Data Insight: 3 and 4 star hotels convert twice as well as 5 star

Hotelchamp's Data Insight: The latest independent research and industry benchmarking, straight from the Hotelchamp data science team.

What the data says

A hotel website’s conversion rate is the percentage of visitors to the website that complete a booking, or ‘convert’. A high conversion rate is indicative of a successful direct booking strategy – it means people want what the hotel is offering and they’re able to easily book via the website.In our constant effort to improve website conversion rates, Hotelchamp data scientists frequently analyse a range of hotels from around the world to understand more of what drives conversion.In a recent sample of 446 hotels, Hotelchamp examined the average conversion rates of 3, 4 and 5 star hotel websites. Whilst 4 star hotels converted marginally better than 3 star properties, both had a conversion rate that was double that of 5 star properties.

What does this mean?

Whilst the statistics for 5 star properties are markedly lower, they are not surprising. After all, most 5 star hotels don’t only sell overnight stays.Many 5 star properties across the world also contain luxurious spa facilities or illustrious restaurants and cafés that draw visitors who are not necessarily guests of the hotel. Hotelchamp conversion specialists often see that portions of the website traffic only visit these specific pages on the website, such as spa facilities or afternoon tea.Guests of the hotel influence this statistic as well though – it is unlikely that someone booking a hotel room will also complete a restaurant reservation and spa treatment in the same “session”. A session refers the number of times someone has visited a website – often a particular user can visit the same website multiple times and all these visits are counted as multiple sessions. The reason this impacts the overall conversion rate as seen in the graph is because it is measured by sessions and not users.When conducting in-depth analysis of a single hotel’s conversion rate, Hotelchamp experts find it better to track individual users and how many of these users make a booking as opposed to overall number of sessions. This is conducive with Hotelchamp’s guest-centric approach to website conversion, and gives a more indicative approach of how successful an individual hotel’s direct booking strategy is.

Why is this happening?

Hotelchamp conversion specialists hypothesise that there are additional reasons as to why 3 and 4 star properties convert much higher than 5 stars:

• 5 star properties have a high booking value5 star hotels have higher rates, meaning more price conscious guests are not booking due to the high prices. For example, one of the hotels in the test sample has an average booking value of €5,000.
• People like to look, but not bookThe Hotelchamp 5 star test sample contains some of the most beautiful hotels in the world. This results in high amounts of traffic who are ‘window shopping’ – curious browsers who are viewing the property with no intention of making a booking. This is similar to what you might see in a place like Harrods in London – many come to see the store, but only a few come out with a major purchase.
• 5 star hotels have a greater number of high-end restaurants and spasLuxury hotel websites also often house the web pages for their restaurants and spas. Visits to these pages causes the number of overall websites sessions to increase, but the hotel bookings do not. These visitors are not interested in staying at the hotel, but are more interested in dining or visiting the spa.