Beware Google and 9 things for OTAs to look out for in 2013
From the rise of Roomkey to Google’s foray onto the travel scene, online travel agencies face many challenges. However, rather than worrying about suppliers that are attempting to go direct or how exciting start-ups are going to shape up, existing online intermediaries should focus on refining their offering.
OTAs must go much further with their offering. No longer should they be serving up mundane information such as transactional data, destination, price and so on. Instead they should inspire people with ideas that are personalised and relevant as well as delivered via the screen (PC, smartphone or tablet) that consumers prefer.
EyeforTravel’s Ritesh Gupta talks to Matthew Harris, executive general manager - EMEA & Americas, The Wotif Group who outlines 10 areas that OTAs should be thinking about in the coming.
1. Mobile and Tablet Mobile bookings will continue to grow as a channel. These devices are already used more than fixed desktop in the searching, investigating and dreaming stages of ‘pre-buying’. With tablets, in particular, many developments have made it a lot easier for customers to transact. In some countries like India, for example, the 3G network is relatively new. With tablets and smart phones being so cheap, we will start to see whole generations not even purchasing a laptop or PC. Similarly, the birth of the 4G network will give people more desire, time and confidence to transact ‘on the move’ rather than waiting until they get to a fixed machine. It won’t just be last-minute bookings either, the mobile solution will in the next two to three years overtake the PC as the preferred tool on which to book, particularly as sites increasingly have mobile friendly versions.
2. Search This is becoming more socially important rather than being only keyword focused. OTAs should look to compare how keywords and search trends are very different on mobile or tablet vis-a-vis desktop. Google Hotels is now alone pushing into the UK and NZ markets and could be the biggest competitor of OTAs going forward.
3. Payment –The popularity of single use credit cards, designed to cut out fees for hoteliers, should not be overlooked. Also, looking at Expedia’s Traveller Preference programme, there is the importance of giving the customer a choice in how and when they pay for their booking to consider. Expanding on payment is instant pay (with smartphone). It is very important from the hotel perspective that they adapt accordingly. Moving forward, OTAs will also need to provide a full range of payment options such as adaptability to Passbook.
4. The importance of same day booking With the further emergence of HotelTonight and more players this is a profitable business. If a room is empty, and the hotel has an easy platform on which to load that room and display it to the masses, there is a huge potential marketplace there. Consumers are motivated by big discounts as well as the necessity for a bed for the night. I believe all OTAs will soon differentiate a sales platform for same day bookings.
5. Opaque listingsThese are evolving as the answer to negate parity strict hoteliers not giving exclusive deals. Hotwire, the first site of purely opaque listings, and now also Secret Escapes show there is consumer appetite for the bargain, and they don’t care where they are staying as long as it’s perceived to be great value for what it is. Other OTAs continue to push secret listings, some more than others (ie: Lastminute Secret Hotels, Wotif’s Wot Hotels). With parity policies not disappearing anytime soon, neither will opaque listings.
6. Closed user groups There is a growing trend to to send membership exclusive deals via electronic direct mail (EDM), even if that ‘membership’ might be a few million people. The user groups won’t just be subscription generated but also geo-location fenced, taking advantage of IP-Passthrough technology. This will mean an OTA can assure a hotel that they will only push out a specific promotional rate to customers in Australia, or everywhere in Europe other than the UK and so on.
7. Google Flight and Hotel SearchThe big question: how will the industry continue to react? This has just gone live towards the end of November in New Zealand and The UK. It remains to be seen whether the hotels will see reaching the end user direct as such a benefit, if the cost to them is higher than the margin they pay to the OTA. Technically, it’s very difficult for Google to build an API that gives them all eventualities of inventory requests and it will take them an awful long time to do this. We haven’t really seen any evidence as yet of hotel only clients being pleased or not by the level of business and the CPC cost effectiveness as it appears most of the bookings are being driven to the OTA channel albeit through Google HotelFinder, so as yet it appears the threat to OTA’s is not huge, and isn’t diluting business – though admittedly it is early days.
8. Roomkey One of the innovative features behind RoomKey is that the founding chains agreed that when a booking is denied due to non-availability, the site will automatically serve up alternative choices. This effectively means that when someone is searching for the Hilton, they may end up at The Marriott. However, it works both ways so the chains involved see it as a positive risk.
9. New markets Hotels & OTA’s should constantly watch new trends. For example Russia (see EyeforTravel Russia: The curtain opens on the travel show) and Brazil have seen 20%+ growth in outbound travel for the past three consecutive years. How many OTAs and hoteliers have translated their sites into Russian and Portuguese, and set up an SEM strategy in those countries? The same applies to China of course.
10. Channel Managers and full service portals like Vertical Booking, Fast Booking, Open Hospitality and so on are becoming very powerful and collectively driving strategy trends in terms of their distribution.This in turn gives independent hotels a lot more power and know-how in terms of how they manage their distribution and will mean that certain OTAs can’t be so aggressive with small chains or independents, as their distribution will be spread more intuitively and evenly.