|(From left) moderator Jason Q. Freed of HotelNewsNow.com; Ron Botts of Navis; Robert McDowell of Choice Hotels International; Nick Graham of Expedia; and David Sjolander of Pegasus Solutions.
NASHVILLE—Finding the optimal channel distribution mix for hotels has proved to be an ever-moving target for hoteliers. During the first day of the Hotel Data Conference, experts from several distribution models made the case for their respective channels.
Wednesday afternoon’s general session featured experts representing such channels as voice, optimized website/mobile app and online travel agency. Each discussed the evolving distribution landscape and how hoteliers can best leverage each channel’s advantages.
Perhaps the most hotly debated of the channels, OTAs took up a significant amount of time during the 90-minute session. Referencing data provided by TravelClick, panel moderator and News Editor of HotelNewsNow.com, Jason Q. Freed, pointed out that OTAs generate 12.8% of hotel demand, below direct (24.3%) and the global distribution system (20.2%).
Further, Expedia collected $3.5 billion from the hotel industry on a trailing 12-month basis.
Nick Graham, senior director of market management at Expedia, said the mobile space is growing quickly and it is an area into which Expedia has invested. “Mobile is now driving a substantial portion of our (global) business,” he said.
He added later: “The international customer is doing a lot on mobile. China, they’re not using the desktop. Two-thirds of mobile bookings are done same day.”
Graham also briefly addressed the company’s recent decision to introduce the Expedia Traveler Preference Program. The “preliminary program” allows consumers the option of paying at the hotel after booking a stay on Expedia or paying when the stay is booked online with the OTA.
“It’s not an agency model. It’s a choice model,” Graham said.
Reception among hotels has thus far been “very positive,” he added.
Robert McDowell, senior VP global distribution for Choice Hotels International, said his company has been in discussions with Expedia about the program.
“We’re trying to figure out the best economic vehicle to keep (franchisees) whole with this model change from Expedia,” he said.
McDowell also updated the status of Roomkey.com, the hotel industry’s answer to OTAs, such as Expedia.
“We continue to grow and (get) traction,” he said. “Choice is very happy with the results so far and optimistic about the future … The future looks very bright.”
Expedia’s Graham said of Roomkey.com: “It is a way of getting into OTAs, and it shows the value of giving the customer a selection of hotels.”
David Sjolander, VP of product management/distribution services with Pegasus Solutions, said the display that appears that redirects a consumer to Roomkey.com when a customer leaves Brand.com is a key difference-maker for the site.
He said it’s difficult for Roomkey.com to match the marketing muscle of OTAs, but the “pop under” is an innovative way to attract eyeballs.
Panelists also discussed the ever-growing travel power that is Google.
“They are moving at a pace that most of us aren’t used to,” Sjolander said.
Sjolander said hoteliers have to be careful when working with Google, and they need to take time to ensure the search engine will truly help boost results.
“You can’t just turn it on and hope for the best,” he said.
McDowell was largely mum on Google. “I’ll reserve comment until I see what they do with Hotel Price Ads. I don’t want to drive … costs up for franchisees.”
Optimized website/mobile app
One area of debate among hoteliers is whether to focus on an optimized booking website, a mobile app or a combination of the two. McDowell said Choice has been putting a lot of attention on its mobile app presence.
The presence of a mobile app can boost brand awareness, McDowell said.
“As we evolve this channel, as the channel grows, the app was an easy decision,” he said, adding it’s important to have a mix of both optimized website and app.
Graham said Expedia also has been putting its efforts into both app and website as different customers use each channel. “Loyal and repeat customers use apps,” he said.
On the other hand, an optimized website is a good way to capture first-time customers, Graham said.
Ron Botts, national system consultant with Navis, said the voice channel is unjustly unloved by much of the industry.
“The voice channel is probably the least sexy of the distribution channels,” he said. “I think it is the least talked about; the channel least appreciated.”
But there is a great deal of value in the channel, Botts said. “There is an offline world and people are responding.”
For one, Botts said length of stay for the voice channel is up a half day while the booking window has grown by 6.4 days.
Choice’s McDowell, however, disagreed with Botts’ opinion of the voice channel.
“We continue to see the voice channel decline.”