Online Travel Agencies gain market shares in Swiss hospitality in 2010 According to our survey many Swiss hotels worked with Online Travel Agencies (OTA) during times of economic uncertainties and strong Swiss franc trying to gain new customers and to compensate for foreseen losses. This explains the continuous increase of market shares of such platforms in 2010. Nevertheless direct booking channels of the hotels are still dominant sales’ forces. A rough estimation of online sales in the Swiss hotel sector based on data from our survey results in an overall turnover of probably more than 850 Million CHF in 2010 and commission costs of some 90 Million CHF. OTA have significantly increased their market share, from 5.7% in 2008 to 13.6% in 2010. Direct booking channels as dominant sales forces Despite the growth of the OTA, direct booking channels such as telephone, fax, walk-ins, e-mail, Web form on the own website are still dominant for Swiss hotels. The share of these direct bookings decreased between 2008 and 2010 from 75.4 percent to 71.1 percent. On average more than half of all bookings (55.9%) are mediated through electronic channels, but Swiss hotels realize on average only 4.9% of all sales through this channel (this proportion is 8.7% in city hotels). Booking.com, Hotel Reservation System (HRS), Switzerland Travel Centre (STC) and destination management systems (DMS) of local destinations are the most frequently used online channels in the Swiss hospitality sector. Booking.com has a high penetration rate of 90% among members of the hotel association. Three out of four properties say that this platform is important to very important for their sales activities underlining the importance of this OTA in the Swiss market. Since 2003 the University of Applied Sciences of Western Switzerland Valais (HES-SO Valais) in collaboration with the Swiss Hotel Association (www.hotelleriesuisse.ch) has conducted regularly surveys in order to monitor the evolution of sales in the different distribution channels. An online questionnaire was sent to over 2’000 members of hotelleriesuisse in January 2011 and resulted in 244 valid responses.

1. Distribution Channels in Swiss Hotels: Online Travel
Agencies Gain More Market Shares in 2010
Results of an Online Survey Among Members of the Swiss Hotel Association
(hotelleriesuisse) in January 2011
(h t ll i i )i J
Roland Schegg, Michael Fux et Thomas Allemann
roland.schegg@hevs.ch / michael.fux@hevs.ch / thomas.allemann@hotelleriesuisse.ch
February 2011
1

2. Executive Summary (I)
• Direct booking channels (telephone, fax, walk-ins, e-mail, Web form) are still
dominant for Swiss hotels with 71.1% of overall bookings (2008: 75.4%) -> hoteliers
have large control over distribution.
• On average more than half of all bookings (55.9%) are mediated through electronic
channels (e-mail, Web form, real-time booking, GDS & IDS), whereas real-time
booking channels with availability check and credit card payment have a market
share of nearly 20% (booking engine on own Website 4.9% + GDS 1,4% & IDS
13.6%), an increase of 7,8% compared to 2008.
• S l on t diti
Sales traditional channels (30 2%) like telephone, letter or fax and through
l h l (30,2%) lik t l h l tt f d th h
tourism organizations (6,2%) tend to decrease respectively to be stagnant.
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3. Executive Summary (II)
• Booking.com, HRS and destination management systems used by tourism
organizations are the most frequently used OTA/IDS in the Swiss hospitality sector.
• Booking com has a penetration rate of 90% For 75% of the hotels this platform is an
Booking.com 90%.
important to very important distribution channel and seems to have become the leader
in online sales in the Swiss hospitality sector.
• A rough estimation of online sales i th Swiss hotel sector b
h ti ti f li l in the S i h t l t based on d t f
d data from our
survey results in an overall turnover of probably more than 850 Million CHF in 2010
and commission costs for online channels of some 90 Million CHF (out of 160 Mio in
total).
total)
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4. The Study
• Objective: Monitoring of booking trends on different distribution channels in the
Swiss hospitality sector.
• Research instrument: online survey
• Administration: Over 2000 hotels have been contacted in early January 2011 by
e-mail, all members of the Swiss hotel association (hotelleriesuisse). Relaunch
( )
of the survey end of January 2011.
• Response rate: 244 replies -> 12%
• Similar studies have been conducted already in the past: 2003, 2005, 2007,
2009 and 2010
4

5. Distribution Channels in the Swiss Hospitality Sector 2006-2010
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
Telephone
Walk-ins
E-mail
Booking form on Website
Real-time booking on hotel website
IDS
GDS
2006 (n=100)
Travel agencies
2008 (n=184)
Tour operator 2009 (n=198)
LTO 2010 (n=211)
RTO
NTO (STC)
Hotel association
Chain/affiliation
Event organiser
Conference organiser
5 Facebook

6. Distribution Channels in the Swiss Hospitality Sector 2002-2010
.0% 10.0% 20.0% 30.0% 40.0%
Tradit. channels (telephone, fax, letter, walk-in)
E-mail
Hotel website (form & realtime booking)
Internet Distribution Systems (IDS)
Global distribution system (GDS)
2002 (n=202)
Travel agency
2005 (n=94)
Tour Operator (TO)
2006 (n=100)
Local tourism organisation (LTO) 2008 (n=184)
Swiss Tourism (ST) & Regional tourism
organisation (RTO) 2009 (n=198)
Industry association (e.g. hotelleriesuisse) 2010 (n=211)
Hotel chain & affiliation
Event organizer
Conference organizer
6
Facebook

7. Distribution Trends in the Swiss Hospitality Sector 2002-2010
Distribution through ICT (email,
booking form on hotel website, real-
time booking hotel website GDS, 2010 (n=211)
OTA/IDS)
2009 (n=198)
(n 198)
2008 (n=184)
Online real-time booking (GDS, 2006 (n=100)
OTA/IDS, real-time booking hotel
website) 2005 (n=94)
2002 (n=202)
Distribution through tourism
organisations (LTO, RTO, NTO)
(LTO RTO
Direct distribution (customer-hotel:
telephone, fax, letter, walk-ins,
walk ins,
booking form on website, real-time
booking hotel website)
Traditional distribution (telephone,
fax, letter, walk-ins)
7 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

8. Importance of Online Travel Agencies (OTA) used by Swiss Hotels
0%
% 10%
% 20%
% 30%
% 40%
% 50%
% 60%
% 70%
% 80%
% 90% 100%
% %
Booking.com
Website local tourism organisation
myswitzerland.com / STC
HRS (Hotel Reservation System)
Expedia und hotels.com
0=not used
hotel.de
hotel de
other IDS 1=not important
for bookings
Venere
2
hotel.ch
eBookers
3
GHIX (Global Hotel Index)
Lastminute 4
Travelocity
5=very important
Hotelguide.com
for bookings
Tiscover
Opodo
HostelBookers
Rates to go
8 eBay
B

9. Evolution of OTA use 2008-2010
eBay
Rates to go
HostelBookers 2008
Opodo 2009
2010
Hotelguide.com
Tiscover
Travelocity
Lastminute
Global Hotel Index (GHIX)
eBookers
hotel.ch
Venere
hotel.de
h t ld
Expedia und hotels.com
HRS (Hotel Reservation System)
Website NTO
Website LTO
Booking.com
9 0% 20% 40% 60% 80% 100%

10. Evaluation of booking.com by Swiss hotels
(Source: Schegg & Fux 2010, n=275)
Booking.com is an easy booking tool for the customer
Booking.com
Booking com is a relevant distribution channel in
international markets (brings bookings and visibility)
Booking.com is easy to handle for the hotelier (e.g.
update of availabilities and rates)
Booking.com offers good features for describing the 1=very poor
property on the platform (text, photos, links, etc.)
2
Booking.com has an efficient and professional 3
marketing 4
Booking.com manages the administrative processes in 5
an easy and professional way 6
7 very
7=very good
Booking.com i a relevant di t ib ti channel i th
B ki is l t distribution h l in the
national market (brings bookings and visibility)
Booking.com has an advanced booking technology
Booking.com offers good sales conditions
(commission)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
10

11. Evaluation of Booking Systems of Tourism Organizations (DMS) by
Swiss Hotels (Source: Schegg & Fux 2010, n=181)
The DMS manages the administrative processes in an
easy and professional way
The DMS offers good sales conditions (commission)
The DMS is easy to handle for the hotelier (e.g. update
of availabilities and rates)
The DMS is a relevant distribution channel in the 1=very poor
national market (brings bookings and visibility)
2
3
The DMS is an easy booking tool for the customer
4
5
The DMS offers good features for describing the
property on the platform (text, photos, links, etc.) 6
7=very good
The DMS is a relevant distribution channel in
international markets (brings bookings and visibility)
The DMS has an advanced booking technology
The DMS has an efficient and professional marketing
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
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12. What are your Selection Criteria for Online Travel Agencies (OTA)
resp. Internet Distribution Systems (IDS)?
Relevance of IDS for target segements
Relevance of IDS as sales channel
Marketing power of IDS / presence in markets
Information, presentation of hotel (photos, texte,
etc.)
)
Data maintenance (e.g. interface with PMS) 1=not at all important
2
Booking technology & features 3
4
Costs (e.g. commission) 5=very important
Added value for guest (e.g. guest evaluation)
Back-office efficiency (e.g. biling)
User support (hotline, stats for hotel, etc.)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
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13. OTA/IDS commissions (based on responses from hotels)
Lastminute
Expedia und hotels.com
Opodo Max
eBookers Median
Venere
Average
Travelocity
Booking.com
Booking com
hotel.ch
hotel.de
Hotelguide.com
Tiscover
HRS
Rates to go
HostelBookers
eBay
STC
andere Plattform
DMS
GHIX
0 5 10 15 20 25 30 35
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14. Estimation of Revenues and Costs by Distribution Channel
Revenus
R Revenus
R
2009 2010 Average Costs per
Bookings Bookings (in Mio (in Mio Difference commission distribution
(%) in 2009 (%) in 2010 francs) francs) (2010-2009) (estimate) channel 2010
Tradit. channels (telephone,
0%
fax, letter) 25 23.8 1'062 1'018 -45 0.0
Walk-ins 6.2 6.4 263 274 10 0% 0.0
E-mail 27.4 25.7 1'164 1'099 -65 0% 0.0
Reservation form on hotel
0%
website 8.3
83 10.3
10 3 353 440 88 0.0
00
Realtime booking on hotel
4%
website 4.4 4.9 187 210 23 8.6
Internet Distribution Systems
12%
(IDS) 10.6 13.6 450 582 131 70.4
Global distribution system
14%
(GDS) 2 1.4 85 60 -25 8.6
Travel agency 3.8 2.1 161 90 -72 13% 11.4
Tour Operator (TO) 3.6 2.3 153 98 -55 21% 20.5
Local tourism organisation
9%
(LTO) 2.9 3.5 123 150 26 13.5
Regional tourism organisation
9%
(RTO) 1.2 1.1 51 47 -4 4.2
Swiss Tourism (ST) 1 1.6 42 68 26 10% 7.0
Industry
I d t association
i ti 0.2
02 0.3
03 8 13 4 5% 0.6
06
Hotel chain & affiliation 0.9 1.3 38 56 17 10% 5.3
Event organizer 1 0.8 42 34 -8 10% 3.6
Conference organizer 1.4 0.9 59 38 -21 10% 3.8
total 4'245 4'276 31 157
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15. Use of a Channel Manager
31.8%
• In 2009 only 18% of Swiss
hotels used a channel
No
manager; in 2010 one out of
Yes three hotels used such a tool
tool.
68.2%
15

16. Contact
Roland Schegg & Michael Fux
HES-SO Valais Wallis
Institute of Tourism (ITO)
Swiss School f Tourism
S i S h l of T i
TechnoPôle 3
CH-3960 Sierre / Switzerland
Tel. 027 606 90 04
roland.schegg@hevs.ch / michael.fux@hevs.ch
www.hevs.ch
Bachelor of Science HES-SO in Tourism
HES SO
Swiss School of Tourism (www.est-stf.ch)
Thomas Allemann
hotelleriesuisse
Monbijoustrasse 130
CH-3001 Berne / Switzerland
Tel.
Tel 031 370 43 36
thomas.allemann@hotelleriesuisse.ch
www.hotelleriesuisse.ch
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17. Glossary
CRS Central Reservation System
DMO Destination Management Organisation
DMS Destination Management System (TOMAS Deskline)
(TOMAS,
GDS Globale Distribution System (Amadeus, Sabre, etc.)
hs hotelleriesuisse (Swiss Hotel Association)
HRS Hotel Reservation Service
IDS Internet Di t ib ti S t
I t t Distribution System
LT supplier
LTO Local Tourism Organisation
NTO National Tourism Organisation
OTA Online Travel Agency
PMS Property Management System (Front Office)
RTO Regional Tourism Organisation
SEM Search E i M k ti (
S h Engine Marketing (p.ex. G
Google Ad
l Adwords)
d )
SEO Search Engine Optimisation
ST Switzerland Tourism (NTO)
STC Switzerland Travel Centre (CRS of Switzerland Tourism)
17