as other hotel distribution fees rise, DHISCO represents less than 1% of booking costs

Two new studies previewed last month at the Revenue Strategy Summit in Washington show some interesting trends in the hotel booking channel. They also underscore the value DHISCO offers to both hotels and online travel agencies as they work to reduce their costs.

One suggests that the so-called “billboard effect” from hotels ads placed on online travel agency websites no longer drives consumers away from OTAs and onto the sponsoring hotel company sites.

The other shows OTAs continue to increase their share of room revenue, driving up hotels’ customer acquisition costs while driving down profitability.

But here is a point that is important to note: in aggregate, DHISCO represents less than 1 percent of the booking cost, and our systems link more than 100,000 hotels through more than 200 chains to OTAs and other intermediaries around the globe. We believe that’s a small price to pay for a connection to the world.

A study into how consumers book hotels online was conducted by P.K. Kannon, marketing department chair at the University of Maryland’s Robert H. Smith School of Business, for the American Hotel & Lodging Association’s Consumer Innovation Forum.

The study won’t be released until later this year, but he previewed the findings at the summit.

Using data from 50,000 online travel shoppers in 2014, Kannon says he found that users who browsed hotel sites tended to ultimately book through OTAs, according to a report on the summit by Tnooz. And users who began browsing on OTAs also booked there.

That indicates a shift in behavior since 2009 and 2011 when Cornell University found that hotel chain ads on OTA sites drove up direct bookings by as much as 26 percent.

The second study is being conducted by Kalibri Labs. Rebecca Bunis, Kalibri executive vice president and chief commercial officer, previewed those findings.

As reported by Hotel News Now, Bunis said Kalibri’s research shows OTAs’ share of room revenue increased 108 percent for economy and midscale hotels from 2011 to 2104. It was up 52 percent for upper-midscale and upscale hotels and 33 percent for upper-upscale and luxury properties.

Like the rest of the industry, we here at DHISCO will be interested to see the final analyses of both studies. And we look forward to continuing work with both our hotel and OTA partners to develop products that will boost their businesses and reduce their costs.

– CEO Toni Portmann