Travel and tourism marketing: Rate now trumps brand in the hotel business.

The latest Expedia survey confirms that travelers are willing to trade in their trusted hotel brands for lower room rates.

For the first time in 18 years of measurement, less than 50% of travelers in a recent survey say that brand is important to them.

Mike Reichartz, VP Market Management at Expedia spoke at the recent International Society of Hospitality Consultants conference about the dramatic changes in the travel business.

He restated some familiar statistics that  startle the senses when delivered by a person in Mike’s position:

  • Travelers now say that rate and free internet are more important than brand when choosing a hotel.
  • In Mike’s words, “As price becomes more transparent, brand clarity becomes more urgent.”
  • As a result, “There will be no pricing power in the market in 2011. Value is vogue.”

2011 will continue to be a year where leisure travelers trade down. But business travel should be up.

  • Half of the vacations last year were weekend trips.
  • “The biggest challenge in the hotel business is recapturing that lost night.”  (Incidentally, Mike said the average year-over-year length of stay was down 4.5% in August.)
  • Travelers in the US, UK and EU are trading down while travelers in Australia and Japan are trading up.
  • 34% of Expedia’s largest corporate clients said they expect to allocate more funds to travel budgets next year, while 4% said they would reduce budgets (Last year it was 13% and 9%.)

The online landscape continues to change dramatically.

  • 20% of all travelers are now using meta search engine sites like Kayak.com and yapta.com to research the best prices on flights and hotels.
  • Private sales and collective buying sites like jetsetter.com, sniqueaway.com and tripalertz.com may change booking habits even more.
  • As an example, Mike cited Groupon, which reached $1 billion in internet-generated revenue faster than any previous company.

One internet travel planning statistic has remained constant in recent years: The number of people planning trips online has stayed at a constant 56-57%.

And for the 10th straight year, respondents ranked being able to check the lowest fares and rates as their top reason for using the internet to plan their trips.

Some things never change.

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2 Responses to Travel and tourism marketing: Rate now trumps brand in the hotel business.

  1. […] Travel and tourism marketing: Rate now trumps brand in the hotel business. […]

  2. inexpensiveplace to stayinzagreb…

    […]Travel and tourism marketing: Rate now trumps brand in the hotel business. « 5 to 9 Branding[…]…

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