Global Update
theDisruptors
The Disruptors addresses issues ranging from the impact of emerging booking channels and metamediaries to how to best implement new strategies related to mobile technologies and social media .
AmAzon enters the frAy
It was only a matter of time . Amazon has just announced it is offering a travel product and it will likely become global in scope . Here are a couple of quick questions to ask when approaching this new opportunity .
What audience will Amazon pursue ? Based on your hotel ’ s target market , you will have to decide if the kind of customer Amazon will bring is a good fit for your product and pricing model . For instance , if they plan to start with Amazon Prime members , a subscription service similar to a hotel loyalty club , offerings may not be subject to rate parity limitations . This may provide you the opportunity to test different rates . However , if the program will be open to anyone visiting Amazon , traditional rate parity restrictions will likely apply and limit your ability to test the market . Ask for a profile of the customer base so you can determine if it matches your target market .
Is this a sustainable source of new customers ? New channels that promise new customers can be encouraging if those customers are likely to return . However , if Amazon plans to offer a flash sale or fire sale model these customers may be unlikely to return without deals . Cindy Estes Green , KaLibri LabS , Potomac , Maryland
the next WAve
In late October , Alibaba , China ’ s largest ecommerce company , launched Alitrip , which will become a fully electronic OTA for the Chinese lodging market . Weeks later , news broke that Amazon was reportedly planning to enter the hotel-booking space .
In the near term , options beyond the duopoly of Expedia and Priceline can ’ t be a bad thing . More competition means better pricing . But longer term , if these tech giants are selling rooms at a
magnitude larger than traditional OTAs and on their terms , the bargaining leverage of brands , and worse , independent hotels , will be even less .
That ’ s not even mentioning the potential end-to-end travel experience Google is capable of offering , or TripAdvisor ’ s Instant Booking feature . The next wave of disruption will be driven by these tech giants and not traditional OTAs .
Amazon will need two things to make this work : consumer engagement and hotel inventory . They ’ ve already got the first part , but can they get the second ?
If I were an hotelier , I ’ d work with these retailers so they don ’ t become expensive discount channels . Otherwise , they ’ ll find rates and inventory from other places — like Expedia — and become just another source for room nights . But if hotels and brands build a marketing partnership that is mutually beneficial , it could be . Patrick Bosworth , DUETTO , San Francisco
Airbnb : more thAn just A pretty ( cheAp ) room
Many hoteliers have rationalized airbnb ’ s entry into the lodging space as noncompetitive . as the industry learned from vacation rentals and OTas , ignoring groups that fulfill demand at scale is a bad idea . airbnb is already at scale . airbnb has a-tier investors , smart management and a sizeable valuation . its next funding round will value the company at over US $ 13 billion . That puts the firm slightly below Starwood ( US $ 14.2 billion ). airbnb hosted over 120,000 guests in brazil during the World Cup . On one single night in July 2014 , airbnb housed 330,000 guests ( 20,000 in Paris alone ). Lodging advisors / STr estimated airbnb represents 11.1 % of New York City ’ s room inventory ( 5.4 % of room night demand ; 2.9 % of room revenue ). airbnb disrupts the industry with a lower price point and by personalizing the guest experience . To compete , hoteliers must ask “ why “ guests are staying and organize service delivery standards to offer unique guest experiences – just like airbnb . Robert Cole , rOCKCHEETaH , Menomenee Falls , Wisconsin
20 HOTELS January / February 2015 www . hotelsmag . com