Hotel chains and airline websites lost ground versus online travel agencies (OTAs) in the first half of 2010, according to a new report from the travel industry authority PhoCusWright Inc. conducted in partnership with Compete Inc. The supplier share of unique monthly hotel and air bookers declined, as online travel agencies benefited from price-conscious comparison shoppers.

            Hotel websites generally commanded 67 to 72 percent of monthly online hotel bookings in 2008-2009, with OTAs representing the balance at 28 to 33 percent. In the second quarter of 2010, however, hotel website share dropped substantially to 57 to 69 percent. A less dramatic shift to the online travel agency channel was also seen among air bookers.

            Both traffic and conversion played a roll in the share shift. Although supplier websites and OTAs attracted fewer visitors in the second quarter of 2010 versus 2009, supplier category visitors declined more than OTA shoppers. Supplier conversion rate losses played an even greater role.

            While supplier websites have historically been able to drive substantially higher conversion rates than OTAs across products, an overarching trend has appeared over the past few years -- OTA conversion has improved while supplier conversion has declined. For example, airline website conversion dropped from 12 percent in the second quarter of 2008 to 10 percent in the second quarter of 2010. In contrast, OTA conversion for air grew from 7 percent in the second quarter of 2008 to 8 percent in the second quarter of 2010. Although 2010 brought increased revenue across airline and hotel products, traffic to most transactional categories declined. Traffic is expected to increase in 2011 as leisure travel rebounds, and suppliers will have to play a careful balancing act to regain lost share while raising prices. For more information, visit www.phocuswright.com.