on 27 October 2009 
(No Ratings Yet)There is an interesting chart flying around the web today regarding US online travel agencies.
Posted initially on the Business Insider, the chart is from consultancy and investment house Barclays Capital and includes actual and estimated booking numbers for three of the main OTAs in the US from 2005 to 2013.
Many of those commenting on the figures have been drawn to the wholly predictable drop for Orbitz and Expedia (but not Priceline) in 2009. But the interesting figures are those thereafter.
Barclays estimates that Priceline will overtake Orbitz for total gross number of bookings for the first time by 2010.
Although Expedia is forecast to to remain market leader in 2013, Priceline will account for 30% of the trio’s overall pie.
NB: Figures obviously do not include Travelocity.
Related posts:
A few years ago a buzzword in ecommerce was “disintermediation”, but in the early 2000s what we saw instead in travel was the rize of the OTAs as “internet intermediaries”… but now all the trends (including the above) show that customers are increasingly cutting out the middle man and going directly to hotel sites.. though (of course) using social media and other UGC to confirm their choices before booking.
As the old quote goes, “may we live in interesting times”
The second set of figures is interesting to me.
The figures for Priceline go up around 20% year-on-year for 09/10/11/12 (the figures are increases of 20.3%, 25.8%, 19.7%, 16.7% for these four years)
The figures for Orbitz are much less uniform. For the same four years the changes are -8.6%, 6.4%, 8.4%, 7.5%.
So these figures suggest that Orbitz will react next year to the decrease this year, but afterwards will only see a modest growth (the same goes for Expedia). Yet Priceline will continue their growth of about 20% each year.
Looks like there’s quite a few assumptions being made!
Edd, I’d read it thus :
- hotels have had “best price guarantees” up to compete with the OTAs for several years now, consumers are getting used to it.
- hotels still want to dispose of distressed inventory, but without naked discounting (well, this current economic downturn being an exception to that)
- the opaque sites therefore will clearly grow in importance
What does this mean for the OTAs ? Clearly they have to be able to differentiate themselves more and more from the hotel websites.
One can see this already in things like reduced booking fees, increased and new types of OTA guarantees… but what they still have going for them is some negotiating power with the airlines to take net rates and package with hotel rooms etc… at a better price than the consumer themselves can do. Nobody has yet come up with a way for hotels to package air (and so give them their own opaque channel) in a way that competes with the OTAs.
Hmm… packaged hotel/air to give opacity to hotels… what goes around comes around (for those in the room old enough to remember!)
TomCayman — I just did a quick survey of some random major chain and luxury chain hotels and found that travel sites tended to have superior rates to hotel sites for identical rooms.
I looked at, completely arbitrarily, expedia/hotels.com, orbitz, travelocity, and AA vacations (that last just to cross some lines). I only compared them for 5 randomly chosen hotels, which of course does not make for a very thorough survey at all, with no statistical value. But the anecdotal value is pretty clear. I didn’t have time for anything very involved, so I just chose those four providers and my 5 hotels more or less at random, but they all come from different chains spread across very different destinations. In no case did a hotel have a lower price than one of the first three providers. AA Vacations (ezRez?) did have a huge markup for a couple of the hotels, but then they had lower prices than the others for a couple of other hotels. In no case did all four offer the same price, and it was rare in fact for more than 2 of them to have the same price.
Not that this is surprising, but it tends to suggest that hotel sites should not expect to see more direct reservations over time unless industry economics change. So it seems that savvy travelers should continue to use these major online services, perhaps with a federated search on top, seeing as no one aggregator (not expedia or anyone else) has consistently lower rates for all chains and all holiday destinations.