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Hoteliers are not powerless: a guide for the digital market
It’s not the “OTA vs. Hotel wars” that we’re in the middle of, writes Kalibri Labs’ Cindy Estis Green; it’s the distribution platform wars. The legacy grip the OTAs have had is slipping and the power will shift, she says. But hotels have their own leverage – and it is significant. Here is her recipe for success.
Is it really a showdown between the OTAs and the hotels? Maybe it’s about who can capture the traveler, not just for the booking, but for the end-to-end travel journey. Look beyond the OTAs, as they are caught in a chokehold with Google today and have an eye toward an even tougher field tomorrow when Airbnb, Amazon, Facebook and Alibaba jump into the fray. Airbnb just acquired HotelTonight. Booking.com is claiming to have more vacation rental units than Airbnb, and Expedia’s Homeaway is not far behind. It’s not the “OTA vs. hotel wars”; it’s the distribution platform wars. And if any hotelier thought it was difficult to compete in a market with the OTAs, the large tech companies will prove challenging as they attempt to redefine how the travel marketplace works. According to a recent PhoCusWright analysis, Booking.com and Expedia spent a combined $10.6 billion in 2018 marketing funds and they are still struggling to survive in the platform driven marketplace. The two OTA giants are selling technology to hotels to facilitate the guest experience and broaden their reach as the direct consumer base gets more diffused and they recognize that booking fees alone won’t sustain their business. Voice-activated assistants and new devices will divert the traffic in the sales path. The legacy grip the OTAs have had is slipping and the power will shift. But hotels have their own leverage and it is significant.
In spite of the daunting scale of these digital behemoths, hoteliers are not powerless. Hoteliers can take control of their position in four important ways that are not available to third-party platforms. These four methods are available to both large and small hotels, but the independents have to find support either in soft brands or in some other technology partner and the partners need to be chosen with care. Few individual hotels will be able to thrive without data and tech support.