COVID-19 throws OTA performance potential up into the air
The near-term outlook is not positive. Highlighting the YoY volume drop that Booking.com experienced earlier this year, the specialist expected that Q4 is likely to plunge further in light of lockdowns in European markets.
How various countries choose to holiday and what impact this could have on OTAs was also discussed. Germany, France and the UK represent about 40-50% of holiday volumes across Europe. While France has a higher rate of domestic tourism, holidaying in the UK is driven by escaping to better weather: “if somebody can’t go somewhere that’s warm, they just won’t travel.”
The US, on the other hand, faces less movement restrictions and has a much higher percentage of people choosing domestic travel. And this will prove beneficial to OTAs with a greater exposure there: “the importance of the US market to Expedia will weight more domestic bookings into Expedia’s numbers and, at the moment, probably more [of] a robust performance.”
As well as exploring the difference in average daily rates and length of domestic and international vacations, the details of business versus leisure travel were laid out. The specialist also commented on how bargaining power between chain hotels and OTAs could be redistributed if business travel permanently declined post-recovery.
To access all the human insights from Third Bridge Forum’s Booking & Expedia – Pre-earnings Industry Update Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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