Kalibri Labs’ U.S. Hotel Industry Performance Overview (HIPO) reveals that the digital channels, Brand.com and OTA, as a percent of the total bookings continue to accelerate, while Property Direct declines. Given 10 months of consecutive growth, the Brand.com year-to-date (YTD) bookings are up +7.7% compared to the same period last year and are growing faster than OTA (+7.1%) as a portion of the actualized demand. As of October YTD, Brand.com accounted for 24.5% of actualized demand while OTA represented 16.3%.

Both the Brand.com and OTA channels cost more per booking than Property Direct bookings, impacting the overall U.S. COPE Percent1, which represents the percent of revenue retained after booking costs are removed. On average in October, the Brand.com channel booking costs were $9.21 per occupied room, OTA booking costs were $22.43, and Property Direct booking costs were $2.61. As of October, the U.S. COPE Percent was 91.9%, a -0.24% decrease year-over-year. “Effectively, hotels spent 8.1% of their top-line revenue in October on direct booking costs, excluding Sales and Marketing expenses,” said Cindy Estis Green, CEO of Kalibri Labs, “this decline in COPE percent has been a trend over the past several months, led largely by the continued shift to more costly online channels.” (Booking costs include channel and transaction fees, retail and wholesale commissions, loyalty fees, and amenity costs.)

For the total U.S. as of October YTD, growth in loyalty member bookings and Brand.com bookings appear to be related. In fact, U.S. YTD loyalty contribution through Brand.com was 88.6%. However, total loyalty contribution across all channels varied throughout the top 10 markets displayed in the Kalibri Labs October HIPO report, ranging from 47.9% to 58.8%. Washington DC actualized 58.8% of total room nights driven by loyalty members (+2.8% higher than the US), with 26.0% of all bookings made through Brand.com (1.5% higher than the US), and almost nine out of ten Brand.com bookings (89.8%) flagged as loyalty members (1.2% higher than the US). 

Across the top 10 markets, lead time varied significantly. As of October YTD, New York City (NYC) hotel guests booked 2.5 weeks earlier than guests in Houston. While in NYC, guests booked more than 5 weeks prior to their stay, Houston guests booked less than 3 weeks prior to their stay. Within NYC, Upper Upscale hotels drove the lead time, such that hotel guests at Upper Upscale hotels made their reservations an average of 40 days prior to their stay.

1 – The proportion of Guest Paid revenue kept by a hotel after all booking costs have been deducted. COPE % is COPE Revenue divided by Guest Paid Revenue.

2 – Contribution to Operating Profit and Expense – Revenue per available room based on the total room revenue paid by guests, after transaction-specific direct reservation costs have been deducted (i.e.: retail commissions, wholesale commissions, channel costs, TA amenity costs, and loyalty investment). 

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