Online Booking Trend Gathers Strength
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It has certainly been the case with our colleagues across the Tasman where Australia's online accommodation industry is going from strength to strength with the GFC accelerating the trend toward web bookings. So strong is this trend that it was the overwhelming message to emerge from No Vacancy, Australia's leading accommodation industry conference, held in Sydney recently. Speakers told the 200 No Vacancy delegates that the evidence is clear. They said hotel bookings through GDS, which are largely corporate, suffered massive drops last year, yet all major accommodation websites went from strength to strength over the same period as consumers shopped online for the cheapest deal.
The trend was also aided by aggressive online sales from major brands such as Accor, Mantra Group and Oaks that directed consumers straight to their websites. Accor Australia boss Simon McGrath estimated that 35 per cent of his company's bookings now come via the internet. He said 65 per cent of those are direct to accor.com while the rest were sold by online travel agents. "We have a right to own the customer," he said.
Accor suffered a three per cent drop in occupancy and six per cent fall in rate across its 150 property portfolio through 2009. "Given there was only a three per cent drop in occupancy, clearly the opportunity to bounce back in rate is the industry's biggest issue right now," he said.
"The cycle looks different this time around. Traditionally occupancy drops year one, rate drops year two and it takes five or six years to get rate back," Mr McGrath said.
This time he said rates had fallen but occupancy remained relatively stable.
Another difference between this and previous cycles is that 40 per cent to 60 per cent of room inventory is dynamically priced (rather than fixed). That meant operators such as Accor could raise prices immediately demand returned rather than being locked into the low rates negotiated to build a business base during lean times.
So how similar to this picture is the trend in New Zealand? AMG asked four companies that work in varying aspects of the local online industry to give their take on the online phenomenon.
