TECHNOLOGY : WORKING WITH OTAS
Some cause for optimism comes from the current recovery of the lodging industry , as well as forecasts of a future influx of international demand . Experts hope these trends , in conjunction with falling travel agent and GDS fees , will enable hotels to secure commission levels with OTAs that make sense .
“ Once the regular travel agent commission goes down , it immediately affects the OTA commission ,” Starkov says . “ Business is good ; that ’ s what emboldens the industry against the OTAs .”
Discount dilemma One of the pitfalls of the OTA-hotelier relationship is the potential for the erosion of rate and brand integrity . Experts caution that careful revenue management is in order , to ensure rooms are being sold at pricing that makes sense .
Large chains are having success with a balanced approach . At Accor , Expedia and Orbitz have helped drive U . S . -based traffic in the company ’ s hotels , according to Jean-Luc Chrétien , executive vice president of sales , distribution and loyalty strategy . Booking . com and ( parent company ) Priceline ’ s strengths , on the other hand , have been to send traffic to regional hotels outside of main cities .
“ We are investing a lot in hotel general manager training on how to best use OTAs and understand their model , and we have also trained our revenue managers to monitor more closely their channel performance ,” Chrétien says .
Others stress the importance of developing consistent rates across all channels . According to STR , 2011 ADRs ranged from a low of US $ 74 when booked through OTAs to US $ 115 per night on brand . com sites . As online pricing becomes increasingly transparent , such discrepancies only drive the reliance on bargain channels .
“ There is no argument to explain to a customer why he should pay a different price for the same product on one website than on another ,” says Thomas Adler , global director of e-commerce for Meliá Hotels International .
The ‘ anti-OTAs ’ While some industry insiders aim to improve hotel-OTA relations , others hope to circumvent the arrangement entirely . New hotelier-centric search and / or booking providers — including RoomKey . com , mybesthotelrate . com and globalhotelexchange . com — have emerged as an alternative to the OTAs , with significantly lowered commissions as a major selling point to properties .
“ Our ability to allow the consumer to book directly with the hotel adds an enormous piece to it ,” explains John Davis , CEO of RoomKey , a venture among several hotel companies . “ The consumer can continue to get their frequent guest points , and if you want to make a change , you can pick up the phone and call the property .”
Davis says Room Key ’ s commissions are “ 50 % to 60 % of what Expedia ’ s charging ,” and since the inventory comes directly from properties , users have access to last-room availability , which OTAs do not provide . Still , experts wonder if a relative newcomer can compete with a content-rich giant like Expedia .
“ Why would somebody abandon Expedia and go to Room Key ? It ’ s exactly the same rate , and Room Key ’ s very simplistic , while hotel bookings are not ,” Starkov says .
Content still king One internal solution to the OTA dilemma is strengthening content on brand . com sites . Consumer reviews are now nearly mandatory , thanks in large part to TripAdvisor . com , which boasts 50 million unique visits per month . However , since TripAdvisor doesn ’ t transact on its own , those visitors simply read the reviews , then book elsewhere .
Although some hoteliers may cringe at the idea of displaying reviews on brand . com sites , it ’ s an area where hotel sites
We introduced with great success TripAdvisor ratings on accorhotels . com . This gave us a better ranking on search engines and strong positive recognition from web users . – Jean-Luc Chrétien , Accor
www . hotelsmag . com April 2012 HOTELS 57