The Rise Of Hotel Comparison Websites

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Since the likes of Lastminute and Priceline were launched in 1998 hotel comparison websites have grown by leaps and bounds, eating up hotels’ market share and pushing traditional high street agencies into a supporting role within the travel industry.

Websites like Triporia, Priceline, Expedia and others can access and compare hotel inventories, obtaining discounted rooms on the dates specified by travellers. Since its early beginnings hotel comparison sites have increasingly grown in importance and today hold a significant market share in the travel sector. Sites like TripAdvisor, Expedia and Priceline attract massive numbers of visitors on a regular basis. According to comScore, which tracks web traffic flow, monthly visitor traffic for the top three hotel comparison sites has been measured at a combined total of over 59 million visitors. In March 2013 Samsung announced that it was pre-installing TripAdvisor and its content on their latest smartphones, pointing to the dual importance of mobile and comparison sites.

The European online travel market held 37.7 percent of the global market in 2011-12 with 9 percent year on year growth. Online sales in Europe increased from $118bn in 2010 to $141bn in 2012 and are predicted to rise still further to $180bn by 2016. In considering the importance of comparison sites we can take note that the five biggest operators were responsible for 60 percent of online travel agent (OTA) bookings in Europe. In addition, hotel comparison sites are expected to grow in popularity in Europe in the coming years as a larger proportion of the market has is made up of small, independent hotels, in contrast to the U.S. where larger hotel chains dominate and where travellers are more likely to go to hotel websites directly.

The recession hit the hotel industry hard with bookings for leisure and particularly corporate visitors falling dramatically. However, hotel occupancy rates have consistently recovered since the nadir of 2009. In that year 45 percent of rooms were empty on average in the U.S. However this fell to 38 percent in 2013, according to Bjorn Hanson, divisional dean of the Tisch Center for Hospitality, Tourism and Sports Management at New York University. Another sign of the return to rude health of the sector is the increase in room rates. According to the Hotel Price Index, average hotel room prices around the world have increased by two percent during the first half of 2013 compared to the previous year. This has continued a trend that began at the start of 2010.

The growth of hotel comparison sites as major players in the travel sector has been underline this year by the manner in which some of the largest operators have engaged in acquisitions over the past year. In March 2013 Priceline bought Kayak, the aggregator that specialises in airline and hotel searches, for $1.8m while in the same month Expedia took a 61.6 percent equity stake in Trivago, a German hotel site, for $632 million.

Some have questioned how neutral these sites may be once they are integrated into the larger corporate entities. Edward M.Woo, senior research analyst of digital media for Ascendiant Capital Markets, said that it would be difficult to maintain impartiality between the once independent sites. Woo predicts the rise of other, more neutral search engines.

 

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