Long stay promotion on OTAs can maximize hotel revenue?
Expedia's new study shows travelers who booked via an OTA spent more per trip than non-OTA guests across all categories, regardless of whether they were traveling for business or leisure, making them a valuable segment of customers for hotels.
Expedia cooperated with Oxford Economics to analyze hotel guest spending during more than 98,000 trips, segmented by guests who booked part or all of their trip using an online travel agency (OTA) and non-OTA guests
Over one-fifth (21 percent) of surveyed travelers used an OTA in trip planning and booking, and according to the data, OTA bookers stay eight percent longer and spent nearly 18 percent more per trip than non-OTA bookers. Coined by Oxford Economics as the “OTA Premium,” this variance between OTA guest and non-OTA guest spending is evident across all categories, including food and beverage, retail, recreation and entertainment, and transportation. The largest spend difference is in the retail category, where the OTA premium makes up 26 percent, followed by transportation and recreation and entertainment, both upwards of 20 percent.
The Oxford data on the value of an OTA booker is further substantiated by local market data from Las Vegas. According to an August 2017 gaming survey of over two thousand U.S. respondents, Expedia Las Vegas bookers spend over $1,750 per trip. When visiting Las Vegas, Expedia travelers visit an average of three different hotels per trip, and spend more than the Las Vegas Convention and Visitors Authority (LVCVA) average on shopping, dining, shows, site seeing and transportation.
“OTAs are a valuable contributor to the travel ecosystem, often bringing a larger traveler spend to every facet of a trip, regardless of trip purpose,” said Abhijit Pal, head of research for Expedia. “With more than one-fifth of travelers using an OTA to book all or part of their trip, the data shows the scale and importance of this traveler segment to hotel brands and owners, transportation companies, restaurants and other businesses in destination.”
The OTA premium is partly attributable to the typically longer length of stay for OTA bookers, and does not have any correlation to travel party size. Moreover, the Oxford research unveils that OTA bookers generally are slightly younger than non-OTA bookers, with a higher concentration in the 25 to 54 age cohort, by nearly 10 percentage points, and no notable variant from household income.
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