Marriott International reported a steep increase in direct online bookings in the third quarter, with Marriott CEO Arne Sorenson attributing the surge to the successful rebranding of the company's loyalty program.
"Our guests are increasingly booking online," Sorenson said during a call with investors on Tuesday. "Our direct digital channels leveraged the popularity of Marriott Bonvoy and offered the lowest cost per reservation. Those channels -- Marriott.com and Marriott mobile -- accounted for 32% of our room nights booked in the third quarter, [which was] over 400 basis points higher year over year."
Over the same period, the company reported, online travel agent (OTA) bookings declined nearly 100 basis points year over year.
According to Sorenson, progress on the direct-booking front comes as consumer perception of the Marriott Bonvoy loyalty program has improved significantly. Launched earlier this year, the rebranding effort, which combined the group's Marriott Rewards, Starwood Preferred Guest and Ritz-Carlton Rewards platforms, was initially met with some backlash.
"Social media feedback about the program has become decidedly favorable," Sorenson said. "Marriott Bonvoy is on a roll. Global room revenue from Marriott Bonvoy members is up 12% year to date over the last nine months, and members contributed 52% of systemwide room nights, a 320-basis-point increase year over year."
Over the past nine months, he added, Marriott Bonvoy membership has grown by 12 million, to roughly 137 million members. Notably, around 40% of that increase came from the Chinese market.
Sorenson said the company would continue working to limit its dependence on the OTA channel.
"The most significant thing we've done with the OTAs, and not just with the new agreements, is that we have been more aggressive in essentially dialing back the business we'll take to OTAs when we project we'll have high occupancies," explained Sorenson. "We've had that right for a few years, but we weren't using it as aggressively as we're using it now."
For the third quarter, Marriott reported RevPAR growth of 1.5% worldwide, including a 1.9% RevPAR gain outside North America and a 1.3% RevPAR rise within North America.
Third-quarter revenue, however, was down 23% from the same period last year, to $387 million.