TechnologyDistributionStudy Shows Book Direct Campaigns Strengthened Growth of ''

Study Shows Book Direct Campaigns Strengthened Growth of ‘’

Rockville, Md.—An updated Kalibri Labs report released today—Book Direct Campaigns 2.0: The Costs and Benefits of Loyalty 2018—provides conclusive evidence that the loyalty member campaigns of major hotel companies, which first launched almost three years ago, have either strengthened or stabilized the growth through ‘’ websites while OTA channels have either held steady or decelerated. Both channels continue to grow, but ‘’ websites have consistently generated 50 percent more bookings on average to U.S. hotels than OTA channels.

The first research on the subject, released in Fall 2017, examined the period of May-December 2016—immediately after nearly 10 of the major hotel chains initially launched loyalty member campaigns. Book Direct Campaigns 2.0: The Costs and Benefits of Loyalty 2018 provides a follow up with new data to uncover how trends have evolved in the time since the last analysis.

“These results are positive news for hotels as more reservations flow through online channels,” said Cindy Estis Green, Kalibri Labs CEO and co-founder, who authored the report and led the analysis. “We felt it was important to follow up on our last study to assess whether the initial results were a ‘flash in the pan’ and if discounts and other costs offset net revenue gains through the increase in bookings. The real question is whether the loyalty programs can move the needle and this study provides some great insights on that issue.”

The newly released study examines 80 million transactions from 19,000 hotels, all of which had loyalty programs in play in the market over the past three years. The updated data and analysis presented in Book Direct Campaigns 2.0 accounts for the variables of discounts and paid search fees that some had suggested would diminish the benefit gained through the channel. With these factors taken into account, the loyalty member rates still delivered a 9 percent premium on ADR net of booking costs.

Details of the four primary takeaways from Book Direct Campaigns 2.0 include:

Loyalty members represent the largest customer base for branded U.S. hotels

The loyalty base for the hotel industry chains studied in the report experienced rapid growth of 30 to 40 percent year-over-year from 2015 to 2016 when the book direct programs were first introduced. The pace has stabilized but continued at a healthy rate into 2018 that is still two to five times the rate of growth from the pre-book direct period (before 2016). has grown at the same rate or faster than the OTA channel

When compared to the contribution to occupancy from the OTA channel, the channel has maintained its growth, running approximately 50 percent greater than the OTA bookings. The initial campaigns showed a rapid acceleration in 2016 and for the last two years, that pace has stabilized and maintained a steady gap to OTA growth.

Net ADR for loyalty bookings remains higher than Net ADR for OTA bookings

The ADR for member rate/loyalty bookings still reflects a solid premium compared to OTA bookings after acquisition costs are removed and has grown to 9 percent in 2018, up from 8.6 percent in 2016. Even when tested for weekend/weekday and lead-time differences, Net ADR for loyalty bookings was higher in total, and for each chain scale.

Loyalty members yield better results for hotels and a better guest experience

A hotel’s loyalty base serves as a foundation of business to which a hotel can supplement with groups, locally sourced, and other ad hoc demand drivers to reach its targeted occupancy. When calculating the benefit of a recurring guest coming three times after an initial visit and comparing that to cycling through four different OTA customers, the average net benefit to a hotel is approximately $65 per loyalty member (using industry averages). This economic advantage, in combination with enabling more personalized service, gives the hotels with a large recurring loyalty base an advantage over a third-party base and can contribute to a more tailored guest experience.