November 20, 2012

Travel suppliers widen share of online sales

Travel suppliers such as hotels and airlines are gaining greater sales control of a decelerating online U.S. travel industry, while mobile-device booking is accelerating at a rate reminiscent of the early days of the Internet.

As for hotels, the progression toward supplier control over online bookings has been more gradual, inching up from 55% in 2010 to a projected 59% in 2014. Such control has been a major issue for the U.S. lodging industry, which largely depended on OTAs to help boost sales a decade ago in the wake of the 9/11 terrorist attacks, but which is chafing at the relatively high distribution costs associated with sales through OTAs.

“It seemed that in 2011 and early 2012, hotels would take back online distribution from the OTAs,” wrote Lorraine Sileo, vice president, research, in the report. “But the recovery sputtered, and although hotels have enjoyed solid gains, they are in no position to dismiss a channel that represents 14% of their total sales.”

Suppliers and OTAs are wrestling for greater control over an online travel market that’s expanded rapidly as the U.S. economy has rebounded but whose growth is forecast to slow substantially as the online industry matures and questions remain over the U.S. and Chinese economies and on the European debt crisis.

Get the full story at Travel Weekly