The on-again, off-again relationship between hotel companies and online travel agencies has been the cause of so much head scratching and hand wringing over the years, but in the end, the two sides usually end up finding a way to work things out.
Panelists on the “Two decades of love and hate: OTAs” session at the recent Hotel Data Conference shared their experiences and observations of the evolving relationship between hoteliers and OTAs.
Early on the relationship, hoteliers thought it was like pushing the easy button and new business would come out of the air, said Susan Guimbellot, VP of revenue and channel strategy at Hospitality Ventures Management Group. However, record occupancy levels and rising costs started challenging the bottom line, she said, and they realized it wasn’t just this magic additional incremental business.
“It’s trying finding the nice balance between ‘How can I engage those guests and get them back to me directly?’ and ‘How do I get a broader audience of new guests?’” she said. “That’s where I think they play a great role, so it’s about finding that right balance.”
Hotel companies and OTAs had a honeymoon period, said Klaus Kohlmayr, chief evangelist at IDeaS Revenue Solutions, but they’ve settled in and now have a more mature relationship. Some hotels do need different forms of distribution that they don’t have access to, and OTAs provide that access.
Hoteliers want to have their product on the shelf when a customer goes to convert, he said, and the reality is OTAs convert better than many of the other channels or distribution opportunities for hotels.
Hoteliers know how to better manage the relationship now, he said.
Combating OTA loyalty
The idea behind direct booking is that it should come in at a lower cost of customer acquisition, said Andrew Taymans, VP of asset and revenue management at GF Management, and that is still up for debate. That has involved a discounted rate to buy loyalty back, he said, which comes at a cost.
