Everyone knows that if you are in the hotel or tourism business, a good web site is important. And that the internet in general can be a valuable part of how you generate revenue. But you may not realize just how important until you take a step back and get some data from the industry as a whole, particularly during challenging economic times.

According to a just-released report from one of the leading hotel reservation technology companies, Internet bookings for the top 30 hotel brands increased by 6.6% in 2009 vs. 2008. Consider that overall, hotel bookings dropped during the very difficult year that was 2009, it is truly remarkable that there was growth in this particular channel (compared to voice, GDS, wholesaler or travel agent channels that many hotels also rely on).

Here are some other eye-opening statistics that illustrate the growing importance of the Internet:

• GDS (the system used by travel agents and wholesalers) hotel bookings of the top 30 hotel brands declined by 3.7% 2009 vs. 2008, and constitute 23.6% of total bookings in 2009 vs. 27.3% in 2008
• Back in 2006, GDS reservations constituted 31.3% of total bookings for the top 30 brands. GDS share has decreased by 24.6% from 2006 to 2009, when it was reported at the 23.6% level.
• Travel Agency Share from Total Travel Market in the U.S. dropped from 41% in 2006 to 33% in 2009
• U.S. Travel Agency Locations decreased by 7% in 2009 vs. 2008. The number of locations has been decreasing at an average rate of 4% every year since 2001, and the number of travel agencies has declined from as high as 35,000 in 1995 to less than 16,450 in September 2009.

In very simple terms these numbers show just how important the Internet has become as a revenue producing strategy for hotels. Clearly, even in – especially in - tough times, a well executed Internet strategy can generate revenue, and usually at a ROI rate much higher than that of other marketing and sales channels.

Not all on line channels are equal

But, and it’s a big BUT: not all online channels are created equal, at least as far as your bottom line is concerned. Yes, spending and bookings on-line have increased, but especially in tough times, many hoteliers resort to deep discounting and a rush to get more booking from popular on-line travel agencies(OTAs) – which can be a deadly combination. OTAs like Expedia and Travelocity produce bookings, no question. But at what cost? Their commission structures can leave you with net rates of up to 40% less or more than your standard rack rates. You may be filling rooms and it’s touch to not want that kind of help to improve occupancy rates (especially if you are in the condo-hotel business, as many properties are in TCA, and those pesky owners want to see such things), but are you making money? (And are those pesky owners making money?)

Let’s go back to the survey:  In 2009, 70.9% of online bookings came from the direct online channel (i.e. the major hotel brands’ own websites), while 29.1% came from the indirect online channel (the OTAs). This constitutes a significant increase of the contribution from the OTAs compared to 2008, when 75.2% of online bookings came from the direct online channel, while 24.8% came from the OTAs.

So while hotels maybe getting more on line bookings, it’s important to look at specifically where these booking are coming from – and how much they are costing you.

The best approach is always the direct channel: driving people to your web site to complete a booking there. Your web site should always have the best possible rate a consumer can get anywhere, and even offering value added incentive exclusive to your web site (or social media channel) is a good strategy to keep people coming back to you directly. Sounds simple, but its amazing how many hotels can get sucked into the OTA trap and become dependent on them.

And the obvious things make a huge difference in improving direct booking on your site: Make sure your specials and promotions are clearly highlighted throughout your site. Make sure people can book easily anywhere on your site. Include toll free numbers, email addresses and live chat options wherever possible. Make sure someone is checking email inquiries all the time – a 4-business hour response time should be the goal.

Your web site should be a glorious representation of all that you have to offer – pictures, videos, testimonials, awards, etc, etc. -  but at the end of the day, it should mainly be a way for people to easily book a stay with you!

There is a cost, of course, in building up the traffic to your web site. We have discussed in previous columns ideas like email marketing, search engine optimization, social media, paid search and other tactics – none of which are free. But in the big scheme of things they provide a much higher ROI than other marketing tactics, and are better for your bottom line that relying on indirect channels like OTAs, too.

I’ll leave you with some words of wisdom from a hotel industry marketing expert, Max Starklov: