OTAs grab larger share of Marriott bookings

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Last year, Starwood's portfolio (which includes the Westin brand) was more reliant on third-party distribution than Marriott International's, said CEO Arne Sorenson.
Last year, Starwood's portfolio (which includes the Westin brand) was more reliant on third-party distribution than Marriott International's, said CEO Arne Sorenson. Photo Credit: Shutterstock

OTAs increased their share of Marriott International hotel bookings in 2017, but the company expects that a full integration of the Marriott and Starwood loyalty programs will reduce their slice of the pie.

OTAs accounted for 12% of Marriott's bookings last year, up one percentage point from 2016, Marriott CFO Leeny Oberg said during the company's fourth-quarter earnings call Thursday. She added that direct bookings held steady at about 70% of total bookings.

Marriott CEO Arne Sorenson said the percentage rose because Starwood Hotels & Resorts "had a higher reliance on third-party relationships." Marriott acquired Starwood in September 2016.

"The more leisure the hotels' demand base, the higher the third-party contributions," said Sorenson, implying that the Starwood portfolio's percentage of revenue from leisure travel was greater than Marriott's.

Marriott plans to complete the integration of the Marriott and Starwood loyalty programs later this year.

"As the loyalty program gets stronger and the clarity of benefits to loyalty members become clearer, we feel really good about our ability to drive direct bookings throughout the cycle," Sorenson said.

Even though a greater percentage of the company's bookings went to OTAs, hotels' most expensive distribution channel, Marriott said fourth-quarter results were better than expected. Worldwide revenue per available room (RevPAR) advanced 4.6%. Marriott's RevPAR in China jumped 9% from a year earlier, and Caribbean and Latin America RevPAR was up 6.7%. North America RevPAR rose 3.9%.

"The fourth quarter was icing on the cake to a terrific year," Sorenson said.

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