Higher Yields

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hatever segment of the travel business you're in, the challenge you face is to sell as much as you can at prices that will allow you to make a profit.

That challenge has become far more difficult in the Internet era as a growing number of consumers scour the Web for the lowest rates.

But notwithstanding the rise of self-service Web bookings, travel agencies continue to produce billions of dollars in sales each year. Moreover, these sales are likely to be at rates that produce higher yields and profitability for suppliers.

A recent illustration is provided in the Oct. 7 issue of Travel Weekly. Art Pfenning, research director for Northstar Travel Media, our parent company, looked at the results of TravelClick's eMonitor, which tracks the sale of hotel room nights and the resulting revenue. The survey compares sales through travel agencies with those made on the Web.

The findings show that hotel sales through travel agencies produce substantially higher average daily rates than those made on the Web.

In the second quarter of this year, room-night sales by agencies were made at an average of $119.48 compared with $93.76. Put another way, travel agencies were generating 27% more per-booking revenue for hotels.

It's no wonder that major hotel and resort chains continue to pursue travel agency business with vigor.

The survey also showed that the most robust sector of the hotel industry is the luxury category.

Of the four categories, luxury, upscale, midscale and economy, the luxury segment was the only one to show an increase in the number of room nights sold in the second quarter.

While all four segments continue to show declines in average daily rate, the luxury segment had the smallest decline with its average rate at $281.47.

A large portion of that high-rate business moves through travel agencies, one of the key reasons why agencies account for higher average rates overall.

With all the attention that is focused on Web bookings, smart suppliers still recognize the importance of producing yields that are profitable.

And they also recognize that travel agencies are the most powerful conduits to higher-yield business.

Get More!
Look for additional details on this article in the Oct. 7 issue of Travel Weekly.

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