Distribution Channels in Swiss Hotels

Sales in Online Channels GrewSales in Online Channels Grewin the Swiss Hospitality Sector

Despite Economic Downturn in 2009Despite Economic Downturn in 2009

Results of an online survey among membersof the Swiss Hotel Association (hotelleriesuisse)

Roland Schegg, Michael Fux and Thomas Allemannroland.schegg@hevs.ch / michael.fux@hevs.ch / thomas.allemann@hotelleriesuisse.ch

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April 20101

The Study

• Objective: Monitoring of booking trends on different distribution channels in the Swiss hospitality sectorSwiss hospitality sector.

• Research instrument: online survey

• Administration: Over 2300 hotels have been contacted in January 2010 by e-mail, all members of the Swiss Hotel Association (hotelleriesuisse).Relaunch of the survey in March 2010.

• Response rate: 224 replies ~10 percentResponse rate: 224 replies 10 percent

• Similar studies have been conducted already in the past: 2003, 2005, 2007, 2009

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Content

• Executive Summary• Distribution channels in Swiss hotels• Distribution channels in Swiss hotels• Internet Distribution Systems (IDS) used• Management tools in distribution

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Content

• Executive Summary• Distribution channels in Swiss hotels• Distribution channels in Swiss hotels• Internet Distribution Systems (IDS) used• Management tools in distribution

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Executive Summary (I)

• Direct booking channels (telephone, fax, walk-ins, e-mail, Web form) are still dominant for Swiss hotels with 71 1 percent of overall bookings (2008: 75 4%)dominant for Swiss hotels with 71,1 percent of overall bookings (2008: 75,4%)

hoteliers have large control over distribution.

O th h lf f ll b ki (52 7%) di t d th h• On average more than half of all bookings (52,7%) are mediated through electronic channels (e-mail, Web form, real-time booking, Global Distribution Systems (GDS) and Internet Distribution Systems (IDS)). 50 percent of them are mediated through e mailmediated through e-mail.

• 26 percent of hotels have a real-time booking system on their own website, but realize on 4,4 percent of all sales through this channel. Real-time booking channels have a market share of 17 percent (booking engine on own Website 4,4%, GDS 2% and IDS 10,6%), an increase of 5 percent compared to 2008.

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Executive Summary (II)

• One out of five hotels uses a channel manager to manage the different online channels Nearly 80 percent of hotels in the survey spend less than 5 hours achannels. Nearly 80 percent of hotels in the survey spend less than 5 hours a week for the management of the online distribution channels.

A channel manager is a system which supports the hotels in the management ofA channel manager is a system which supports the hotels in the management of room availabilities and rates in the different online distribution channels.

• Internet Distribution Systems (IDS) have significantly increased their market• Internet Distribution Systems (IDS) have significantly increased their market share, from 5,7 percent in 2008 to 10,7 percent in 2009. This is probably due to a more active online distribution sales strategy during the economic crises when hotels tried to compensate for foreseen losseshotels tried to compensate for foreseen losses.

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Executive Summary (III)

• Booking.com, Hotel Reservation System (HRS), Switzerland Travel Centre (STC) and destination management systems of local destinations are the mostand destination management systems of local destinations are the most frequently used IDS in the Swiss hospitality sector. On average a Swiss hotels uses 5 IDS channels.

• The Top 5 IDS (Booking.com, HRS, hotel.de, Expedia resp. hotels.com, Venere)could increase their market share by 16 percent on average compared to 2008.

• A rough estimation of real online sales in the Swiss hotel sector based on data from our survey results in an overall turnover of probably more than 800 Million CHF in 2009 and commission costs of some 80 Million CHF (out of 160 Mio in total).

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Content

• Executive Summary• Distribution channels in Swiss hotels• Distribution channels in Swiss hotels• Internet Distribution Systems (IDS) used• Management tools in distribution

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Shares of booking channels 2002-2009

Industry/trade associations

Global DistributionSystems (GDS)

2009 (n=198)

2008 (n=184)

2006 (n=100)

Chains and affiliations

Event/conference organizer

y 2006 (n 100)

2005 (n=94)

2002 (n=202)

Tour operator

Local/regional/nationaltourism organisation

Internet DistributionSystems (IDS)

Travel agency

Traditional channels

E-mail

Own Website (formand realtime booking)

9

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Traditional channels(telephone, fax, letter)

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Booking channels in Swiss hotels in 2009

Share of channel in %Switzerland

(n=198)Valais(n=43)

Graubünden(n=35)

Telephone, fax, letter 25,0 20,0 25,6W lk i 6 2 6 5 5 9Walk-ins 6,2 6,5 5,9E-mail 27,4 31,5 32,5Reservation form on hotel website 8,3 9,0 12,8R l ti b ki h t l b it 4 4 3 5 2 8Real time booking on hotel website 4,4 3,5 2,8Internet Distribution Systems (IDS) 10,6 9,8 6,1Travel agency 3,8 5,1 4,1T t 3 6 8 0 2 4Tour operator 3,6 8,0 2,4Local tourism organisation 2,9 3,2 3,4Regional tourism organisation 1,2 0,7 1,7N ti l t i i ti 1 0 0 5 1 8National tourism organisation 1,0 0,5 1,8Chains and affiliations 0,9 0,7 0,2Event organizer 1,0 0,6 0,2C f i 1 4 0 4 0 6

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Conference organizer 1,4 0,4 0,6Industry/trade associations 0,2 <0,1 0,0Global Distribution Systems (GDS) 2,0 0,4 <0,1

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Booking options on own hotel website

Real time booking withoutdirect link to PMS*

Real time booking withdirect link to PMS*

Booking request formon hotel website

Booking request per e-mail

No booking possibilityon website

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0% 10% 20% 30% 40% 50% 60% 70%

on website

* P t M t S t (PMS) / F t Offi S ft11 * Property Management System (PMS) / Front Office Software

Real time booking systems used by Swiss hotels

2009(n=164)

2008(n=123)

Number % on total Number % on total

GHIX Superbooking 28 17% 12 10%

STC (Switzerland Travel Center) 17 10% 17 14%

GlobRes (Global Reservation Agent) 14 9% 18 15%

Reconline 14 9% 7 6%

Booking com 13 8% 3 2%Booking.com 13 8% 3 2%

Protel (rebagdata) 11 7% 9 7%

Bookingsystem.ch (Infonautics) 7 4% 8 7%g y ( )

Fidelio (myfidelio.net) 7 4% 7 6%

Synergy Booking Engine (ActiveMetrics) 5 3% 4 3%

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Other Systems 48 29% 38 2%

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Content

• Executive Summary• Distribution channels in Swiss hotels• Distribution channels in Swiss hotels• Internet Distribution Systems (IDS) used• Management tools in distribution

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Internet Distribution Systems used by Swiss hotels

2009 2008

More than one answers possible Number % on total Number % on total

Booking.com 162 72,3% 120 57,7%

H t l R ti S t (HRS) 148 66 1% 112 53 8%Hotel Reservation System (HRS) 148 66,1% 112 53,8%

myswitzerland.com / Switzerland Travel Centre (STC) 146 65,2% 133 63,9%

Website of tourism organisation 124 55,4% 133 63,9%

hotel.de 97 43,3% 15 7,2%

Expedia and hotels.com 92 41,1% 65 31,3%

Venere 85 37,9% 63 30,3%

hotel.ch 66 29,5% 46 22,1%

eBookers 50 22,3% 24 11,5%

Travelocity 36 16,1% 30 14,4%

Lastminute 33 14,7% 22 10,6%

eBay 26 11,6% 4 1,9%

Tiscover 24 10,7% 21 10,1%, ,

Global Hotel Index (GHIX) 22 9,8% 24 11,5%

Hotelguide.com 20 8,9% 19 9,1%

Opodo 20 8,9% 17 8,2%

TOMAS 20 8 9% 1 0 4%

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TOMAS 20 8,9% 1 0,4%

HostelBookers 15 6,7% 4 1,9%

Rates to go 3 1,4% 3 1,4%

Others 56 25,0% 50 24,0%

F tt ki t Pl ttf k t 2009 i V l i h 2008 i W h t h l 5 P t i h14 Fett markierte Plattformen konnten 2009 im Vergleich zu 2008 ein Wachstum von mehr als 5 Prozent verzeichnen.

Number of Internet Distribution Systems channels used by a hotel

30

35

Mean = 5,9 / Median = 5,0 / Min. = 1,0 / Max. = 15,0

25

30

15

20

mbe

r of

hot

els

10

15

Num

0

5

15

01 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Number of IDS used by a hotel

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Content

• Executive Summary• Distribution channels in Swiss hotels• Distribution channels in Swiss hotels• Internet Distribution Systems (IDS) used• Management tools in distribution

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Use of a channel manager for online distribution

18%12%

• A channel manager is a system which supports the hotels in the manage-ment of room availabilities and rates in the different online distribution channels.

70%

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Yes No I don’t know

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Average time spent for the management of online distribution channels

Time spent per week

3%

14%

7% 2%

• Mean = 4,4 hours14% 31% • Median = 2,0 hours

• Min. = 0 hours• Max = 140 hoursMax. 140 hours

43%

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no time spent less than 2h from 2h to 5hfrom 5h to 10h from 10 to 20h 20h and more

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Importance of Yield Management

12%20%

12%

25% 11%

17%15%15%

Yes, we use it already Yes, very important

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, y , y p

Yes, important Interesting

No issue for my property I don't know

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Contact

Roland ScheggUniversity of Applied Sciences of Western Switzerland Valais(HES-SO Valais Wallis), Institute of TourismT h A k 3TechnoArk 33960 Sierre (Switzerland)Tel. +41 (0)27 606 90 04roland.schegg@hevs.chroland.schegg@hevs.chiet.hevs.ch / www.hevs.ch / www.est-stf.ch

Bachelor of Science HES-SO in TourismMBA Major in Tourism & Hotel ManagementMBA Major in Tourism & Hotel Management

Thomas Allemannhotelleriesuisse (Swiss Hotel Association)Monbijoustrasse 1303001 Berne (Switzerland)Tel +41 (0)31 370 43 36

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Tel. +41 (0)31 370 43 36thomas.allemann@hotelleriesuisse.chwww.hotelleriesuisse.ch

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