Towards the beginning of the COVID-19 pandemic, when the virus’s effects were first starting to be felt on a truly global scale, the outlook for hotels was bleak. Bookings plummeted across the world as countries and regions shut their borders and enforced strict lockdowns, closing businesses and restricting movement. Timings varied based on the virus’s spread, but hotel bookings everywhere pretty much ground to a halt. It wasn’t good news, but it wasn’t hard to understand: people weren’t booking hotel rooms.

Now though, with many countries partly or fully emerging from lockdown and the effects of vastly different government responses to the crisis becoming clear, the picture is a much more varied one. Hotels in some countries are gradually approaching ‘normal’ booking volumes; hotels in others bounced back to full occupancy much faster, but are now suffering under second lockdowns; in others, hotels are yet to show any signs of meaningful recovery at all.

And while the slow uptick in international travel is undoubtedly a boon for hotels, it presents its own challenges as countries with very different public health approaches and infection rates have to negotiate the risks of their citizens travelling between them. As we saw this week with the UK’s snap decision to quarantine arrivals from Spain, guests are taking on a significant risk when they choose to travel abroad - and it’s entirely possible for a sizeable proportion of a country’s hotel reservations to be wiped out in one go.

So how are hotels meant to navigate the rest of 2020?

It’s clear that nobody has all the answers in this situation. But as every day goes by, we’re gathering more data and are able to understand more about how booking behaviour is adapting and the ways in which the strongest markets are responding to these fluctuating circumstances. We work with our partner hotels to understand their markets and make the best possible decisions guided by data for their direct booking strategies.

Different source markets mean very different recovery profiles

Indexed hotel revenues since the beginning of 2020, split by region

Despite having been hit first by COVID-19 and technically being furthest ahead in the recovery, the Asia-Pacific region is still suffering the greatest year-on-year revenue impact out of these three core regions. North America (here taken to mean the US, Canada, and Mexico) meanwhile saw the most rapid bounceback in booking revenue, but this was quickly reversed in June as the public health impact of lifting restrictions began to take hold.

Source market breakdown by hotel region

Looking at the source markets for each region provides further insight into these divergent recovery profiles. North America generates the vast majority (83%) of its booking revenue from the domestic market, meaning it is least dependent on the decisions of foreign governments for its booking volumes. But it is also a stark example of the long-term dangers of opening up local economies too quickly, as any progress made so far is now being wiped out by rising infection rates restricting travel.

Conversely, while many countries in Asia-Pacific have got infection rates well under control and people are able to move relatively freely, hotels are still pacing well below last year’s booking revenues as they have the smallest ‘safety net’ of domestic travellers. The combination of government-mandated restrictions and general fearfulness around long-haul air travel means that international - and particularly intercontinental - hotel bookings are likely to be significantly reduced for the foreseeable future.

Divergent fortunes within the US

Indexed hotel booking volumes from January 2020, split by selected states

Despite suffering fairly similar fates towards the beginning of the pandemic, states within the US are now experiencing stark differences in fortune. Some of the states that bounced back fastest from their initial collapse in booking revenues - Florida, Texas, etc - have since experienced sharp declines as infection rates continue to rise steeply.

In contrast, the six states of New England - Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont - are significantly outperforming the rest of the US, with booking volumes in July twice as high as the previous year.

Mobile on the rise

Mobile bookings as a proportion of total booking volumes

Something we’ve been tracking particularly closely at Triptease is the rapid growth of mobile bookings. The share of revenue from mobile has doubled since the beginning of 2020 in one of the clearest examples of how COVID-19 impacts consumer behavior. It can be assumed that with increased numbers of people working from home, furloughed or laid off, screen time on mobile is increasing in comparison to desktop and people are getting increasingly comfortable with making purchases on their phones.

Searches (left) and booking revenues (right), split by device

We can see that now mobile accounts for half of all booking engine searches, up from 35% towards the end of last year. But mobile searches are increasing at a faster rate than mobile booking revenues, suggesting that the mobile booking experience for many hotels isn’t performing as well as it needs to. People want to book on their phones, not just look - evidenced by the fact that generated over 50% of its bookings on mobile back in 2018.

Looking doesn't always mean booking

A significant proportion of hotel marketing budget tends to go on attempting to convert the website traffic that has shown intent to book - and for good reason. Having run a search (either on metasearch or the booking engine) is typically a strong indicator of booking intent, and therefore the return on investment of marketing to this cohort tends to be high.

But unsurprisingly, COVID has complicated things. With market restrictions changing almost daily and speculative searches at an all-time high, there are no guarantees that the same proportion of people searching for your hotel have intent to book (compared to pre-COVID).

Conversion rate from search to booking, split by region

The conversion rate of booking engine searches has dipped across every region, with EMEA seeing the steepest fall. And while conversion rates for hotels in APAC have recovered to their pre-COVID levels, NORAM and EMEA are lagging around 30-40% below their usual rates. That means that searches alone are not as strong a predictor of booking intent as they were before COVID, which in turn means the optimization of marketing returns is harder for hotels.

At Triptease, we've offset this risk by building in additional logic to our bidding models for Meta and Retargeting (such as an open/closed markets filter) and refining our ‘propensity to convert’ assumptions with our Data Science team.

Need more data?

If you’re interested in accessing more data specific to your market, you can contact your Direct Booking Coach at (Triptease clients only) or reach out to us at (if you aren’t currently working with Triptease).