How hotel distribution evolved in EMEA and APAC from 2018 to 2021.
In the past 15 months, the hotel industry has suffered one of the most significant losses in gross booking quantity ever. However, despite volumes in 2020 being 69% lower than the previous year, we have been monitoring the reservation types, channels and rates to gain insights into trends that could help hotels plan the recovery.
In 2019 we published our first analysis of distribution trends, titled A Deep-dive into European Hotel Distribution trends 2014-2018, in which we uncovered the sheer volume of cancellation rates from OTAs and how this was affecting hotels. The report laid out a lot more on how the industry, at its peak during the study, was changing.
Our second analysis in 2020 was broadened to look into the trends not only in EMEA but also in Asia-Pacific (APAC). The report, called The Rise of Direct Bookings Over OTAs, brought to light how patterns had changed due to the pandemic, and how direct bookings were taking a much bigger part of a much smaller market.
This study is the follow-up to our 2020 partial analysis. In this report, we examined the year 2020 in its entirety (to better understand the impact of the pandemic), and reviewed the first five months of 2021. The information included in this research has been gathered from 3,442 hotels in Europe and 438 hotels in the Asia-Pacific region.
Key findings
- The Website Direct channel surpassed Booking and OTAs in Asia* (41% share), and is the second largest in Europe (32%)
- In 5 years, OTAs’ market share has declined by 11 points in Europe and by 14 points in Asia*
- Expedia’s loss of market share continues, losing 12 points in Europe and 10 points in Asia-Pacific*
- European average Hotel Booking Value increases by 12% in 2021 showing renewed confidence and demand for travel
- In 2020, Cancellation doubled with Expedia hitting 71% cancellations and Booking almost 60%. In Eruope, we expect to return to 2019 levels as demand picks up and travel rules stabilise.
Global booking trends: recovery is still fragile
Globally speaking, the reservation volume in 2021** is still 40% lower than 2019 figures — but 159% above the March to May months of 2020. That being said, the EMEA market shows promising signs of improvement, while APAC, after an initial recovery, saw a steady decline, mainly due to the new lockdowns.
The recovery is happening and we can see that once restrictions are lifted there is evidence of pent-up demand in the markets. However, the recovery is fragile with high levels of uncertainty which is affecting prediction beyond one or a maximum of two months ahead. This is affecting cancellation rates as we discuss below.
Direct booking growing faster and faster
In the 2020 report on hotel distribution we had observed that Website Direct bookings were one of the fastest-growing channels, however take into account that gross reservation volumes are much lower. We cover some of the reasons for increased Website Direct in section IV below.
In 2021, we saw a continued increase in revenue generated by the direct channel. In Europe, almost one third of the total reservations are produced by Website Direct and, in APAC*, direct became the leading channel, both in 2020 (37%) and in 2021** (41%).
This surge was mainly at the expense of Expedia, which showed equivalent negative numbers in both regions: 7% market share in 2021** for Europe versus 10% in 2020 and 6% in 2021** versus 8% in 2020 in APAC*.
Pushing the analysis to June 2021, we even observe that for this later month, in Europe, Website Direct is the first and, so far, the only channel in which booking levels are back, to the pre-pandemic levels.
Website direct surpasses Booking.com in APAC*
In Asia*, direct became the main source of revenue already in 2019, and it increased its market share even more solidly in 2020, reaching the all-time best result of 41% in 2021**.
We believe the higher number of local travellers since the beginning of the pandemic may explain this peak of direct reservations in the last 15 months, as proximity tourists made the majority of traveling in ’20-’21, and they are, usually, less likely to book via an OTA, preferring direct channels.
OTAs are losing market share
In our previous hotel distribution study, we had already pointed out how OTAs were experiencing a loss in market share in both Europe and Asia-Pacific. Even though they remain, in both markets, the dominant source of online revenue, this negative trend persisted in 2021.
Especially in Asia*, OTAs’ market share decreased by four points, going from 60% in 2020 to 56% in 2021**. If we look at the last five years, OTAs market share in Asia* dropped by 14 points (from 70% to 56%).
Read the full story here
* Excluding mainland China
** January to May 2021
