Online Travel Agencies (from now on, OTAs) have had a very important development during last years. The process also suppose that hotels have now less power when catching bookings and keeping guests.
If we analyze this subject with more details we will need to study how OTAs commissions’ growth against hotels price’s drop in order to not to lose clients. We also could observe the different reactions applied by hotels to face the menace of OTAs.
OTAs initiatives, on the one side, and hotels alternatives, on the other hand, are both very interesting subjects which have been produced in the context of the global economy’s huge crisis that is taking place since 2007.
OTAs promoted their growth around the idea that they reached a market’s area that was not easily reachable either by hotels or traditional travel agencies. This idea means on the one hand, that is complicated to reach the 100% of occupancy if a hotel only takes into account direct reservations; on the other hand, it means that it is very difficult to reach the 100% of occupancy if we only use one distribution channel.
Then it happens that in many hotels most of bookings arrive from OTAs, who start to asking high (not to say huge) commissions to the hotels they work to (not to say they work with). Hotels stop having enough bidding power because if they stop working with OTAs, they stop reaching 100% of occupancy.
I think that OTAs get their actual relevance in the moment that hotels prefer not to pay attention to some details like Search Engine Optimization or SEO, or developing an easy-to-use booking interface on their webpage. Hotels have started to be worried very recently. It is as well true that it is better now that never.
I recommend these articles to complete this part:
– Sam Weston | Hotels – How to reduce OTA dependency
– Tnooz | Broken down, How OTAs are eating hotel business
– Revinate | 5 Best practices to increase direct hotel bookings
– Hotels News Now | How to mitigate dependence on OTAs
Fighting against our enemy… joining him
I read in Tnooz an article by GuestCentric’s company CEO. To understanding what I am going to speak about, we first need to understand what is GuestCentric.
GuestCentric is a hotel integrated service’s company, that presents a management system that easily manage all distribution channels the hotel works with. You can visit their webpage here.
This means that hotel will obtain the possibility of having their direct reservation’s rates available in the first Travelers’ site. And this is very important, which can become a very interesting option in a short term.
Room Key, easy-to-use interface to book fast
Referring to Room Key, I heard recently about but I would have never treated. Room Key is the result of the collaboration of some of the most important hotel groups: Hilton Worldwide, Hyatt, Intercontinental Hotel Group, Marriott International y Wyndham Hotel Group.
The particularity (not to say inconvenient) is that Room Key is specially made for an English speaking target market. Prices are in dollars and we cannot change the language, fact that in some cases will be considerate as a barrier.
The advantage is that those hotels who work with Room Key have a url that will take potential guests directly to their website.
Finally, the format and simplicity remind the flight search engines.
I recommend the following articles to complete the information about both platforms:
– Hotels News Now | Is Room Key keeping up with OTAs?
– The Economist | Hotel Search Engines| Meet Room Key
– Tnooz | 12 Questions about Trip Advisor Trip Connect you were too embarrassed to ask
– Suite Exchange | Trip Connect and How it affects your business
Conclusion: speed, simplicity and ease of use are essential
We are in the year 2014 and it has been a longtime since Internet became a main business tool. But, as we were saying before, hotels are trying to improve their online reservation systems since not so much time.
21st Century’s guests, apart from many other aspects that we will analyze in future articles, wish to make their reservation fast, simply and easy. Hotels online reservation engines starts now to be like this, but there is still too much path to walk through.
It is necessary for hotels to adapt themselves to this context and it is essential to do so in order to catch new guests and keep the ones we already have. From a hotelier point of view, it is quite hard to realize that in many cases, many guests prefer to trust a tourist agent for making a reservation rather than trusting the hotel they will stay in… just for the general believing that this agent will provide a better rate (thinking that is sometimes true… and sometimes false)
We are hoteliers and we receive guests. Hospitality industry should keep its essentials rather than becoming just a product’s exchange. Hotels will play the main role to protect this way of thinking.
Because at the end of the day, OTAs can have a faster interface… but we will keep the welcoming and the smile.