Published: 05 Jun 2008 on EyeforTravel
Supplier websites garnered 72% of the total online hotel spend during the first quarter of 2008, a 3-percentage point increase in dollar share from the previous year, according to comScore, Inc.'s study of the online travel industry.
Hotel market share through online travel agency sites such as Expedia and Orbitz is now 28%, 3-percentage points down from a year ago, as per the study.
A release stated that the increase in dollar share among supplier sites is being driven by several economy brands, such as Best Western (up 1.2 points) and Choice Hotels (up 0.6 points). Marriott, which includes both economy and premium brands, experienced the most significant increase of 1.3 points. Meanwhile, online travel agency sites lost dollar share as consumers booked directly on the supplier sites.
"The current economy has many consumers and business travelers tightening their belts, and the travel industry is certainly feeling the impact," said Kevin Levitt, comScore vice president. "Customers are becoming more cost-conscious, seeking modestly priced alternatives for their hotel stays."
Given the current economic conditions, some hotel groups are shifting their online ad dollars away from premium brands.
The company cited the example of the Intercontinental Hotels Group, which owns both premium and economy brands. Its economy brand, Holiday Inn Express, increased its total number of paid search link exposures by 16%, while its premium brands, like Crowne Plaza (down 41%) and Intercontinental (down 26%), reduced exposures.
"With consumers shifting their spending toward lower-cost alternatives, it makes sense that marketers would be shifting their ad spending accordingly to achieve better marketing ROI," said Levitt.