The COVID-19 outbreak has upended the way consumers live their lives, including how - and if - they travel.
As such, the travel industry has taken an enormous hit: According to the World Travel & Tourism Council, the global economy is facing a $5.5 trillion loss from the travel and tourism sector in 2020.
Although the pandemic still poses a threat to populations and businesses of all stripes, particularly in the United States, the travel industry is in fact seeing early signs of recovery.
However, COVID-19 has shifted the way people travel and how they make decisions.
According to new research from Expedia Group, as consumers begin traveling again, online travel agencies will play a key role in driving economic recovery for the industry.
This might be an obvious claim to make by one of the industry's largest e-commerce brands - but it is a belief that Expedia says is backed by consumer research carried out pre- and post-outbreak of the pandemic.
The report, Quality Counts: The Value of OTA Travelers, produced by Expedia Group in partnership with research firm BVA BDRC, examines the contributions of OTAs to the U.S. travel and tourism sector, the spending patterns of OTA travelers and the role of OTAs in the hotel booking journey.
The study surveyed nearly 1,900 U.S. domestic travelers prior to the pandemic, from November 2019 to February 2020, as well as additional consumers from June to August of this year.
Travelers are 57% more likely to book their travel through an OTA now than before COVID-19.
The report finds that travelers are 57% more likely to book their travel through an OTA now than before COVID-19, and millennial and Gen X travelers are the most likely to book via an intermediary.
According to the study, the reasons travelers prefer OTAs include to get the best nightly rate (69%), to get the best room (40%) and to compare properties in one location (35%).
More than two-thirds of travelers say value is the most important factor in booking decisions, while two out of three travelers say they use OTAs to plan or research their trip.
In fact, the majority of both domestic (61%) and international (74%) travelers use OTAs to plan or research at least one aspect of their trip, be that hotels, flights, car rentals or activities. Fifty-six percent of domestic and 71% of international travelers that use an OTA in the research and planning phase are likely to also book via an OTA.
Prior to the pandemic, OTA travelers stayed more nights, spent more on-property and generated more revenue for local communities compared to travelers who book direct via hotels.
On average, domestic OTA traveler stay nearly five nights, while direct bookers stay just over four nights. International OTA travelers stay nearly seven and a half nights, compared to seven nights for direct bookers.
The study also finds that, pre-pandemic, domestic OTA travelers spent 16% more per trip than direct bookers. And, despite the idea that OTA travelers want cheaper rates, they spend nearly the same amount as direct bookers on accommodations.
Domestic OTA travelers are also more likely to book higher-end hotels (22%) compared to direct bookers (16%).
Additionally, OTA travelers generate more economic stimulus for both destinations and the supporting communities, spending 12% more on meals and drinks, 27% more on car rentals and 6% more on activities.
According to the report, nearly two-thirds of Americans surveyed in August believe that life will return to “something close to normal” by 2021.
As for when they plan to travel, 23% say in the next one to three months, while 28% expect to travel in the next six months and 22% anticipate traveling in the next six to 12 months. The remaining respondents say they are unsure when they would travel again, though they are keen to.
Summer 2020 saw a rise in car travel, up 20% in June compared to June 2019. For accommodations, mid-market and upscale hotels were down 13% and 30%, respectively, while budget and luxury remained the most popular hotel types.
Travelers are also expressing heightened interest in alternative accommodations, with two-thirds of travelers saying they believe vacation rentals pose a lower risk of exposure to the virus.
Half of U.S. families say that flexible school schedules provide more flexibility in vacationing, with 40% of travelers saying they’re likely to book a “flexcation,” or an extended business and leisure vacation.
As hotels aim to attract travelers in this “next normal,” they need to embrace changing traveler behaviors and shift their strategies to meet evolving traveler needs.
Expedia Group recommends accommodation providers do more to stand out – such as offering flexible cancelation policies or incentives like meal vouchers, free parking or room upgrades – as well as adapt enhanced cleaning protocols.
Additionally, with 70% of travelers saying they want to receive information on amenities prior to check-in, hotels should focus on communication with guests.