Online travel agencies are regaining market share in hotel bookings

After a sharp decline in the share of online travel agencies in the structure of hotel bookings due to Booking.com leaving the Russian market, their positions began to recover. In the third quarter, they accounted for 33% of total sales. More than half of the bookings in the segment come from two major players – Ostrovok.ru and Yandex Travel.

In the third quarter of 2023, 33% of hoteliers’ sales came from online travel agencies (OTAs), which is 5 percentage points more than a year earlier, Bnovo calculated. At the same time, the share of direct sales of hotel operators decreased from 72% to 67%. Travelline estimates the total share of OTAs in the structure of hoteliers’ sales in July-September at 53% versus 48% in January-March. Bronevik.com executive director Marina Goncharenko says that the number of bookings through OTAs in January-October increased by 73% year-on-year.

The departure of Booking.com from the Russian market, which formed 57% of all hotel bookings in Russia, led to a redistribution of channels. Hoteliers managed to increase the share of direct sales two to three times (see Kommersant on March 23). The departure of Booking.com was sudden; many hoteliers initially did not consider offers from other OTAs for cooperation, recalls Bnovo Operations Director Alexandra Naumova. It took time to establish connections and conclude agreements with other sites. The OTAs themselves were forced to strengthen their operational capacity.

General Director of MTS Travel Vadim Melnikov believes that Russian OTAs initially lost the competition to hotel sites because they were not sufficiently known to users, but over the course of a year and a half, a lot of resources were invested in promotion. “If last year large companies spent 2 billion rubles on advertising, then in 2023 – 5 billion rubles,” he says. Managing Director of Ostrovok.ru Daria Kochetkova said that OTAs work as an advertising platform that tourists turn to when they want to book accommodation. If a guest has never been to the city, it is difficult for him to trust the information on the hotel website, the expert believes. Vice-President of the Russian Union of Travel Industry Dmitry Gorin is also inclined to believe that bookings through OTAs are often perceived by tourists as safer.

Alexandra Naumova points out that after the departure of Booking.com, interest in working with hotel reservations increased: more Russian OTAs appeared on the market, which gave consumers the opportunity to choose. But more than half of the market, according to Bnovo, is still occupied by two players. In the third quarter, Ostrovok.ru accounted for 29% of bookings through OTA, Yandex Travel – 23%. Travelline calls these same players leaders based on the results of 12 months.

In third place, according to Bnovo estimates, is the Sutochno.ru service (11%), then 101hotels.com (9%), Bronevik.com/MTC Travel (6%) and Avito (5%). The volume of the latter increased eightfold over the year, the company adds. The dynamics are likely explained by Avito’s refusal in the summer of 2023 from the bulletin board format in the short-term rental housing segment in favor of an online booking service. The company did not promptly respond to Kommersant.

Yandex Travel Product Director Evgeniy Abramzon calls the existing market competitive for OTAs. Their average commission is 15–18% and is unlikely to decrease significantly. “For an additional commission, online platforms can provide promotion services,” he says. Daria Kochetkova notes that there are really many players on the market now: “In other circumstances, many companies would not try and invest in the development of their own travel directions.”

Managing partner of Ivashkevich Hospitality Stanislav Ivashkevich sees a restrained growth in the share of Russian OTAs in the sales structure of hoteliers: their total share is still far from those of Booking.com. In his opinion, it will be possible to talk about a more noticeable effect only next year.

Alexandra Mertsalova