Distribution Channel Performance
Strong demand growth in 2011 provided hotels more choices in how to manage demand across different distribution channels. Every channel experienced year-over-year demand growth in 2011, albeit not to the same degree. Overall demand growth in the transient segment was 3% year-over-year. However, the Web channel, defined as bookings coming in through the hotel website, grew the most, with an increase of 6.3% compared to the prior year. The GDS channel also posted a strong growth of 5.9% compared to the prior year. The average daily rate (ADR) for Web and GDS channels also grew with increases of 3.5% and 3.2% respectively. The online travel agency (OTA) channel realized the highest ADR growth with an increase of 9.8% and an increase in demand of 3.5% compared to the prior year. This channel continues to play a strong role accounting for 11.4% of overall transient segment demand.
The central reservations system (CRS) channel grew ADR by 2.1% year-over-year but with a matching decrease in occupancy of -2.1%. The hotel direct channel grew marginally by 0.7% compared to prior year. 2011 represented a continued shift of booking activity to electronic distribution channels.
2012 Distribution Channel Outlook
The demand outlook continues to be healthy with group segment demand up 5.3% and transient segment demand up 2.3% for 2012 compared to the same time a year ago, based on reservations currently on the books for 2012.
The electronic distribution channels continue to lead the way with occupancy increases in the OTA, Web, and GDS channels of 8.9%, 8.0%, and 2.0% respectively compared to the same time last year. This performance outlook also reflects the different business versus leisure booking pattern characteristic of each channel. The CRS and hotel direct channels are currently showing declines from prior year of -1.5% and -2.8% respectively. Pricing continues to strengthen with the OTA channel leading the way with a 9.0% increase in ADR compared to a year ago.
While it is quite early in the year and most of the transient demand activity is focused on Q1 and Q2, the distribution channels continue to show an outlook similar to last year. The strong demand outlook will continue to present hoteliers with opportunities to drive optimal channel mix and pricing to maximize performance.
The chart below shows the year-over-year position by market of committed occupancy, reserved occupancy, ADR and RevPAR, based on business on the books for the future 12 months. Committed occupancy is group blocks plus transient reservations. Reserved occupancy, ADR and RevPAR are based only on reservations (group pickup and transient reservations). Shades of green indicate performance better than the market average. Shades of orange/red indicate performance worse than the market average.
TravelClick (www.TravelClick.com) is a leading provider of profitable revenue generating solutions for hoteliers worldwide. TravelClick offers hotels world-class reservation solutions, business intelligence products and comprehensive media and marketing solutions to help hotels grow their business. With local experts around the globe, we help more than 30,000 hotel clients in over 140 countries drive profitable room reservations through better revenue management decisions, proven reservation technology and innovative marketing. Since 1999, TravelClick has helped hotels leverage the web to effectively navigate the complex global distribution landscape. TravelClick has offices in Atlanta, Barcelona, Chicago, Dubai, Hong Kong, Houston, London, Melbourne, New York, Orlando, Shanghai, Singapore and Tokyo. Follow us on www.twitter.com/TravelClick and www.facebook.com/TravelClick
Information in this newsletter covers the top 25 markets in North America and is based on data supplied by brands participating in TravelClick's MarketVision Demand Position reporting.