Australian holiday parks are gradually regaining control of their online sales distribution channels and reclaiming market share from major OTAs such as Booking.com and Expedia, according to the first RMS Cloud Holiday Park Performance Index.
The results were based on more than two million online bookings made through the RMS Cloud property management and distribution platform between 2014 and 2018.
Holiday park operators increase direct bookings
The performance index shows that between 2014 and 2018, Booking.com and Expedia’s online market share fell from 65% to 55%, a decrease of 15%. At the same time, direct consumer bookings on independent holiday park websites increased by 15%, from 34% in 2014 to a record high of 39% in 2018.
If the current trajectory continues, the index indicates that direct bookings could exceed OTA bookings by 2024.
Direct reservations much more profitable for operators
Cabin revenues made by operators through their own websites are much higher than through Expedia or Booking.com, the RMS Cloud Holiday Park performance index also revealed.
Direct cabin bookings generate an average of 21% more revenue per booking than Expedia and are 10% more lucrative than Booking.com, according to the analysis.
When the 15% average commission charged by OTAs is factored in, the revenue differential between direct bookings and OTAs can exceed 30%. It should be noted that direct bookings often have a cost such as marketing, website development, or price incentives.
Holiday park prices peaked in 2015, but they were mostly down as operators have no pricing power outside of peak holiday periods. As a result, the industry’s profits are under pressure and it is easy to see why operators are placing more emphasis on direct bookings.
The OTA sector a pure and simple duopoly
Despite the strides Australian holiday parks have made over the past 18 months to recoup online stakes, the OTA duopoly of Booking.com and Expedia still holds 55% of online bookings. Booking.com is the market leader, surpassing Expedia 3: 1 in the vacation park market.
These two companies are known to be competitive, but in the Australian holiday park market, Booking.com is the clear leader in OTA and is moving away.
RMS Cloud chief executive Peter Buttigieg said holiday park operators are building better websites and marketing more aggressively to increase their share of online bookings and save on commissions charged by dominant OTAs like Booking .com and Expedia.
“The landscape has changed and the data shows that for the first time ever, OTAs are losing market share to the benefit of holiday park operators,” said Buttigieg.
“It used to be a one-way street the other way around, but now smart operators have lifted their game online and are fighting back, often with great success, showing that given the choice and many consumers prefer to book directly with them. suppliers. “
Other findings from the report found that vacation park stays are getting shorter while average booking times have increased. The average booking in 2018 was made at 39 days, compared to 30 days in 2014.
The average number of nights per stay also fell by 10%, from 2.1 nights to 1.9 nights. While that doesn’t sound like much, when combined with fixed or falling rates, this drop had a significant impact on average revenue per booking.
After many years of allowing overseas OTAs Booking.com and Expedia to dominate online holiday park bookings, Australian holiday park operators are fighting back. They invest in their websites and online presence while delivering direct book deals to consumers, cutting out middlemen, and saving on high commission rates.
In an age of stagnant rates, this is their best option to maintain or increase profits, and for that reason alone, it’s fair to assume that 2018 marks the forefront of a longer-term trend, a trend. which, over time, could eventually see direct bookings overtake those through OTAs.
The full report can be viewed here.