![]() ![]() Thus the need for savvy yield management across channels. And once you get into this game, it gets even more difficult to get out, with increasing shares of revenues from this distribution channel. In other words, for independent hoteliers, it’s becoming increasingly difficult NOT to be integrated in OTA, if you want to compete on the same level, specially in urban cities. In the meantime, many hoteliers are still struggling to get their websites right, let alone transactional or mobile optimized… OTAs invest massively on buying keywords to get travelers to shop on their websites, but also showcasing leading-edge user experience, from smartphone to tablet to desktop.Įxpedia’s My Scratchpad feature encompasses this newer trend where online travelers move from one device to another throughout their purchase funnel, making it easy to remember which hotel, airline or attraction to consider. One of the biggest threats is certainly the dependence from hoteliers with OTA, as their share of the online distribution channel grows continuously. Okay, so there is an illusion of choice for consumers – they get to choose from so many different websites… with inventory controlled in all likeliness by one of the two big OTA – and not much space to choose from for hoteliers, in particular the smaller players. #Travelocity scratchpad OfflineExpedia and Priceline invest massive amounts of dollars in marketing campaigns, both offline with mainstream media (TV, billboards) and online through savvy remarketing and AdWords, dwarfing efforts made by mom and pop inns and lodging. But for independent hotels, it’s a whole different story. It is also estimated to now hold 75% market share among US online travel agencies, according to PhoCusWright!įor big hotel brands and major airlines, negotiating with these two majors is happening on a near-equal playing field. With its recent acquisition of competitors Travelocity (280 million dollars) and Orbitz (1.6 billion dollars), Expedia is now back on top, at least in terms of worldwide revenues, with almost 2 billion dollars in 2014. Once the leader of the online distribution field, Expedia has seen its position erode in the past few years, but its financials remain strong. Like a classic OTA, it offers booking possibilities for everything from hotels to flights, cars, cruises and vacation packages, for individuals and groups alike.Īt the other end of the ring is Expedia. ![]() Besides its well-known Priceline brand, and its equally famous tagline “Name Your Own Price”, it also owns, Agoda, Kayak and OpenTable among others. By the end of 2014, it was already clear we were basically in a duopoly position, where two groups are battling it out for dominance in this realm: Expedia vs Priceline.ĭominant in Europe and Asia, Priceline is the OTA that holds the biggest market capitalization, at 64 billion dollars. Read also: Hotels and OTA: from confrontation to collaboration The illusion of choiceĪnyone not familiar with the online travel landscape may be under the impression there are tens, if not hundreds of websites to choose from to book a flight, hotel or restaurant, right? Wrong. And that’s just the thing: commission levels paid out to OTA are high, between 15-30%, and their share of online sales is increasing year over year! In a context where RevPAR (revenue per available room) is a mantra indicator that requires constant optimization, hoteliers turn to reducing costs to increase their profitability. #Travelocity scratchpad freeWhy is that? In a competitive hospitality landscape, hoteliers must fight on a variety of levels, from customer experience where free wifi, hearty breakfast and quality room amenities are expected, to convenient location and, of course, best possible rates. ![]() ![]() Online distribution was not really a priority, then.įast forward to early 2015, and the relationship between hotels and OTA has gone somewhat sour. #Travelocity scratchpad upgradeThe industry was focusing on security issues and improving the customer experience across the board, investing in new properties with five to ten-year programs meant to upgrade facilities. This was particularly true after the events surrounding 9-11. In the earlier days, OTA were seen as a convenient distribution channel where hotels and airlines could sell extra inventory. Expedia was launched back in 1996 while Priceline was founded in 1997. Online Travel Agencies, better known as OTA, have been around for almost 20 years, so we really shouldn’t treat them as a novelty by now. ![]()
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