Accommodations & Lodging Programs

Few would argue with the statement that among all the various travel industry sectors, the lodging / hospitality industry has long been the biggest and staunchest supporter of affiliate marketing.  The industry’s backing of the travel affiliate distribution channel helps to partly explain why there are a multitude of suppliers large and small aggressively vying for the attention of super affiliates and would-be super affiliates around the world.

Lodging / hospitality related revenue generating opportunities for travel affiliate marketers remains strong today, and most travel and performance marketing pundits believe that the overall economic and industry related market dynamics will drive more lodging suppliers to sell their products through the affiliate channel.

Before we discuss the major lodging players that offer travel affiliate programs, let’s briefly identify and characterize the key sub-segments of the lodging / hospitality industry:

?   Lodging IndustrySmith Travel Research estimated total US lodging industry revenues (room sales only) in 2007 at $139.4 billion. This revenue based is comprised of 47,135 properties (i.e., properties with more than 15 rooms) such as business and leisure hotels, motels, resorts, inns, conference centers, etc, and these lodging establishments in aggregate make available to travel consumers some 4,389,443 guestrooms on a daily basis (Source: D.K. Shifflet & Associates, Ltd).

? Bed & Breakfast (B&B) – This ‘super travel niche’ (a niche that is largely overlooked by most travel affiliates) is estimated to have reached total industry revenue of $3.4 billion in 2006 (source: PAII 2006 Industry Study Data). Additionally, PAII estimates there are more than 20,000 inns and B&Bs in the US, which in aggregate account for a total of 153,200 available rooms per day, and each room representing an average daily rate opportunity of $166.00.

Travel Dividends believes that B&B’s is a great niche for travel affiliates to exploit…if any of our readers have had success in selling traveler accommodations in this niche, we’d be very interested in hearing your ‘success stories’.

?   Casino HotelsMost casino companies operate combined casino/hotel facilities, although there are many players both in the US and internationally that operate only stand-alone casinos.  For our purpose, we will focus only on the casino hotel sub-segment.

Pegging room-only revenues generated by Casino Hotels is a bit tricky, as many hotel casino operators don’t break-out lodging revenue from gaming and other revenue sources.  According to the American Gaming Association, US casino industry revenues rose to $34.13 billion in 2007, a 5.3% increase from the $32.42 billion the industry generated in 2006.  Not surprisingly, the Las Vegas Strip was the most profitable US gambling center, taking in $6.75 billion in 2007, while Nevada as a whole accounted for $11.8 billion in casino revenues.

To put the casino gaming industry into a more global perspective, Datamonitor, the respected European market research firm, estimates that the global casino and gaming industry generated total revenues of $306 billion in 2006. Contrast this number against Datamonitor’s estimated $488.6 billion in total revenue generated by the global hotel and motel industry for the same year! It is also important to note that, contrary to what many Americans may think about Las Vegas being the gambling capital of the world, the Asia-Pacific region is tops for in gambling worldwide (accounting for 53% of all revenues), followed by a somewhat strong second by the US.

We believe that as the current economic recession continues, more Casino Hotels will open up to the affiliate travel channel.  We also suggest that travel affiliate marketers speak with their affiliate network program managers to inquire about whether the hotel casino affiliate programs they offer would be a good product for them to sell.

?  Spas – According to The International Spa Association (ISPA) the US Spa industry revenues increased from $9.4 billion in 2006 to $10.9 billion in 2007.  There are some 18,089 spas operating in the US (approximately 80% of those operating as Day Spas). ISPA estimates that one in every four Americans has been to a spa, and that there are more than 32 million active spa-goers in the US today.

Travel Dividends believes that although Spa affiliate programs remain the least developed of any of the lodging industry sub-segments, they hold tremendous medium-term opportunities for the ‘right’ travel affiliates.  We urge all of readers to explore this niche and determine whether our recommendation makes sense for them.

?  Timeshare – US timeshare sales were estimated to have surpassed $10.6 billion in 2007 (source: Ernst & Young LLP), and as of January 2007, there were about 1,615 timeshare resorts in the US.   These properties and the roughly 4.4 million timeshare owners represented a total pool of approximately 6.5 million weekly equivalent timeshare intervals available to timeshare owners and non-owners alike (source: American Resort Development Association ARDA).

ARDA also offers some revealing demographics about the typical timeshare owner: recent timeshare buyers report a median income of $74,000, versus $81,000 among all owners.  This seems to suggest that more Americans are turning to timeshares, perhaps as a safeguard against the future possibility that inflation may negatively impact – or obviate – their ability to afford a vacation, thus locking-in their future annual vacations at a fixed-cost.

? Timeshare Resales – Many consumers are also turning to the secondary market to purchase their timeshare properties. These timeshare resales are mutually beneficial for both the buyer and seller; the owner is provided with a solution to unload their unwanted vacation property while the buyer can avoid paying the upfront costs and commissions of purchasing wholesale through the resort. According to SellMyTimeshareNOW, buyers can expect to save up to 50% off what they would pay at a resort when dealing directly with another owner.

?  Vacation Home Rental – According to PhoCusWright, the US vacation home rental market accounted for nearly $24.3 billion in rental revenue and more than 333 million available unit nights in 2007.  Additionally, this is a fast-growing super travel niche, with the US online vacation rental market expected to reach nearly $4.7 billion, up from $2.8 billion in 2007.

Vacation home rentals often provide a superior value to traditional hotel / resort accommodations for consumers, both in terms of property characteristics and amenities, as well as price.

?  Hotel Aggregator Portals / Bed Banks – Unlike the other sub-segments listed above, Hotel Aggregator Portals and Bed Banks do not own the physical lodging assets. Rather, they represent a very large (and very profitable) distribution channel that many hoteliers, innkeepers and resort operators around the world depend on to market their properties (both when space is tight as well as when looking to dump distressed inventory). Hotel Aggregators and Bed Banks typically focus on discounted hotel rooms, and most visitors to these sites are looking for ‘deals’.

Travel Affiliates of any stripe should consider working with Hotel Aggregator Portals and Bed Banks, particularly if the Affiliate focuses on last-minute travel, specific travel destinations, or life style or experiential travel.

As you can see, these sub-segments represent a diverse group of revenue opportunities for travel affiliates.  With that in mind, in the following sub-sections, we list and provide a summary of some of the top players in each category.

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