Distribution Channels in Swiss Hotels: Online Travel Agencies Gain More Market Shares in 2010Agencies Gain More Market Shares in 2010

Results of an Online Survey Among Members of the Swiss Hotel Association (h t ll i i ) i J 2011(hotelleriesuisse) in January 2011

Roland Schegg, Michael Fux et Thomas Allemannroland.schegg@hevs.ch / michael.fux@hevs.ch / thomas.allemann@hotelleriesuisse.ch

February 2011

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Executive Summary (I)

• Direct booking channels (telephone, fax, walk-ins, e-mail, Web form) are still dominant for Swiss hotels with 71.1% of overall bookings (2008: 75.4%) -> hoteliers have large control over distribution.have large control over distribution.

• On average more than half of all bookings (55.9%) are mediated through electronic channels (e-mail, Web form, real-time booking, GDS & IDS), whereas real-time booking channels with availability check and credit card payment have a marketbooking channels with availability check and credit card payment have a market share of nearly 20% (booking engine on own Website 4.9% + GDS 1,4% & IDS 13.6%), an increase of 7,8% compared to 2008.

S l t diti l h l (30 2%) lik t l h l tt f d th h• Sales on traditional channels (30,2%) like telephone, letter or fax and through tourism organizations (6,2%) tend to decrease respectively to be stagnant.

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Executive Summary (II)

• Booking.com, HRS and destination management systems used by tourism organizations are the most frequently used OTA/IDS in the Swiss hospitality sector.

• Booking com has a penetration rate of 90% For 75% of the hotels this platform is an• Booking.com has a penetration rate of 90%. For 75% of the hotels this platform is an important to very important distribution channel and seems to have become the leader in online sales in the Swiss hospitality sector.

A h ti ti f li l i th S i h t l t b d d t f• A rough estimation of online sales in the Swiss hotel sector based on data from our survey results in an overall turnover of probably more than 850 Million CHF in 2010 and commission costs for online channels of some 90 Million CHF (out of 160 Mio in total)total).

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The Study

• Objective: Monitoring of booking trends on different distribution channels in the Swiss hospitality sector.

Research instrument: online survey• Research instrument: online survey

• Administration: Over 2000 hotels have been contacted in early January 2011 by e-mail, all members of the Swiss hotel association (hotelleriesuisse). Relaunch ( )of the survey end of January 2011.

• Response rate: 244 replies -> 12%

• Similar studies have been conducted already in the past: 2003, 2005, 2007, 2009 and 2010

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Distribution Channels in the Swiss Hospitality Sector 2006-20100.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

Telephone

Walk-ins

E-mail

Booking form on Website

Real-time booking on hotel website

IDS

GDS

Travel agencies2006 (n=100)2008 (n=184)

Tour operator

LTO

RTO

2008 (n=184)2009 (n=198)2010 (n=211)

NTO (STC)

Hotel association

Chain/affiliation

5

Chain/affiliation

Event organiser

Conference organiser

Facebook5 Facebook

Distribution Channels in the Swiss Hospitality Sector 2002-2010.0% 10.0% 20.0% 30.0% 40.0%

Tradit. channels (telephone, fax, letter, walk-in)

E-mail

Hotel website (form & realtime booking)

Internet Distribution Systems (IDS)

Global distribution system (GDS)

Travel agency

Tour Operator (TO)

2002 (n=202)

2005 (n=94)Tour Operator (TO)

Local tourism organisation (LTO)

Swiss Tourism (ST) & Regional tourism organisation (RTO)

2006 (n=100)

2008 (n=184)

2009 (n=198)organisation (RTO)

Industry association (e.g. hotelleriesuisse)

Hotel chain & affiliation

2010 (n=211)

6

Event organizer

Conference organizer

Facebook6 Facebook

Distribution Trends in the Swiss Hospitality Sector 2002-2010

Distribution through ICT (email, booking form on hotel website, real-

time booking hotel website GDS, OTA/IDS)

2010 (n=211)2009 (n=198)

Online real-time booking (GDS, OTA/IDS, real-time booking hotel

website)

2009 (n 198)2008 (n=184)2006 (n=100)2005 (n=94)

Distribution through tourism organisations (LTO RTO NTO)

2002 (n=202)

Direct distribution (customer-hotel: telephone, fax, letter, walk-ins,

organisations (LTO, RTO, NTO)

telephone, fax, letter, walk ins, booking form on website, real-time

booking hotel website)

7

Traditional distribution (telephone, fax, letter, walk-ins)

7 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Importance of Online Travel Agencies (OTA) used by Swiss Hotels% % % % % % % % % % %0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Booking.com

Website local tourism organisation

myswitzerland.com / STC

HRS (Hotel Reservation System)

Expedia und hotels.com

hotel de0=not used

hotel.de

other IDS

Venere

hotel.ch

1=not important for bookings

2hotel.ch

eBookers

GHIX (Global Hotel Index)

Lastminute

3

4

Travelocity

Hotelguide.com

Tiscover

5=very important for bookings

8

Opodo

HostelBookers

Rates to go

B8 eBay

Evolution of OTA use 2008-2010

HostelBookers

Rates to go

eBay

2008

Tiscover

Hotelguide.com

Opodo 2009

2010

Global Hotel Index (GHIX)

Lastminute

Travelocity

h t l d

Venere

hotel.ch

eBookers

Website NTO

HRS (Hotel Reservation System)

Expedia und hotels.com

hotel.de

9 0% 20% 40% 60% 80% 100%

Booking.com

Website LTO

Website NTO

9 0% 20% 40% 60% 80% 100%

Evaluation of booking.com by Swiss hotels (Source: Schegg & Fux 2010, n=275)

Booking com is a relevant distribution channel in

Booking.com is an easy booking tool for the customer

Booking.com is easy to handle for the hotelier (e.g. update of availabilities and rates)

Booking.com is a relevant distribution channel in international markets (brings bookings and visibility)

Booking.com has an efficient and professional marketing

Booking.com offers good features for describing the property on the platform (text, photos, links, etc.)

1=very poor23

B ki i l t di t ib ti h l i th

Booking.com manages the administrative processes in an easy and professional way

marketing 4567=very good

Booking.com has an advanced booking technology

Booking.com is a relevant distribution channel in the national market (brings bookings and visibility)

7 very good

10 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Booking.com offers good sales conditions (commission)

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Evaluation of Booking Systems of Tourism Organizations (DMS) by Swiss Hotels (Source: Schegg & Fux 2010, n=181)

The DMS offers good sales conditions (commission)

The DMS manages the administrative processes in an easy and professional way

The DMS is easy to handle for the hotelier (e.g. update of availabilities and rates)

The DMS offers good sales conditions (commission)

The DMS is an easy booking tool for the customer

The DMS is a relevant distribution channel in the national market (brings bookings and visibility)

1=very poor234

The DMS is a relevant distribution channel in

The DMS offers good features for describing the property on the platform (text, photos, links, etc.)

4567=very good

The DMS has an advanced booking technology

The DMS is a relevant distribution channel in international markets (brings bookings and visibility)

110% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

The DMS has an efficient and professional marketing

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What are your Selection Criteria for Online Travel Agencies (OTA) resp. Internet Distribution Systems (IDS)?

Relevance of IDS as sales channel

Relevance of IDS for target segements

Information, presentation of hotel (photos, texte, )

Marketing power of IDS / presence in markets

Data maintenance (e.g. interface with PMS)

etc.)

1=not at all important

2

Costs (e.g. commission)

Booking technology & features 3

4

5=very important

Back-office efficiency (e.g. biling)

Added value for guest (e.g. guest evaluation)

12 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%

User support (hotline, stats for hotel, etc.)

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OTA/IDS commissions (based on responses from hotels)

OpodoExpedia und hotels.com

Lastminute

Max

Booking comTravelocity

VenereeBookers Median

Average

Hotelguide.comhotel.dehotel.ch

Booking.com

HostelBookersRates to go

HRSTiscover

andere PlattformSTC

eBayHostelBookers

130 5 10 15 20 25 30 35

GHIXDMS

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Estimation of Revenues and Costs by Distribution ChannelR R

Bookings (%) in 2009

Bookings (%) in 2010

Revenus 2009

(in Mio francs)

Revenus 2010

(in Mio francs)

Difference (2010-2009)

Average commission (estimate)

Costs per distribution

channel 2010Tradit. channels (telephone, 0%fax, letter) 25 23.8 1'062 1'018 -45 0% 0.0Walk-ins 6.2 6.4 263 274 10 0% 0.0E-mail 27.4 25.7 1'164 1'099 -65 0% 0.0Reservation form on hotel website 8 3 10 3 353 440 88 0% 0 0website 8.3 10.3 353 440 88 0.0Realtime booking on hotel website 4.4 4.9 187 210 23 4% 8.6Internet Distribution Systems (IDS) 10.6 13.6 450 582 131 12% 70.4Global distribution system (GDS) 2 1.4 85 60 -25 14% 8.6Travel agency 3.8 2.1 161 90 -72 13% 11.4Tour Operator (TO) 3.6 2.3 153 98 -55 21% 20.5Local tourism organisation 9%Local tourism organisation (LTO) 2.9 3.5 123 150 26 9% 13.5Regional tourism organisation (RTO) 1.2 1.1 51 47 -4 9% 4.2Swiss Tourism (ST) 1 1.6 42 68 26 10% 7.0I d t i ti 0 2 0 3 8 13 4 5% 0 6

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Industry association 0.2 0.3 8 13 4 5% 0.6Hotel chain & affiliation 0.9 1.3 38 56 17 10% 5.3Event organizer 1 0.8 42 34 -8 10% 3.6Conference organizer 1.4 0.9 59 38 -21 10% 3.8

total 4'245 4'276 31 15714

Use of a Channel Manager

31.8%

In 2009 only 18% of Swiss• In 2009 only 18% of Swiss hotels used a channel manager; in 2010 one out of three hotels used such a tool

Nothree hotels used such a tool.Yes

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68.2%

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Contact

Roland Schegg & Michael FuxHES-SO Valais WallisInstitute of Tourism (ITO)S i S h l f T iSwiss School of TourismTechnoPôle 3CH-3960 Sierre / SwitzerlandTel. 027 606 90 04Tel. 027 606 90 04roland.schegg@hevs.ch / michael.fux@hevs.chwww.hevs.ch

Bachelor of Science HES-SO in TourismBachelor of Science HES SO in TourismSwiss School of Tourism (www.est-stf.ch)

Thomas AllemannhotelleriesuisseMonbijoustrasse 130CH-3001 Berne / SwitzerlandTel 031 370 43 36

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Tel. 031 370 43 36thomas.allemann@hotelleriesuisse.chwww.hotelleriesuisse.ch

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Glossary

CRS Central Reservation SystemDMO Destination Management OrganisationDMS Destination Management System (TOMAS Deskline)DMS Destination Management System (TOMAS, Deskline)GDS Globale Distribution System (Amadeus, Sabre, etc.)

hs hotelleriesuisse (Swiss Hotel Association)HRS Hotel Reservation ServiceIDS I t t Di t ib ti S tIDS Internet Distribution SystemLT supplier

LTO Local Tourism OrganisationNTO National Tourism OrganisationNTO National Tourism OrganisationOTA Online Travel AgencyPMS Property Management System (Front Office)RTO Regional Tourism OrganisationSEM S h E i M k ti ( G l Ad d )SEM Search Engine Marketing (p.ex. Google Adwords)SEO Search Engine OptimisationST Switzerland Tourism (NTO)

STC Switzerland Travel Centre (CRS of Switzerland Tourism)

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STC Switzerland Travel Centre (CRS of Switzerland Tourism)

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