As the use of the Internet has grown, so has the expansion of online channels.
This has, in turn, led to more hotel bookings through online travel agents (OTAs) such as Expedia.com and official hotel websites, according to the TravelClick North American Distribution Review (NADR).
For the third quarter of 2013, the NADR monitored over 3,700 hotels across 25 major North American markets, consisting of roughly 800,000 rooms, according to TravelClick executive vce president Tim Hart.
The review found that the OTA channel experienced a 13.6 percent increase in hotel bookings compared to last year, while hotel websites saw a 5.3 percent jump.
In terms of average daily rates (ADR), the OTA channel once again grew more than any other channel in the transient segment (8 percent jump).
"It's not breaking news," Hart said. "It's the extension of a storyline that has been developing for some time. The combined share of online channels has continued to grow at the expense of offline channels."
Offline channels include calls made directly to the property and walk-in customers (Hotel Direct), calls to the hotel's 800-number (CRO), and the Global Distribution System (GDS) used by travel agents.
Hart attributed the growth in online channels to a variety of factors. OTAs are generally offering better discounts and package rates than other channels, which has understandably led to an uptick in hotel bookings from travelers. OTAs are able to do this because the channel they operate through is the least expensive channel per booking.
"It's the combination of consumers' behavior and hotel companies spending money on OTAs," Hart said.
Also, leisure travelers who aren't familiar with a certain area or haven't developed a strong rapport with a particular hotel yet tend to book online, if only for the convenience.
The cities that made up the greatest percentage of OTA bookings in the third quarter were (in order): Orlando (18.8 percent), New York City, San Diego and Miami, while Toronto and San Antonio tied for fifth at 16.6 percent.
This didn't surprise Hart, given they are leisure destinations.
Washington D.C. led all cities in bookings through hotel websites (31.6 percent share). This also didn't surprise Hart, considering the area puts a premium on advertising through these websites.
At the same time, Hart cautioned that this trend doesn't mean that hoteliers should throw all of their time and money at OTAs. Rather, the trend simply demonstrated that it is becoming more important to take the online channels into account.
"While it may be tempting for hoteliers to throw all resources towards online channels, offline channels still play a critical role in attracting important types of travelers, particularly high ADR business travelers, and should not be forgotten," Hart said.
Hart noted that approximately 60 percent of hotel bookings are still made through offline channels.
Online travel agent daily bookings in the fourth quarter of 2013 is currently on track for a 7.1 percent increase from last year.
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