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Hotel website conversions dropped substantially in 2010

February 25, 2011 |

Hotel chains and airline websites lost ground versus online travel agencies in the first half of 2010, according to a new PhoCusWright report. Hotel websites generally commanded 67-72% of monthly online hotel bookings in 2008-2009. In 2Q10, however, hotel website share dropped substantially to 57-69%.

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 2Q08 to 10 percent in 2Q10. In contrast, OTA conversion for air grew from 7 percent in 2Q08 to 8 percent in 2Q10.

"The drop in conversion rates among airline and hotel websites was likely the result of supplier-driven price increases," said Carroll Rheem, director of research at PhoCusWright. "The return of corporate travel prompted suppliers to raise rates, but it appears that leisure consumers were not so ready to pay those higher prices, and online travel agencies reaped the benefits of their sensitivity."

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.

Get the full story at Travel Agent Central

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