GOING on a holiday is now a smoother process, with consumers able to explore and book travel and accommodations without having to go through middle-men. The online market for travel is huge.
According to Statistics Brain, 148.3 million online travel bookings are made each year, and they comprise 57% of all travel reservations. This is an issue for hoteliers, according to FastBooking co-chief executive officer Jean-Luc Chrétien.
“The hotel industry is a service business and not a technology business. Hotel companies invested little into systems, with many still using legacy systems based on airline booking systems”.
Paris-based FastBooking, founded in 2000, provides e-commerce solutions to the hospitality industry. Earlier this year, it was acquired by French giant the AccorHotels group.
The rapid growth of travellers looking online for accommodations took many hoteliers by surprise, according to Chrétien. “Hotels, like everyone else, built websites, but no one anticipated that booking hotels would go online so fast,” he said. “It took less than 10 years for people with desktops, and it took less than five years for people to start booking with their smartphones,” he added.
This spawned the online travel agency (OTA), a new “species” within the travel industry that had never been seen before, Chrétien said. “These companies were born online and started to organise themselves to allow consumers to access travel and hospitality options online,” he said.
Having guests book via an online travel agent was accepted by hoteliers, until this started eating into their profit margins. “Hoteliers were okay with this arrangement when OTAs brought in 10% of online business, but when it became 50% of online business, it became more of a problem,” Chrétien said. “That’s when they realised they needed a tool to access technology and help with their web marketing,” he added. The great leveller
While the Internet has often been touted as a great leveller, allowing anyone with access to go up against the goliaths, this opportunity is closing for hoteliers, Chrétien argued. “When the Internet arrived, everyone saw the opportunity for small hotels and chains and it was true because it opened access to the consumer,” he said.
When consumers search online for accommodations from halfway round the world, search engines show results other than the huge hotel chains and groups.
“Consumers can now access small boutique hotels, and bed-and-breakfasts,” he added.
But this space is closing up, and even the smaller hotels are finding it hard.
Now, merely having a website is not enough to attract consumers to stay, with OTAs dominating the search results, Chrétien argued. “The opportunity is closing and becoming more difficult for these smaller players, as even the big hotel groups are entering the space,” he said.