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Hotel Brand Companies Face Threats From OTAs, Consumer Preferences

by Ed Watkins, Contributing Editor |

Seven trending hotel news stories that will impact your hotel Revenue Strategy.

1. Updating the war between brands and OTAs

The author provides a comprehensive and cogent overview of the ongoing competitive dance between hotel companies (especially the big brands) and the online travel agency duopoly. As he points out, 2016 was the first year in which OTA lodging bookings in the U.S. exceeded total hotel website gross bookings. And they’re growing even faster overseas.

While several factors are working against big-brand efforts to promote direct bookings, he believes this channel will continue to grow — but so will OTA volumes.

But big brands face other possibly most-critical threats, including changing consumer preferences and owner unrest over high customer acquisition costs. While he offers no concrete solutions, he outlines the issues very clearly.

Full story at Hospitality Net.

2. Big Data plus strong visuals equals better bookings

Every hotel website uses visuals to tell its story. But it’s important — and possible in this era of Big Data — to use the right visuals to convince cohorts of consumers to book your property. The value, says the author, is better bookings and better rankings on online travel agency platforms.

Most hotels and hotel companies accumulate lots of data about their customers, so it makes sense to populate websites with appropriate visuals that match the persona of specific consumers who visit. The example in the story recommends photos of a kid’s club or other activities should pop up when a family is looking to book a vacation.

Full story at Tnooz.

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3. The pros and cons of book-direct discounts

Not every hotel owner or asset manager is thrilled with brand companies offering 10% room discounts to members of their loyalty programs. Even though 10% seems cheaper than the 20% or higher that online travel agencies charge for bookings, some industry observers believe there is more to the equation.

Such a discount for anyone who can quickly and easily join a loyalty program can cut a hotel’s revenues, profits and even its real estate valuation. Another pitfall: Shrewd corporate travel managers might start negotiating their programs as discounts off the loyalty rate, not the BAR. And finally, unhappy OTAs could find dastardly ways to punish hotels involved in loyalty discount programs. 

Full story at Hotel Management.

4. Sophisticated RM needed to lure last-minute vacationers

A variety of economic and technological factors have led to a rise in last-minute vacationing by leisure guests. As a result, hotels need sophisticated revenue and channel management systems (and experienced professionals) to capture this business and to optimize room pricing.

Technology has also allowed for an increase in cancellations, which further complicates the revenue management equation. Brand company policies leaning toward more lenient cancellations make the task more difficult for hotels. RMs also need to discern the value of maximizing rate for last-minute bookers versus allowing them to take advantage of direct-booking discounts, which could turn them into loyal customers.

Full story at Hotel News Now.

5. Technology, service need to collaborate to boost loyalty

Despite good intentions, the hotel industry has yet to find a consistent way to marry service and technology to offer each guest a truly personalized experience pre- through post-stay with less manual work. The path to a technology-based method to deliver personalized service that leads to loyalty includes several elements:

  • A need to truly understand guests and communicate with them early, as in immediately after booking;
  • A strategy to before their arrival determine exactly what guests are looking for;
  • A practice of implementing a good pre-arrival email and presenting both upsell and upgrade options at the right time.

Full story at Duetto.

6. Mobile app Lola shifts focus to business travel

Kayak founder Paul English’s year-old mobile travel app Lola has yet to gain traction in the market. Now, the serial entrepreneur behind Lola says he intends to refocus the app toward the business travel market.

While details are sketchy, English says the refocused app will include “the ability for the user to have the freedom to book their own trips, or do self-service, and not just rely on (a travel agent) to curate their trip.” He says the service will aim at small- to medium-sized companies that don’t currently use travel management services. Stay tuned.

Full story at Skift.

7. Luxury travelers are returning to travel agents

In increasing numbers, luxury travelers are turning to traditional travel agents for assistance in planning trips, according to a new survey. Nearly 60% of luxury travel advisors report year-to-date increases in sales, with 55% of them attributing the growth to a boost in awareness of the value of using a luxury agent.

While river cruising leads the list of most-sought-after vacations by affluent travelers, they also favor multi-generational, family, cruise and adventure travel. While these kinds of trips are predominantly booked by Baby Boomers, an increasing number of Gen Xers showed an interest in these kinds of trips.

Full story at Travel Pulse.

Stay up on hotel Revenue Strategy news and discuss industry tech trends in the Hotel Revenue Strategy Leaders Group on LinkedIn.

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Ed Watkins, Contributing Editor

Ed Watkins, Contributing Editor

Contributing editor at Duetto
Ed has been covering the hotel industry for more than 40 years. He was editor-in-chief of Lodging Hospitality from 1980 to 2012. He then joined Hotel News Now as an Editor at Large, until his retirement at the end of 2014. Ed still contributes to several publications and is a member of the advisory boards for the hotels schools at Michigan State and Penn State.
Ed Watkins, Contributing Editor
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Ed Watkins, Contributing Editor

Ed has been covering the hotel industry for more than 40 years. He was editor-in-chief of Lodging Hospitality from 1980 to 2012. He then joined Hotel News Now as an Editor at Large, until his retirement at the end of 2014. Ed still contributes to several publications and is a member of the advisory boards for the hotels schools at Michigan State and Penn State.