Hotels Become Largest Segment of U.S. Travel Market

by Jason Q. Freed, Managing Editor | January 25, 2016

A look back at last week’s top hotel headlines and how they will impact your revenue strategy.

1. 2015 hotel revenues top all travel segments
If you work in a hotel in the U.S., you're now part of the largest segment of the country's travel industry. New research from Phocuswright shows lodging revenue increased 8% in 2015 to $144 billion, pushing past air to become the largest segment of the U.S. travel market. The study also showed that OTAs will account for 17% of total U.S. travel bookings in 2017, up from 16% in 2014. Full story at Travel Weekly.

2. Full-time Airbnb hosts are killing hotel business
A new study from Penn State and AH&LA confirms it's not the occasional Airbnb host that's posing a major risk to the hotel industry; it's those people who make Airbnb their full-time job, renting multiple units, often in multiple properties. The study supports the argument that these people are running illegal hotels. Full story at Skift.

3. The case for joining TripAdvisor's Instant Booking
TripAdvisor's Instant Booking service has been the subject of vast discussion during the past year. As the platform has gained participants, other hoteliers have pondered whether or not to sign up. Pablo Delgado of Mirai says hotels have little choice. Full story at Tnooz.

Despite what the companies are touting, neither TripAdvisor Instant Booking nor Book on Google are direct channels and in fact more closely resemble OTAs, according to a few members of HSMAI’s Digital Marketing Council.

4. Double-check your cancellation policy on Booking.com
Booking.com has identified what it calls a "small bug" in a system update that resulted in a number of properties experiencing changes to their prepayment and cancellation policies without warning. Some hoteliers said they experienced “no deposit and free cancellation,” despite their policies not stating that. Full story at Hotel Owner.

5. Do OTAs hinder growth of hotel loyalty?
The ability to book hotels online, and with OTAs in particular, are making it more difficult for hotel companies to grow their loyalty club membership rolls. OTA consolidation means new mega distribution partners have access to much more inventory and can improve their own loyalty offerings. And the rising popularity of independent hotels and peer-to-peer rentals are eating away at consumers’ loyalty to big hotel brands as well. Full story at The New York Times.

Loyalty is big business for hotels, and they certainly aren’t planning to give up the fight, according to this Duetto blog post.

6. What to do about falling conversion rates
Data and lots of it can be your friend, especially when analyzing why your marketing campaigns might be leading to falling conversion rates for reservations. The author pinpoints four causes of slipping conversions and what to do about it. Full story at Tnooz.

7. Blog your way to increased direct bookings
The best way to increase direct hotel bookings is through blogging. With SEO management becoming tricky and less effective and OTA commissions on the rise, a strong blogging campaign can lead to more direct reservations. Full story at HospitalityNet.

8. A consumer’s look at 'best-rate' guarantees
USA Today takes a stab at explaining something even few people in the hotel industry fully understand: chains’ so-called best-rate guarantee. While hotels and hotel companies need to protect their rate structures and bottom lines, stories like this can give the industry a reputation for deception and unfriendliness. Full story at USA Today.

9. Netflix CEO: Start with data but trust your gut
Netflix CEO Reed Hastings’ latest comments can be food for thought for hotel revenue strategists. At a recent tech meeting, he explained his company's approach to decision-making, in this case what programming to offer. "We start with the data,” he said. “But the final call is always gut. It’s informed intuition.” Full story at Read Write.

10. Changing patterns in outbound Chinese tourism
Despite its shaky economy, China is still a hotbed for outbound international travel. But, according to a new study, trends in Chinese travel are changing. Hong Kong, the long-time favored destination for Chinese tourists, slipped to third place in 2015. Demographics of the Chinese traveler are changing, too. Full story at Hotel Marketing.

Stay up on revenue strategy news and discuss industry tech trends in the Hotel Revenue Strategy Leaders Group on LinkedIn.

RELATED ARTICLES

Jason Q. Freed, Managing Editor

Jason joined Duetto as Managing Editor in June 2015 after reporting, writing and editing hotel industry news for a decade at both print and online publications. He’s passionate about content marketing and hotel technology, which leads to unique perspectives on hotel distribution and revenue management best practices.

    Sign up for Duetto Digest, a weekly newsletter featuring our top content every Friday.

    TWITTER

    The Ultimate Guide to Hotel Revenue Strategy

    Free eBook: The Ultimate Guide to
    Hotel Revenue Strategy