Distribution Channels in the Swiss Hotel Industry 2009

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Sales on online channels grew in Swiss hospitality despite economic downturn in 2009

According our survey many Swiss hotels worked with Internet distribution systems (IDS) during the economic crises trying to gain new customers and to compensate for foreseen losses. This explains the increase of market shares of such platforms. Nevertheless direct booking channels of the hotels are still dominant sales’ forces.

A rough estimation of online sales in the Swiss hotel sector based on data from our survey results in an overall turnover of probably more than 800 Million CHF in 2009 and commission costs of some 80 Million CHF. IDS have significantly increased their market share, from 5.7% in 2008 to 10.6% in 2009. This is probably due to a more active online distribution sales strategy during the economic crises.
Direct booking channels as dominant sales forces
Despite the growth of the IDS, direct booking channels such as telephone, fax, walk-ins, e-mail, Web form on the own website are still dominant for Swiss hotels. The share of these direct bookings decreased between 2008 and 2009 from 75,4 percent to 71,1 percent. On average more than half of all bookings (52,7%) are mediated through electronic channels. 26% of hotels have an own real-time booking system with a direct link to the hotel software (PMS) on their website, but Swiss hotels realize on average only 4.4% of all sales through this channel. Booking.com, Hotel Reservation System (HRS), Switzerland Travel Centre (STC) and destination management systems of local destinations are the most frequently used IDS in the Swiss hospitality sector. On average a Swiss hotels uses 5 IDS channels.

Since 2003 the University of Applied Sciences of Western Switzerland Valais (www.hevs.ch) in collaboration with the Swiss Hotel Association (www.hotelleriesuisse.ch) has conducted regularly surveys in order to monitor the evolution of sales in the different distribution channels. An online questionnaire was sent to over 2’300 members of hotelleriesuisse in January and March 2010 and resulted in 224 valid responses.

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Distribution Channels in the Swiss Hotel Industry 2009

  1. 1. Distribution Channels in Swiss Hotels Sales in Online Channels Grew in the Swiss Hospitality Sector Despite Economic Downturn in 2009 Results of an online survey among members of the Swiss Hotel Association (hotelleriesuisse) Roland Schegg, Michael Fux and Thomas Allemann roland.schegg@hevs.ch / michael.fux@hevs.ch / thomas.allemann@hotelleriesuisse.ch April 2010 1
  2. 2. The Study • Objective: Monitoring of booking trends on different distribution channels in the Swiss hospitality sector sector. • Research instrument: online survey • Administration: Over 2300 hotels have been contacted in January 2010 by e-mail, all members of the Swiss Hotel Association (hotelleriesuisse). Relaunch of the survey in March 2010. • Response rate: 224 replies ~10 percent 10 • Similar studies have been conducted already in the past: 2003, 2005, 2007, 2009 2
  3. 3. Content • Executive Summary • Distribution channels in Swiss hotels • Internet Distribution Systems (IDS) used • Management tools in distribution 3
  4. 4. Content • Executive Summary • Distribution channels in Swiss hotels • Internet Distribution Systems (IDS) used • Management tools in distribution 4
  5. 5. Executive Summary (I) • Direct booking channels (telephone, fax, walk-ins, e-mail, Web form) are still dominant for Swiss hotels with 71 1 percent of overall bookings (2008: 75 4%) 71,1 75,4%) hoteliers have large control over distribution. • O average more than half of all b ki On th h lf f ll bookings (52 7%) are mediated th (52,7%) di t d throughh electronic channels (e-mail, Web form, real-time booking, Global Distribution Systems (GDS) and Internet Distribution Systems (IDS)). 50 percent of them are mediated through e mail e-mail. • 26 percent of hotels have a real-time booking system on their own website, but realize on 4,4 percent of all sales through this channel. Real-time booking channels have a market share of 17 percent (booking engine on own Website 4,4%, GDS 2% and IDS 10,6%), an increase of 5 percent compared to 2008. 5
  6. 6. Executive Summary (II) • One out of five hotels uses a channel manager to manage the different online channels. channels Nearly 80 percent of hotels in the survey spend less than 5 hours a week for the management of the online distribution channels. A channel manager is a system which supports the hotels in the management of room availabilities and rates in the different online distribution channels. • Internet Distribution Systems (IDS) have significantly increased their market share, from 5,7 percent in 2008 to 10,7 percent in 2009. This is probably due to a more active online distribution sales strategy during the economic crises when hotels tried to compensate for foreseen losses losses. 6
  7. 7. Executive Summary (III) • Booking.com, Hotel Reservation System (HRS), Switzerland Travel Centre (STC) and destination management systems of local destinations are the most frequently used IDS in the Swiss hospitality sector. On average a Swiss hotels uses 5 IDS channels. • The Top 5 IDS (Booking.com, HRS, hotel.de, Expedia resp. hotels.com, Venere) could increase their market share by 16 percent on average compared to 2008. • A rough estimation of real online sales in the Swiss hotel sector based on data from our survey results in an overall turnover of probably more than 800 Million CHF in 2009 and commission costs of some 80 Million CHF (out of 160 Mio in total). 7
  8. 8. Content • Executive Summary • Distribution channels in Swiss hotels • Internet Distribution Systems (IDS) used • Management tools in distribution 8
  9. 9. Shares of booking channels 2002-2009 Global Distribution 2009 (n=198) Systems (GDS) 2008 (n=184) Industry/trade associations y 2006 (n=100) (n 100) 2005 (n=94) Event/conference organizer 2002 (n=202) Chains and affiliations Local/regional/national tourism organisation Tour operator Travel agency Internet Distribution Systems (IDS) Own Website (form and realtime booking) E-mail Traditional channels (telephone, fax, letter) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 9
  10. 10. Booking channels in Swiss hotels in 2009 Switzerland Valais Graubünden Share of channel in % (n=198) (n=43) (n=35) Telephone, fax, letter 25,0 20,0 25,6 Walk-ins W lk i 6,2 62 6,5 65 5,9 59 E-mail 27,4 31,5 32,5 Reservation form on hotel website 8,3 9,0 12,8 Real ti R l time booking on h t l website b ki hotel b it 4,4 44 3,5 35 2,8 28 Internet Distribution Systems (IDS) 10,6 9,8 6,1 Travel agency 3,8 5,1 4,1 Tour operator T t 3,6 36 8,0 80 2,4 24 Local tourism organisation 2,9 3,2 3,4 Regional tourism organisation 1,2 0,7 1,7 National t i N ti l tourism organisation i ti 1,0 10 0,5 05 1,8 18 Chains and affiliations 0,9 0,7 0,2 Event organizer 1,0 0,6 0,2 Conference organizer C f i 1,4 14 0,4 04 0,6 06 Industry/trade associations 0,2 <0,1 0,0 Global Distribution Systems (GDS) 2,0 0,4 <0,1 10
  11. 11. Booking options on own hotel website Real time booking without direct link to PMS* Real time booking with direct link to PMS* Booking request form on hotel website Booking request per e-mail No booking possibility on website 0% 10% 20% 30% 40% 50% 60% 70% 11 *P Property M t Management System (PMS) / F t Offi Software tS t Front Office S ft
  12. 12. Real time booking systems used by Swiss hotels 2009 2008 (n=164) (n=123) Number % on total Number % on total GHIX Superbooking 28 17% 12 10% STC (Switzerland Travel Center) 17 10% 17 14% GlobRes (Global Reservation Agent) 14 9% 18 15% Reconline 14 9% 7 6% Booking.com Booking com 13 8% 3 2% Protel (rebagdata) 11 7% 9 7% Bookingsystem.ch ( g y (Infonautics) ) 7 4% 8 7% Fidelio (myfidelio.net) 7 4% 7 6% Synergy Booking Engine (ActiveMetrics) 5 3% 4 3% Other Systems 48 29% 38 2% 12
  13. 13. Content • Executive Summary • Distribution channels in Swiss hotels • Internet Distribution Systems (IDS) used • Management tools in distribution 13
  14. 14. Internet Distribution Systems used by Swiss hotels 2009 2008 More than one answers possible Number % on total Number % on total Booking.com 162 72,3% 120 57,7% Hotel R H t l Reservation S t ti System (HRS) 148 66,1% 66 1% 112 53,8% 53 8% myswitzerland.com / Switzerland Travel Centre (STC) 146 65,2% 133 63,9% Website of tourism organisation 124 55,4% 133 63,9% hotel.de 97 43,3% 15 7,2% Expedia and hotels.com 92 41,1% 65 31,3% Venere 85 37,9% 63 30,3% hotel.ch 66 29,5% 46 22,1% eBookers 50 22,3% 24 11,5% Travelocity 36 16,1% 30 14,4% Lastminute 33 14,7% 22 10,6% eBay 26 11,6% 4 1,9% Tiscover 24 , 10,7% 21 10,1% , Global Hotel Index (GHIX) 22 9,8% 24 11,5% Hotelguide.com 20 8,9% 19 9,1% Opodo 20 8,9% 17 8,2% TOMAS 20 8,9% 8 9% 1 0,4% 0 4% HostelBookers 15 6,7% 4 1,9% Rates to go 3 1,4% 3 1,4% Others 56 25,0% 50 24,0% 14 Fett F tt markierte Pl ttf ki t Plattformen konnten 2009 im Vergleich zu 2008 ein W h t k t i V l i h i Wachstum von mehr als 5 P h l Prozent verzeichnen. t i h
  15. 15. Number of Internet Distribution Systems channels used by a hotel 35 Mean = 5,9 / Median = 5,0 / Min. = 1,0 / Max. = 15,0 30 25 mber of hotels 20 15 Num 10 5 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Number of IDS used by a hotel 15
  16. 16. Content • Executive Summary • Distribution channels in Swiss hotels • Internet Distribution Systems (IDS) used • Management tools in distribution 16
  17. 17. Use of a channel manager for online distribution 12% 18% • A channel manager is a system which supports the hotels in the manage- ment of room availabilities and rates in the different online distribution channels. 70% Yes No I don’t know 17
  18. 18. Average time spent for the management of online distribution channels Time spent per week 2%3% 7% • Mean = 4,4 hours 14% 31% • Median = 2,0 hours • Min. = 0 hours • Max. Max = 140 hours 43% no time spent less than 2h from 2h to 5h from 5h to 10h from 10 to 20h 20h and more 18
  19. 19. Importance of Yield Management 12% 20% 25% 11% 17% 15% Yes, we use it already , y Yes, very important , y p Yes, important Interesting No issue for my property I don't know 19
  20. 20. Contact Roland Schegg University of Applied Sciences of Western Switzerland Valais (HES-SO Valais Wallis), Institute of Tourism TechnoArk T h Ak3 3960 Sierre (Switzerland) Tel. +41 (0)27 606 90 04 roland.schegg@hevs.ch iet.hevs.ch / www.hevs.ch / www.est-stf.ch Bachelor of Science HES-SO in Tourism MBA Major in Tourism & Hotel Management Thomas Allemann hotelleriesuisse (Swiss Hotel Association) Monbijoustrasse 130 3001 Berne (Switzerland) Tel. Tel +41 (0)31 370 43 36 thomas.allemann@hotelleriesuisse.ch www.hotelleriesuisse.ch 20

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