Nov202013

Are Gen Y hotel guests missing the best hotel deals?

A study of hotel guests is making the news rounds this week with its conclusions that Generation Y travelers (age 24-36) comprise 33% of hotel guests who booked online compared to 23% Generation X (age 37-48) and 29% Baby Boomers (age 49-67).The other 15% are split between 5% Seniors (age 68+) and 10% Generation Z (age 18-23).

Adara hotel guest age segments

Source: AdaraGlobal.com

The age segment demographics seem to be the focus of most of the reporting on this Adara/Hudson study: Who’s Sleeping With You? A Detailed Look Into The US Online Hotel Guest.

Concern for the hotel industry is the finding that younger travelers have less brand loyalty.

More interesting to me is the consumer behavior showing most travelers do not have hotel loyalty. The data also reveal to me that most travelers do not bother with planning a hotel stay strategy to get the most benefits and lowest rates for their hotel stays. A little bit of planning can save a lot of money.

This post shares some of the research finding and my thoughts on how to get better hotel rates with a search strategy.

Loyalty membership

  • Only 2 of 5 U.S. travelers feel brand loyal. 61% of guests don’t consider themselves loyal to any hotel property or chain.
  • 40% of guests who book on hotel brand sites are elite members of the hotel loyalty program.
  • Elite members of hotel loyalty programs conduct 9 searches outside the hotel chain before they book.
  • Basic members of hotel loyalty programs conduct 11 searches before booking.
  • 92% of hotel guests who book through an OTA (online travel agency like Expedia.com) are not hotel loyalty program members.
  • 47% of guests who book through the hotel brand website are not hotel loyalty program members.
  • Less than 3% of elite members in a hotel loyalty program booked hotels through an OTA site.

Adara hotel bookings loyalty

Source: AdaraGlobal.com

Online Booking Behavior

  • 123.3 million U.S. travelers will research hotels online in 2013. 92% of these travelers will book  a hotel online.
  • Travelers who book through OTA sites typically book about 10 days before the trip.
  • Travelers who book through hotel brand sites typically book about 25 days before the trip.
  • Travelers prefer to use tablets than smartphones to book hotels.
  • Prefer either supplier or intermediary sites – but not both. Based on Adara’s data, just 4% of the Bookers who shop on hotel supplier “brand.com” shoppers also shop on an OTA (see Figure 6).
  • 79% of guests who search hotel brand sites book the same day.
  • 67% of guests who search OTA sites book the same day.
  • Worth noting are the considerable number of leisure guests who visit “opaque” travel agency sites like Hotwire and priceline.com (29%), metasearch sites (28%), and sites that specialize in travel-specific special offers, like Travelzoo (15%).
  • 11% of same-day reservations on hotel brand websites are booked by guests who are not hotel loyalty program members compared to 33% of same-day reservations booked through an OTA site.
  • 25% of hotel reservations booked on hotel brand websites are within two days before hotel arrival compared to 55% of OTA bookings.
  • 41% of hotel reservations booked on hotel brand websites are made between 3 weeks and 12 weeks before arrival. (Loyalty Traveler note: This is why I think the sweet spot for low hotel rates is the period from 3 to 14 days before stay to get the best hotel rates and also find Best Rate Guarantee claims since this is when hotels are frequently adjusting rates to fill empty rooms. The frequent rate changes result in a better chance to locate rate discrepancies between the hotel site and an OTA site).

Hotel Stay Statistics

  • Most hotel guests earn relatively modest incomes, with 38% earning less than $50,000 a year.
  • Length of hotel stay averages 2 days for hotel site bookings compared to 1.8 days for OTA hotel reservation. 
  • One night stays are 55% hotel site bookings and 57% of OTA bookings.
  • Two night stays are 23% hotel site bookings and 24% of OTA bookings.
  • Three night stays are 11% hotel site bookings and 10% of OTA bookings.
  • Four night stays are 6% hotel site bookings and 5% of OTA bookings.
  • Five nights and longer stays are 6% hotel site bookings and 4% of OTA bookings.
  • In almost every city (9 cities evaluated in study include New York, Orlando, London, Toronto, New Orleans, Los Angeles, Las Vegas, Chicago, San Francisco), travelers are more likely to shop on select service (midscale) brands and book at full-service (upscale and upper upscale) brand.
  • About half of all guests let their travel budgets dictate their destination and hotel. If they need to scrimp, guests are more likely to cut back on lodging rather than airfare or rental cars.

Adara OTA-Hotel site

Source: AdaraGlobal.com

I find this cross-shop data very interesting. Few hotel guests shop on both the hotel brand website and OTAs. This tells me there are millions of hotel guests missing opportunities for approved Best Rate Guarantee claims and lower hotel rates than shown on either the hotel website or OTA sites.

Shop around extensively. The typical guest who shops on a hotel website performs more than six search sessions across multiple hotel brand sites before choosing where to stay. OTA shoppers perform almost as many searches – around 5 – before they choose their OTA and hotel. Even loyal Bookers’ will shop around within each category (brand or OTA) to get their expected sense of value.

Who’s Sleeping With You – Detailed Look Into the U.S. Online Hotel Guest – Henry Harteveldt

I have never actually tracked the number of hotel searches I do for a trip. I imagine I am in the 30 to 50 searches range for most of my hotel stays. That probably means about two to three hours of comparing rates for each trip of two or three hotel nights checking hotel brand site rates against OTA sites.

In the past six weeks my Best Rate Guarantee claims saved about $400 on the room rates shown on the hotel brand websites and about $200 off the rates shown on the OTA after that rate was further discounted by 20% for 3 nights with Hyatt, 25% for one night with Marriott and one free night saved $135 at a Holiday Inn Express. Saving $200 to $400 for about five hours of rate searches is a good ROI for my time in my bookings.

Is Denver the BRG Capital of the USA? (October 1, 2013)

Hotel Review: Hyatt Place Denver Cherry Creek (October 12, 2013) – Hyatt room rate $131, Hotels.com $85. My BRG rate $68.

Best Rate Guarantee Courtyard Fresno (November 5, 2013) Saved $80 from Marriott site and $25 less than OTA site.

Best Rate Guarantee follow-up Holiday Inn Express Tehachapi, California Expedia rate $112.50, IHG rate $125. My rate = free.

About the report:

Who’s Sleeping With You?
A Detailed Look Into The US Online Hotel Guest
By Henry H. Harteveldt, Travel Industry Analyst, Hudson Crossing LLC

To better understand the hotel shopping and booking landscape, Adara, a global leader in helping marketers connect with targeted traveler audiences, commissioned Hudson Crossing, an independent, objective strategic advisory firm, to prepare this report exploring the profiles and behaviors of US online hotel guests. The report includes data provided by Adara and Hudson Crossing’s proprietary research about US online hotel guests. Adara’s data includes loyalty program membership, search and booking activity, and mobile device use. The data is provided by 60 leading travel companies around the world.  Data in this report came from Adara’s ecosystem of the more than 1 billion transactions the company processes each month, filtered for confirmed hotel Bookers who made hotel reservations between May 1, 2013 and July 31, 2013. 

*****

Ric Garrido of Monterey, California is writer and owner of Loyalty Traveler.

Loyalty Traveler shares news and views on hotels, hotel loyalty programs and vacation destinations for frequent guests.

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About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

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Comments

  1. Good for you. Your time is worth more than saving $80 for an hour’s work.

    Unfortunately, there are far more people living within income brackets where giving up $400 in savings for 5 hours work is the far better value.

  2. If you go to Expedia and see 9 hotels listed is that one search or nine searches? If it counts as one the 9 to 11 per booking searches is hard to believe. This is especially true for a business traveler on someone else’s dime and with any brand loyalty at all.

    If only 3% of Elites book with an OTA why do they continue to do 9 searches?

  3. I’m definitely up there in terms of searches. I don’t really view it as ROI. I enjoy the search, especially because I like boutique hotels more than major hotel brands.

  4. Seems like a reasonable study to me. While we are immersed in the miles and points world, it’s easy to forget that there are tons of travelers that stay at hotels only a few nights a year, or who travel a lot but would prefer to go for absolute dollar cost savings booking opaque rates or OTA, vs.booking direct.

  5. For me, thinking about my most recent hotel searches in San Francisco.

    1. Look at Kayak
    2. Check Starwood
    3. Check IHG
    4. Check Marriott
    5. Check Hyatt
    6. Check Choice.
    7. Check Best Western
    8. Check Carlson
    Compare each to the Kayak rates for BRG rate discrepancy.

    I have elite with all these chains except Choice.

    Narrow search to a few select hotels, then repeat process of checking AAA rates, special offer rates, slightly different dates or neighboring towns.

    Find the lowest rate I can cancel without penalty and book a hotel.

    Check again the next day for BRG potential claims.
    Check again the following day, assuming the stay has not occurred yet.

    This is about 30 checks.
    First check may be one to two hours. Other checks less than 15 minutes.
    50% chance I will find a BRG rate or else a low rate that also qualifies for a good promotion bonus.

    Assuming I narrow the search to a couple of hotel chains.

  6. Nice overall post – lords of good stats. I figure I perform a dozen or so searches for trips. More if it is longer or I’m looking at boutique hotels.

  7. For most people saving 400 bucks for five hours of work is a good deal. I think a lot of Generation Y don’t know about loyalty programs.

    It’s sometimes just easier to use the OTO’s like BookingHotelStay, Expedia, or Kayak than join a loyalty program.

  8. I have loyalty to some chains because of status due to work travel. If you have no status, why should you have any loyalty? I’m sure that’s Hilton’s thinking with offering status to practically anyone that wants it.

    I do have loyalty, but I will search OTA sites sometimes just to see if other cool hotels are available.

    I do need to step my game up BRG. I’ve just never seen big value in it, but I should look harder.

  9. @Charles Clarke – I don’t like the hotelscombined.com display as much. And I want to check the hotel brand sites directly since there are often lower rates than BAR rates shown on OTA.

  10. Lots of interesting information in this post. I almost always use OTA sites to find a hotel, but I usually set a hotel budget and then look at the hotel reviews unless I am familiar with the destination city and hotel options. I am not surprised that most searches are for mid and upscale hotels. If you have the time to preplan your trip, hopefully you are looking for something a little nicer than Motel 6. Nice tip though about looking for low rates 3 days to 2 weeks before your stay.

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