What if Expedia, Priceline, and TripAdvisor had their own hotels?
What if there were less need for hotel owners to rely on hotel management companies like Hilton, Marriott, Hyatt, Wyndham, Choice, or IHG?
What if hotel owners just worked directly with online travel agencies, or even Airbnb, instead of paying hefty fees to the big brands or other consortium or marketing groups?
All these “what ifs” certainly seem a bit farfetched and outside the realm of possibility to the majority of the hospitality industry. But if we take a look at what’s happening right now and where the business of hotels is headed, we’d argue that these what ifs could soon become what’s now in just a few years.
In fact, we’d argue that this shift in the relationships among hotel owners, brands, and online travel agencies is already taking place, and we’ll continues to see it evolve even further going forward. And we’re not alone in this line of thinking.
At the Phocuswright Conference in November 2017, Kayak CEO Steve Hafner said, “The big guys in online travel, and I’m fortunate enough to work for one of them, are going to move into differentiation. And that, to my mind, means owning the assets. I would not be surprised to see people moving into the hotel space by actually owning floors or buildings or even chains.”
Earlier in that on-stage discussion, when asked where he sees the next big disruption or innovation in travel taking place, Hafner said: “I think we [in online travel] have all innovated on the service layer, and most of the people in the room are working on the service layers, but the true innovation is going to be actually owning and operating the assets — the airplanes, the hotels, not so much the cars actually. But that aspect is hugely capital intensive, and it’s ripe for some new ideas, and someone will get there. I have a $100 billion, so it won’t be me. If you own and operate the hardware, you can do a lot more on the innovation side than from the service and software layer.”
The ‘Differentiation’ has already begun
In many ways, Hafner’s prediction about the online travel agencies moving more into differentiation has come true, and you see that playing out in their relationships with hotel companies.
