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SiteMinder report: Rooms on direct hotel websites nearly double the price to third-party channels

August 10, 2016 Technology No Comments Print Print Email Email

The average room price hotels are listing on their direct website is nearly double the average price they are listing on third-party booking channels, the global hotel industry’s leading cloud platform, SiteMinder, reveals today.

The finding is based on the 43.5 million reservations that passed through SiteMinder’s technology over the 12 months ending June 2016 to generate US$16 billion in revenue for the company’s 22,000 hotel customers around the world. An analysis of the year-long data found that the average reservation was US$340 through SiteMinder’s Channel Manager, which streamlines reservations made on more than 350 largely third-party booking websites, while the average reservation was US$600 through SiteMinder’s Internet booking engine, TheBookingButton, which facilitates bookings on a hotel’s own website.

SiteMinder’s managing director, Mike Ford, says the finding highlights the continued lack of education among hoteliers on the prevalent issue of rate parity and the value of direct bookings.

“Our data shows that hotels globally are charging the online consumer 1.8 times more, on average, for accommodation booked via their own direct website than via OTAs and other third-party channels. While we can’t forget the reach these third-party sites provide to hotels, the commissions they receive are up to a quarter of a booking’s total value,” says Mr Ford.

“Today’s finding is particularly concerning at a time when we are witnessing unprecedented efforts from hotel brands to attract guests directly and to challenge anti-competitive laws that inhibit rate parity. It means we as an industry clearly need to do more to help hoteliers understand how they can help themselves and stop being their own enemy.”

The total revenue and reservations generated through SiteMinder’s technology have grown 122 percent and 142 percent, respectively, over the past three years. Every minute, SiteMinder now powers 83 reservations worth more than US$30,000 in revenue for its hotel customer base which spans 160 countries on six continents.

In addition to The Channel Manager and TheBookingButton – which, alone, powered 1.75 million reservations worth US$1.05 billion in revenue for hotels over the past year – SiteMinder’s technological solutions include GDS by SiteMinder, a single point of entry to the industry’s major global distribution systems, Canvas, the intelligent website creator for independent hoteliers, and Prophet, the real-time market intelligence solution that takes the guesswork out of pricing rooms.

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