Priceline Is Most Appealing Online Booking Site

Consumers respond well to naming their own price as online travel agency Priceline surges 8% to grab the lead in the tightly grouped Internet travel service industry. While there has been considerable consolidation among online booking sites, many continue to operate as separate brands. With an ACSI score of 81, Priceline tops the three big names under the Expedia umbrella despite smaller gains for Expedia-owned Travelocity (+4% to 78) and Orbitz (+3% to 77). Nearly lockstep with its other major brands, Expedia’s namesake booking site holds steady at 77.

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Smaller websites, grouped together as “all others,” tend to place at or near the top of the Internet travel industry, which makes Priceline’s ascendency in 2016 noteworthy. Nevertheless, the range of scores among all travel sites is typically quite narrow and the industry overall suffers from lack of differentiation. This year, the aggregate of smaller websites straddles the Expedia-Priceline divide with a score of 79 (+1%), perhaps reflecting the group’s conglomeration of brands that include Expedia’s Hotels.com and Priceline’s KAYAK.com and Booking.com.

The real competition for online travel agencies may well be the websites of hotels and airlines. According to 2016 ACSI data, hotels offer a better online experience than Internet travel agencies. Airline websites, meanwhile, are going head-to-head with Internet travel sites, matching the online industry’s overall customer satisfaction level.

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Both airlines and hotels are working harder than ever to boost loyalty and encourage direct booking. While online sites bring customers to these industries, the commissions they charge reduce net revenue per customer. Given the strong website satisfaction scores for both hotels and airlines, the convenience of one-stop shopping alone via online travel sites may not be enough to keep customers away from direct booking.

Travel Pulse: Priceline Is the Most Satisfying to Travelers, According to Study »

ACSI: Internet Travel Companies Outdo Airlines, Hotels »

Would Guests Prefer Starwood Under Marriott Umbrella?

The merger of Marriott International and Starwood Hotels & Resorts would create the world’s largest hotel operator by room count, but would customers win if the merger completes this summer as planned? Marriott has an undisputed record of above-average guest satisfaction in the American Customer Satisfaction Index, occupying the top tier among hotel chains for over a decade. In 2016, Marriott (ACSI score of 80) places a close second to Hilton (81), and its JW Marriott luxury offering leads among brands at 85.

Marriott’s latest move—adding Starwood’s 10 brands to its existing array of 19—could help stabilize the more uneven ACSI performance of Starwood. Or, the merger could put downward pressure on Marriott’s strong customer satisfaction given the pitfalls that often come with blending operations. ACSI data show that most mergers, at least in the short term, tend to depress customer satisfaction. Looking at Starwood’s track record in the ACSI, the company has at times rivaled Marriott for guest satisfaction, but more often Starwood has lagged behind by as much as 6 to 7 points.

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While most Marriott brands pass the threshold for superior customer satisfaction (score of 80 or higher), some show room for improvement—especially AC Hotels, which scores much lower at 74. By contrast, the lowest-rated Starwood brand, Sheraton at 78, outpaces AC Hotels by a significant margin. Americans may be less familiar with the AC name, however, as Marriott entered a joint venture to operate European-based AC Hotels in 2011. The brand came into the U.S. market in 2013, with the first AC Hotels by Marriott opening in late 2014.

As reported by Bloomberg, the Marriott-Starwood merger hit a bump this week, with a lawsuit by hotel owners in Chicago and New York regarding a possible violation of exclusivity rights.

Skift: Ranking the Big Hotel Brands and Loyalty Programs by Customer Satisfaction »

Travel Pulse: ACSI Report Finds Hotel Guest Satisfaction Down in 2016 »