In the never ending battle between hotels and online travel agents, the first quarter of 2015 saw OTA gaining valuable ground. Already, the distribution channel which includes players like Expedia, Hotels.com, et al experienced the largest jump in bookings ever. While Brand.com sites saw 7.1% year-on-year gains, OTAs more than doubled that number with a 15.1% increase according to Eye for Travel.
As these monsters continue eating up smaller competitors through mergers and acquisitions, hotel brand.com marketing efforts are struggling to keep up with the spend afforded to the Expedias of the world. As a matter of fact, even the OTAs themselves are spending a huge amount of revenue on aggressive marketing strategies in order to compete with each other.
Following their merger with Orbitz, Expedia now boasts around 60% of the US market share according to a report by STR Global. This leaves a much smaller piece of the pie for other American online travel sites, but U.S. anti-trust regulators appear to be less concerned about individual markets, instead taking a more global focus where Priceline dominates.
However, one of Priceline’s largest subsidiaries, Booking.com, has been experiencing struggles of its own as the battle for rate parity rages on in Europe. While it remains to be seen, rate parity could eventually be done away with for good, giving hotels the ability to set their own prices for any channel, reflecting the cost of commissions paid. Ideally, this means that travelers once again would view individual brand sites as the best place to book, leaving the door open for a brand loyalty Renaissance.
Read the full article at: Hotel Online