Customer behaviour in the travel industry is rapidly changing. More and more customers book their travel over the internet. High street travel agents are almost gone. Booking.com spends more than a billion dollars a year on Google advertising, almost always comes first in Google search and takes a lion’s share of internet requests from people looking for hotels. The hotels detest aggregator sites for bundling all hotels together and charging 15% commission. Airbnb and other short-term accommodation companies grow more than 50% per year and lure tourists away from the hotels.
We decided to take a snapshot of how people book hotels today and asked 2300 people about their hotel booking behaviour and preferences.
We found that 75% of people now book hotels online. 15% book hotels directly via phone or email, and 10% – still via a travel agent.
Out of those who book online, 40% used booking.com, 20% – hotels.com and 12% – other aggregator sites. Only 21% of those who booked online did it directly on the hotel website.
This confirms that hotels now can not survive without online bookings, and aggregator sites yield massive power. Nevertheless, those hotels that promoted their sites and achieved direct online bookings saved on 15% commission paid to the aggregators and managed to build a direct relationship with customers.
Before booking, customers look for information about the hotels. How do they do it? 3 most popular methods, each used by approximately half of the people we surveyed, are the Google search, booking.com and hotel’s own site. Tripadvisor reviews are used by 34% of the bookers. 19% rely on recommendations from friends, 10% read travel books and articles, and only 4% call a travel agent for advice.
What is important for travellers now when they book a hotel? For 70% of people location is very important. It is interesting that 30% of people change location if they find a hotel meets their other requirements. 2 other very important factors, both mentioned by 54% of travellers, are price and hotel’s facilities, that surprisingly were mentioned by as many people as those who mentioned the price. Class of comfort and reviews and ratings follow closely at 45% and 40% respectively. Today more and more people strive for better comfort, service and facilities; good location and affordable price are not enough. Only 23% of respondents rated recommendations from family and friends as very important. Others probably trust their own research.
Hotel photos and reviews remain the most preferred content formats when looking for information about a hotel. This goes against the overall internet megatrend that video becomes the main content format online. Interestingly, 20% of people say that they are not interested anymore in text descriptions of the hotel, preferring to get information from more objective, often visual sources.
When people make their travel plans and study destinations and accommodation options, non-digital sources become increasingly unpopular. 3 least popular sources of information are articles in newspapers and magazines, travel agents and guide books. The most popular are online reviews and hotel photos. Videos are in between, and we believe that their popularity will grow as video becomes the main content format online.
26% of tourists surveyed stayed in a rented accommodation such as Airbnb last year. The main reasons why people chose a rented accommodation instead of a hotel are location (very important factor for 70% of people – same number as for hotels), comfort, for example, more space than in a hotel (57%), price (50%) and more personal experience (47%). This makes it clear that tourists chose Airbnb not only for the price, but for many other reasons, and this option increasingly competes with the hotels.
When we asked tourists to compare their personal experience of hotels and Airbnb accommodation, the biggest difference was in price – 47% found Airbnb prices better while only 11% found hotels’ prices better. For other factors, such as location, comfort and meeting expectations, 40-50% of tourists do not see a big difference between the hotels and Airbnb, around 30% prefer Airbnb and 25% voted for hotels. It is clear that Airbnb already has a sizeable segment of loyal followers who prefer it to staying in the hotels, and this segment will probably only grow.
When we asked those travellers who do not stay in Airbnb why they prefer hotels, the most popular answer – 70% – was services such as daily cleaning and room service that are not available in Airbnb. Breakfast was the second most popular answer at 60%, followed by facilities such as gym or restaurant at 56%.
Email is the most popular way to communicate with the hotel or Airbnb host (52%), followed by an old-fashioned phone (40%). Internet messengers, online chat or SMS are not popular at 2-3% each.
So what are the conclusions for the hoteliers? It is not a surprise that Airbnb is becoming more and more popular, although our finding that a quarter of tourists already tried them is striking. Another alarm for hotels is that more than half of all bookings are now done through Booking.com, Hotels.com and other aggregator sites that make it difficult for hotels to stand out and communicate directly with the potential guests.
Now when ¾ of all bookings are done online, hotels do need to master digital marketing. Their sites need to really stand out, and they should know how to compete with aggregator sites for customers looking for hotels online in Google and social networks.
Hotel’s reviews and photos online should be impeccable, and hotels should stand out with new content and communication formats not picked up by the aggregator sites yet, such as video that is rapidly becoming a new standard for internet content.