The Race for the Customer and the Connected Trip
The concept of the “connected trip” has been in circulation for a couple of years now and is generally met with enthusiasm. And why wouldn’t it be?
NB: This is an article from OTA Insight
What could be better for the consumer than a simplified booking experience, one in which technology helps them to move seamlessly from one element of their trip through to the next? Imagine that digital journey taking them from searching for and booking their room all the way through to checking out of their hotel, with information that could impact their stay—such as delayed flights—reflected across these connected systems and updated in their itinerary on the fly.
Such an experience could reduce guest stress and increase mental wellbeing. And happy guests equal happy hoteliers, so it’s in the latter’s interests too.
Previous years have seen many attempts to implement the connected trip, but outside of some peripheral solutions, most attempts have failed to make a significant impact. However, this year might be different.
Online travel agents (OTAs) stand to gain more than hoteliers by eating into their booking revenue if the latter don’t gain the upper hand with a more mobile, technologically savvy path to purchase in 2020; and, with poor results in 2019, OTAs are certainly motivated to do so.
With the two major OTAs, Expedia and Booking Holdings, joining Airbnb, Amazon, and Google in a race to deliver the connected trip, these companies clearly see the potential of this route to increased consumer loyalty.
So what should hoteliers do to capitalize on any significant developments this year?
Looking Back on Recent Years
In essence, it’s an extension of the age-old question of whether hoteliers should work with OTAs or focus on driving direct business. For most hoteliers, it’s more a question of how to work with OTAs and what their direct activities that run alongside these relationships should look like.
Few hoteliers would cut OTAs off altogether; rather, it’s about creating the right mix—driving direct in times of high demand or from segments that can easily be reached, and saving marketing budget in favor of OTAs’ wider reach in periods of lower demand and for harder-to-reach audiences (in return for a cut).
But it’s not just commission that’s at stake; undercutting through the disparity remains a huge problem for hoteliers, and new systems that could create certain levels of opaqueness surrounding the cost of individual elements of trips would only add to that.
When it comes to maintaining parity, choosing a reputable OTA is critical. For example, last year Marriott signed an agreement with Expedia to handle its dealings with wholesalers, one of the major root causes of disparity, through rooms being sold on to non-contracted OTAs at discounts big enough to be marked up still below a hotel’s BAR.
Caution and diligence are, as ever, the watchwords.
What the Future Holds—and How to Respond
Who will win the race? OTAs are motivated. However, the likes of Google are in possession of huge databases of customer data, which can be used to shape offerings.
Either way, hoteliers would be wise to put commercial strategies in place ready for working with OTAs and tech companies when their connected systems spring into life—whenever that might be.
Hoteliers can also compete. To do so, focus on the guest relationship. While platforms have data, hoteliers have real-world interactions. Such knowledge can be used to segment intelligently and better market offerings. This grants hoteliers more control over their demand and means they can pick and choose partner platforms.
Forward-thinking hoteliers who innovate and harness emerging technologies, focusing their efforts on platforms such as mobile, will win the digitally empowered customer of today from both competing hotels and OTAs. The future is bright for hoteliers who take the time to focus on business transformation as much as growth in the coming year.
Even if the connected trip doesn’t come to fruition in 2020, other technology opportunities will. Focus on connected thinking to be in a position to capitalize on whatever emerges.