Industry Update
Opinion Article 4 June 2014

Hotels and OTAs can enter a new era of collaboration, not a war

Hotels and OTAs are entering a new age of collaboration to ensure that their customer’s journey right from booking on the demand generator’s portal to the stay at the hotel and beyond is a happy and great experience.

By Mike Kistner, CEO of RezNext

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The playfield is finally leveled. Facilitating this is the advanced real-time distribution technology creating a transparent and automated process of inventory, rate, booking and booking confirmation flow.

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Without real-time advanced distribution technology, it is a blame game. Hotels blame

OTAs for over bookings and cost incurred with putting up a guest when there are no rooms. OTAs complain to hotels about lack of insight into inventory and customer modification not being captured properly.

Ultimately both the players are affected with their brand image being tarnished.

In a collaborative approach, hotels are connected real-time with the OTA – real-time

rates, inventory and all packages are made available to the OTA.

The OTA has a better choice to offer their consumers. The booking received at the OTA

site also flow into the hotel system automatically helping hotels automate their room reservation process.

A real-time booking confirmation is also passed onto the consumer adding credibility to

the transaction on the OTA site. It's a win for all involved, hotel, OTA and the guest.

A different vision
The new school of thought is also that

hoteliers and OTAs don't have to compete with each other.

Yes, they both are after the same consumer and receiving a booking through an online

travel agent vs. receiving it directly on the hotel website does make a difference to the hotel revenue.

However, it is worth considering that a hotel definitely needs to spend on marketing.

The OTA commission is certainly a marketing spend. A hotel will look for marketing activities offline and online to serve its target audience. OTAs are one such marketing platform.

But, what about the opportunity to maximize revenues through direct bookings? Why

should hotels lose on that opportunity?

The answer lies in customer segmentation. Revenue managers leveraging advanced

revenue management techniques can identify which customers are likely to bring in business through their website and those who would get to their hotel through online travel agents.

It is an age where customer loyalty is almost not present.

But, the opportunity to nurture a segment of customers who prefer great service to lower

price still exists. That is the opportunity hoteliers must leverage.

While a particular section of consumers are constantly looking to grab best deals on the

OTA site, there is also a section of consumers who will research about the hotel and then decide to book either at the hotel website or at the OTA's end.

Consumer choice
As I mentioned earlier, this segment may not

be loyal but are definitely brand conscious and seek better service. Hotels need to focus on directly marketing to this group:
  • Run digital marketing campaigns to drive these guests to your website and capture mindshare with customized promos.
  • As a hotelier you need to engage with these guests on your website, a live web chat is a good option to understand their search journey and quest.
  • Based on your previous promotions, look at what was most profitable to you and lucrative to the customer.
  • With a progressive web booking engine, you can also track where the sales dropped and re-target those guests with special offers.

You now have an opportunity to drive direct bookings from these consumers. You can

offer an extremely user friendly booking experience with real-time rates, inventory and packages published directly from your hotel property management system.

At the same time, continue to spend on your OTA marketing efforts as you also need to

tap into the segment of audience looking to book at the lowest prices. This customer segmentation needs to be revisited and redefined frequently depending on your business performance and customer dynamics.

Collaborative distribution technology has the consumer's interest in heart and hence as

a hotel or as an OTA, you will win the game, together.

Mike Kistner

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