Hotels Gain More Control Over Online BookingsHotels Gain More Control Over Online Bookings

Hoteliers' efforts to drive bookings through their own Web sites appear to be working. Online bookings made directly through hotels were up nearly 32% in 2004 over the previous year, according to a report released this week by TravelClick Inc., a travel technology provider.

The report shows growth in hotel bookings across nearly every online channel. Notable exceptions were Hotels.com, where bookings as a percentage of overall hotel business were down nearly 16%; Orbitz, which shrank half a percentage point; and retail travel agency sites, which fell nearly 4%. Other big growers included TravelWeb, which was up more then 24%; Priceline, up 17%; and Hotwire, up 14%. The results were based on bookings at 32 major hotel brands surveyed by TravelClick.

Overall, Internet hotel bookings grew nearly 23% in 2004. Yet the most notable trend is the sharp increase in reservations made directly at hotel sites, says Norm Rose, principal of Travel Technology Consulting and an analyst with travel research firm PhocusWright.

That shift comes from hotels' efforts to ensure that the room rates on their sites aren't priced higher than other sites, which is typically backed up with a lowest-rate guarantee--meaning a hotel will match any price for its rooms a consumer finds elsewhere and will sometimes offer an incentive to book directly, such as a free room upgrade upon availability. Price competition from travel sites is a thorny issue for hotels: Last year InterContinental Hotels Group said it would no longer list its inventory on Expedia.com because of pricing inconsistencies, Rose says.

The increase in direct hotel bookings threatens the business models of third-party sites such as Expedia, Orbitz, and Travelocity. Those sites, Rose says, are depending increasingly on vacation packages that include a number of components such as hotel reservations, airfare, and car rental. "Whether they'll be able to succeed will depend on the degree of their negotiation success."