Global distribution systems (GDS) 2.7% Hotel chains and affiliations with CRS 1.8% Social media 0.2% Share of total bookings 30.1% The values for Germany represent weighted means between the23 values of the individual and the chain hotels.
  • 24. Austria24
  • 25. Booking Channels in Austria 2011 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% E-mail 27.6% Telephone 15.3% Booking form on hotel website 14.2% Internet distribution systems (IDS) 12.6% Tour operators / travel agencies 9.6% Real-time booking on hotel website 6.6% Walk-ins 4.0% Letters / fax 3.1%Local and regional tourism organizations / associations 2.3% Event & conference organizers 1.5% Global distribution systems (GDS) 1.2% Other distribution channels 1.0% Hotel chains and affiliations with CRS 0.6% Social media 0.4% National tourism organizations 0.2%25
  • 26. Booking Types for the Hotels in Austria 2011 Personal (walk-ins, others subdivided) 4.5% Written (fax, letters, e-mails, booking form on website) 44.9% By phone (telephone, Call Centre) 15.3% Electronic (IDS, real-time bookings on website, GDS, CRS, social media) 21.4% Tourism partners (tour operators, travel agencies, tourism organizations, conference & event organizers, others subdivided) 14.1%26
  • 27. Booking Types for the Hotels in Austria 2011 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% Personal (walk-ins, others subdivided) 4.5% Written (fax, letters, e-mails, booking form on website) 44.9% By phone (telephone, call centre) 15.3% Electronic (IDS, real-time bookings on website, GDS, 21.4% CRS, social media) Tourism partners (tour operators, travel agencies, tourism organizations, conference & event organizers, 14.1% others subdivided)27
  • 28. Switzerland28
  • 29. Booking Channels in Switzerland 2011 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% E-mail 23.4% Telephone 20.6% Internet distribution systems (IDS) 16.4% Booking form on hotel website 7.5% Real-time booking on own hotel website 6.3% Walk-ins 5.9% Tour operators / travel agencies 4.7% Letters / fax 3.1% Local and regional tourism organizations / associations 3.1% Conference & event organizers 2.2% Global distribution systems (GDS) 2.1% National tourism organizations 1.8%Hotel chains & affiliations with CRS (e.g. Accor, Maritim,… 1.5% Other distribution channels 1.4% Social media 0.1% 29
  • 30. Booking Types for Hotels in Switzerland 2011 Personal (walk-ins, others subdivided) 6.6% Written (fax, letters, e-mails, booking form on website) 34.0% By phone (telephone, Call Centre) 20.6% Electronic (IDS, real-time bookings on website, GDS, CRS, social media) 26.4% Tourism partners (tour operators, travel agencies, tourism organizations, conference & event organizers, others subdivided) 12.5%30
  • 31. Booking Types for the Hotels in Switzerland 2011 0.0% 10.0% 20.0% 30.0% 40.0% Personal (walk-ins, others subdivided) 6.6% Written (fax, letters, e-mails, booking form on website) 34.0% By phone (telephone, call centre) 20.6%Electronic (IDS, real-time bookings on website, GDS, CRS, 26.4% social media) Tourism partners (tour operators, travel agencies, tourism organizations, conference & event organizers, others 12.5% subdivided)31
  • 32. Evolution of Booking Channels in Swiss Hotels 2002-2011 0.0% 10.0% 20.0% 30.0% 40.0% 50.0%Traditional distribution (telephone, fax, letters, walk-ins) 29.6% E-mail 23.4% Internet distribution systems (IDS) 16.4% Booking form & real-time booking on hotel website 13.8% Tourism organizations 2002 (n=202) 4.9% Tour operators & travel agencies 2005 (n=94) 4.7% 2006 (n=100) Conference & event organizers 2.2% 2008 (n=184) Global distribution systems (GDS) 2.1% 2009 (n=198) Hotel chains with CRS 2010 (n=211) 1.5% Other channels 2011 (n=196) 1.4% Social media 32 0.1%
  • 33. Evolution of Booking Channels in Swiss Hotels 2006-2011 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%Traditional distribution (telephone, fax, letters, walk-ins) 29.6% E-mail 23.4% Internet Distribution Systems (IDS) 16.4% Reservation form (Website hotel) 7.5% Real-time booking (Website hotel) 2006 (n=100) 6.3% Tourism organisations 4.9% 2008 (n=184) Tour operators / travel agencies 4.7% 2009 (n=198) Event & conference organizers 2.2% Global distribution systems (GDS) 2010 (n=211) 2.1% Hotel chains with CRS 2011 (n=196) 1.5% Other channels 1.4% 33 Social media 0.1%
  • 34. Distribution Trends in the Swiss Hospitality Sector 2002-2011 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Traditional distribution (telephone, fax, letters, walk-ins, others) Electronic request (e-mail, booking form) 2002 (n=202) Online booking (GDS, IDS/OTA, direct booking on hotel website, hotel chains with CRS, social media) 2005 (n=94) 2006 (n=100) 2008 (n=184) 2009 (n=198)Tourism partners (tour operators, DMO national-local, event & conference organizers, others) 2010 (n=211) 2011 (n=196)34
  • 35. Distribution Trends in the Swiss Hospitality Sector 2002-2011 2011 (n=196) 2010 (n=211) 2009 (n=198) 2008 (n=184) 2006 (n=100) 2005 (n=94) 2002 (n=202) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Direct distribution (hotel-customer) Indirect distribution (hotel-intermediary-customer)35
  • 36. Synthesis D-A-CH36
  • 37. Synthesis D-A-CH: Booking Channels Telephone Internet distribution systems (IDS) E-mail Booking form on own website Real-time booking on own hotel website Tour operators / travel agencies Walk-ins Switzerland Letters /fax Austria Global distribution systems (GDS) Germany Local and regional tourism organizations / associations Event & conference organizers Hotel chains and affiliations with CRS Other distribution channels National tourism organizations Social media37 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% The values for Germany represent weighted means between the values of the individual and the chain hotels.
  • 38. Synthesis D-A-CH: Types of Booking 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% Personal (walk-ins, others subdivided) Written (fax, letters, e-mails, booking form on website) By phone (telephone, call centre) Germany AustriaElectronic (IDS, real-time bookings on website, GDS, CRS, social media) Switzerland Tourism partners (tour operators, travel agencies, tourism organizations, conference & event organizers, others subdivided) The values for Germany represent weighted means between the 38 values of the individual and the chain hotels.
  • 39. Observations on Booking Channels D-A-CH (1)• Direct booking channels (telephone, fax, walk-ins, e-mail, form or booking engine on own website) are still the dominant sales tools for the hotels (67.7%) in Germany, Austria and Switzerland (D-A-CH), although their proportion in the distribution mix has been steadily decreasing in the last years. 10 years ago their proportion was about three quarters of all bookings.• The trends towards online booking channels is unbroken. The channel with the highest growth rates are the Internet Distribution Systems (IDS) which could multiply their market share within the last 5 years.• On average 18.9% of the bookings in the D-A-CH region are realized through IDS. The proportion in Germany (19.5%) exceeds those of Switzerland (16.4%) and Austria (12.6%).• About one quarter of all enterprises generate more than 30% of all sales through IDS whereas 18% of the hotels get between 20 and 30% of the bookings through this channel.39
  • 40. Observations booking Channels D-A-CH (2)• The market share of the tourism organizations has been stagnant resp. slightly declining over the last years and is currently fluctuating at 3.3% of all bookings. In Switzerland the market share of the DMO is clearly higher with an average of 4.9%, but the overall trend is also negative (in 2006 for example 6.5% of all bookings in Swiss hotels were realized through DMO).40
  • 41. Table of Contents • Executive Summary • Background of the Study • Booking Channels • IDS (Internet Distribution Systems) • Costs of the Distribution • Selection Criteria for IDS • New Forms of Distribution • Channel Manager41
  • 42. D-A-CH: Market Shares of Internet Distribution Systems (OTA) 0% 10% 20% 30% 40% Booking.com 35% HRS 28% Hotel.de 13% other platforms 12% Expedia 3% Venere 2% Tiscover 1% Hotels.com 1% Bergfex 1% Unister (ab-in-den-urlaub.de, hotelreservierung.de, reise.de, etc.) 1% GHIX (Global Hotel Index) 1% eBay 1% lastminute.com 1% eBookers 1% Hotel.ch 0%42
  • 43. Comparison of the Market Shares of Internet Distribution Systems (OTA) by Countries Hotel.ch lastminute.com Switzerland eBookers eBay Austria Unister GHIX (Global Hotel Index) 3% Germany Hotels.com Bergfex 8% Tiscover 9% Venere Expedia 5% 4% other platforms Hotel.de 4% 6% 16% HRS 9% 11% 34% Booking.com 52% 43% 29% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%43 The values for Germany represent weighted means between the values of the individual and the chain hotels.
  • 44. Comparison of the Market Shares of Internet Distribution Systems in Germany 2011 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% HRS 34.4% Hotel.de 15.8% Tiscover 0.4% Booking.com 28.5% Expedia 4.1% Venere 1.4% Hotels.com 2.1% Unister 1.2% lastminute.com 1.1% HRS 50.6% Hotel.de eBay 0.5% Tiscover 28.5% Booking.com eBookers 0.5% Expedia 7.7% Venere other platforms 9.9% Hotels.com44 The values for Germany represent weighted means between the values of the individual and the chain hotels.
  • 45. Comparison of the Market Shares of Internet Distribution Systems in Austria 2011 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% HRS 11.2% Hotel.de 5.6% Tiscover 9.1% Booking.com 42.6% Expedia 3.5% Venere 3.1% Hotels.com 0.8% Bergfex 7.9% Unister 0.6% HRS 25.9% Hotel.de eBay 1.1% Tiscover 42.6% Booking.com GHIX (Global Hotel Index) 0.6% Expedia 7.4% Venere other platforms 13.9% Hotels.com45
  • 46. Comparison of the Market Shares of Internet Distribution Systems in Switzerland 2011 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% HRS 9.4% Hotel.de 3.9% Tiscover 0.4% Booking.com 52.3% Expedia 4.9% Venere 2.5% Hotels.com 1.1% Bergfex 1.3% GHIX (Global Hotel Index) 3.3% HRS 13.7% Hotel.de eBookers 1.3% Tiscover 52.3% Booking.com Hotel.ch 0.7% Expedia 8.5% Venere other platforms 19.0% Hotels.com46
  • 47. Observations on Internet Distribution Systems (IDS)• Booking.com , HRS and hotel.de are the most frequently used IDS in Germany, Austria and Switzerland.• Booking.com is dominant in Austria with 43% as well as in Switzerland with 53%.• In Germany, HRS with a market share of 34.4% is the clear leader. If you add the booking shares of hotel.de (15.8.5%) and Tiscover (0.4%) to it, HRS reaches 50.6% of the bookings realized through online booking platforms in Germany, followed by booking.com with 28.5%.• Expedia is a further important player, especially for business hotels, for 4-5 star hotels and for hotel chains.• The market share of booking.com is bigger in the leisure hotels (44%) than in the business hotels (28%), whereas for HRS it is quite the contrary (business hotels: 37% and leisure hotels: 18%) 47
  • 48. Table of Contents • Executive Summary • Background of the Study • Booking Channels • IDS (Internet Distribution Systems) • Costs of the Distribution • Selection Criteria for IDS • New Forms of Distribution • Channel Manager48
  • 49. Estimations of Revenues and Commission Costs• The estimations on the following slides are based on different hypotheses: • The calculations use the lodging revenues of the hospitality sector as well as on the hypothesis that the booking turnover can be distributed proportionally to the market shares of the survey channels. • The transposition of the figures of the sample to the hospitality sector is only valid to a certain extent. • A full cost calculation should also take into consideration the fixed costs of particular channels (staff), in addition to clearing costs or the costs of the PMS interface. The presented data/estimations show therefore only an order of magnitude!49
  • 50. D-A-CH: Estimation of Revenues and Commission Costs by Distribution Channel• In 2011 online booking channels (GDS, IDS, real-time booking on hotel website) generated a turnover of 7.6 billion Euros in the hospitality sector of the three countries.• The total amount of commissions paid to intermediaries by the hotels is almost 1.3 billion euros, thereof just under 800 million Euros for online booking channels.•• The online travel agencies (OTAs) with estimated 594 million Euros seem to profit most.50
  • 51. Germany: Estimation of Revenues and Commission Costs per Channel• In 2011 online booking channels (GDS, IDS, real-time booking on hotel website) generated a turnover of more than 5 billion Euros in the German hospitality sector.• The total amount of commissions paid to intermediaries by the hotels is more than 900 million Euros, thereof 575 million Euros for online booking channels.• The online travel agencies (OTAs) with estimated 421 million Euros seem to profit most.51
  • 52. Austria: Estimation of Revenues and Commission Costs per Channel• In 2011 online booking channels (GDS, IDS, real-time bookings on hotel website) in the Austrian hospitality sector generated a turnover of just under 1.3 billion Euros.• The total amount of commissions paid to intermediaries by the hotels is about 251 million Euros, thereof 134 million Euros for online booking channels.• The online travel agencies (OTAs) with estimated 101 million Euros seem to profit most.52
  • 53. Switzerland: Estimation of Revenues and Commission Costs per Channel• In 2011 online booking channels (GDS, IDS, real-time bookings on hotel website) in the Swiss hospitality sector generated a turnover of more than one billion Swiss francs (1’061 millions).• The total amount of commissions paid to intermediaries by the hotels is almost 178 million Swiss francs, thereof just under 110 million Swiss francs for online booking channels.• The online travel agencies (OTAs) with estimated 85 million Swiss francs seem to profit most.53
  • 54. Table of Contents • Executive Summary • Background of the Study • Booking Channels • IDS (Internet Distribution Systems) • Costs of the Distribution • Selection Criteria for IDS • New Forms of Distribution • Channel Manager54
  • 55. What are your Selection Criteria for Online Travel Agencies (OTA) resp. Internet Distribution Systems (IDS)? Relevance of IDS as sales channel (booking volume) Marketing power of IDS / market presence Relevance of IDS for targeted customer segments not important at all Costs (charges and commissions) hotel presentation and information (pictures, not important vidéos, texts, maps) Data administration / user-friendliness of extranet neutral Booking technology and features Additional benefit for the guest (e.g. traveller important reviews) Administrative aspects (e.g. p. ex. accounting) very important User support (e.g. hotline, statistical analysis, etc.)Automatic exchange of data with hotel software Other selection criteria 55 0% 20% 40% 60% 80% 100%
  • 56. Selection Criteria for Internet Distribution Systems (IDS)• The main criteria for choosing an adequate Internet distribution system are its sales strength, that means the hotels are looking for players with high booking volumes, strong marketing activities and which are popular for the customers in the target markets (important to very important for 90%).• The costs are also relevant (important to very important for about 80%), but not decisive for the decision-making process.• Other relevant criteria are connected to the data administration and the possibilities of presentation of the hotel, as well as to the quality of the booking technology of the IDS.56
  • 57. Table of Contents • Executive Summary • Background of the Study • Booking Channels • IDS (Internet Distribution Systems) • Costs of the Distribution • Selection Criteria for IDS • New Forms of Distribution • Channel Manager57
  • 58. Use of new Distribution Forms: Deal Offers Do you use deal offers of online portals (e.g. Groupon, DailyDeal, etc.)? 18% No Yes 82% The experiences of current users of deal offers mostly proved to be positive. For hotels not using such offers currently respectively having used them in the past their58 experiences rather proved to be negative.
  • 59. New Forms of Distribution: Important Providers of Deal Offers Anz 10,1%HRS "Hot Deal" 104 4,0%booking.com 41 2,4%Groupon 25 1,8%Hotel.de 19 1,5%HolidayCheck 15 0,9%Dein Deal 9 0,5%DailyDeal 5 0,4%Venere 4 0,3%eboutic.ch 3 0,3%Expedia 3All in all 37 different providers of deal offers were mentioned. The correspondingoffers of the leading internet distribution systems such as HRS and booking.com aremostly used.59
  • 60. New Forms of Distribution: Do you use mobile Distribution Channels? Yes, our own mobile booking app 81 No Yes, a mobile hotel website 214 Yes, a mobile hotel website Yes, our own mobile booking app No 696 0 100 200 300 400 500 600 700 80060
  • 61. D-A-CH: Use of new Media (ICT)* Own hotel-specific app Own YouTube channel Website adapted for smartphones Switzerland Austria Germany Real-time booking system on own website Facebook account Own website*information and communication technology 0% 20% 40% 60% 80% 100%61
  • 62. Use of new Forms of Distribution• New distribution forms such as the deal offers of the internet distribution systems are only used by a minority of the hotels (<20%). The experiences of current users mostly proved to be positive, whereas the non-users were considerably sceptical.• The market leader of the deal offers are HRS and booking.com, which can be explained by their strong position in the online market. Further frequently mentioned offers are: DailyDeal, Groupon• Just under one third of the enterprises uses mobile forms of distribution. More frequently they use websites, which are adapted to mobile end devices (e.g. iPhone), than a specific app.• Hotels, having invested in those new possibilities of distribution, have the following characteristics: 4-5 star hotels, hotel chains, big hotels.62
  • 63. Table of Contents • Executive Summary • Background of the Study • Booking Channels • IDS (Internet Distribution Systems) • Costs of the Distribution • Selection Criteria for IDS • New Forms of Distribution • Channel Manager63
  • 64. D-A-CH: Channel ManagerHow do you manage your rates and availabilities on the internet booking platforms? Others Through an agency With the hotel software or the booking system (CRS interface) With a software solution, simultanously for several platforms (Channel Manager) Manually on the corresponding online platform 0% 10% 20% 30% 40% 50% 60% 70%64
  • 65. Channel Manager• Two third of the questioned hotels managed their rates and availabilities manually on the internet booking platform.• There is an above-average use of channel managers in 4-5 star hotels, hotel chains, business hotels as well as urban hotels.65
  • 66. ContactRoland Schegg & Michael FuxUniversity of Applied Sciences of Western Switzerland Valais (HES-SO Valais)Institute of Tourism (ITO)Professors at the Swiss School of Tourism, SierreTechnoPôle 3CH-3960 SierreSwitzerlandTel. 0041 (0)27 606 90 04roland.schegg@hevs.ch / michael.fux@hevs.chwww.hevs.ch / www.etourism-monitor.chBachelor of Science HES-SO in Tourism at the Swiss School of Tourism inSierre (http://tourismus.hevs.ch) 66