1 month ago
 

OTA or hotel direct – putting the OTAs view

The Travel Technology Association, which represents online intermediaries, has hit back at a study from the American Hotel & Lodging Association which highlighted dangers of booking online, other than on the hotels’ websites.

Stephen Shur, president of association dismisses the AHLA campaign as a PR stunt and points to a recent Phocuswright report showing $35 billion in OTA bookings last year compared to $32 billion booked direct with hotels.

“The Federal Trade Commission in a hearing last year testified to Congress that they have no records of consumer complaints on these issues.

We checked with the major consumer groups here in the United States, such as Consumers Union, National Consumers League and others, and these issues don’t even fall on their radar. The only place you’re hearing about hotel booking scams is from the hotel lobby.”

Shur argues that hotels and consumers both benefit from OTAs and that there is no evidence of consumer fraud by suspicious hotel booking sites, as AHLA alleges.

One of the issues highlighted in the AHLA study is that consumers may not be aware of all of the brands under online giants such as Expedia and Priceline.

But, says Shur, Hilton, Hyatt, IHG, Choice and Wyndham all own more than 10 brands each while Marriott owns 31.

“Consolidation in our industry is nothing new and we don’t believe that there is any consumer harm going on.

The fact is that consumers want to shop where they want to shop whether it’s because of familiarity and our members want to make those available to the consumer to make the process as convenient and easy as they can.”

But, if both consumers and hotels benefit from the presence of OTAs in the marketplace, why launch such a campaign?

Well, like everything else these days, it goes back to the value of data collected through loyalty programs, Shur says.

“Hotels are pushing really hard to get people to join their loyalty program because they want to know more about you.

“They want you to be loyal and come back and only shop on their brand sites. In that environment, they are no longer in a competitive environment where they have to compete for your business.

“We’re heading into an era of big data and data analytics and the more they know about you, the better they are going to be able to market to you and offer you products and services that they believe you’re going to buy.”

Shur argues that OTA loyalty programs, which also gather data on members and incentivize loyalty are more beneficial to consumers. 

“The difference for the consumer is that a loyalty program with an OTA still allows them to comparison shop across brands and see all of their options in one place, versus a loyalty program with a single brand where they don’t have those options at their disposal.

It’s too early to determine whether the various marketing efforts will sway consumers whose lifestyle habits increasingly gravitate to online channels and mobile.

Shur says that for leisure travelers, only traveling one-and-a-half times a year, brand loyalty is not a huge priority. Frequent travelers, meanwhile tend to gravitate toward the big chains.

And, there is also the growing class of independent business travelers, entrepreneurs and freelancers to consider.

“I typically refer to those as unmanaged business travelers. These are individuals or small companies that don’t have a corporate travel manager but do travel quite a bit.

“They are very sensitive to price and convenience and time. If you’re a small business owner or entrepreneur, time is money.

“That unmanaged business traveller will continue to grow as our economy goes towards an entrepreneurial-based economy where you have a lot of small business owners traveling on their small dime and watching every dollar. I don’t see that eroding at all, and I think that’s an important audience for OTAs.”

Share on FacebookTweet about this on TwitterShare on LinkedInEmail to someone
 
 
Marisa Garcia

About the Writer :: Marisa Garcia

Marisa Garcia is a guest editorial contributor. She has covered travel technology, design, branding, and strategy for leading publications, including Aircraft Interiors International Magazine, APEX Magazine, AirlineTrends, and Travel+Leisure. She also shares industry insights on her site Flight Chic. Fly with her on Twitter.

 

Comments

Your email address will not be published. Required fields are marked *

  1. Tim Peter

    Nice try, TTA. But it ain’t gonna work.

    Comparing the number of brands six major US hotel chains own to Expedia and Priceline’s dominant market position among OTA’s is comparing apples with oragutans. Those 6 chains control maybe 30% of global room supply and around 20% of global property count (STR says there are 14.5 million hotel rooms and 156,000 properties around the globe. Marriott has 1.2 million rooms–about 8% share– and 6,161 properties–maybe 4% share. The rest are all smaller. You do the math).

    Meanwhile Expedia and Priceline each sell all of that same inventory–and a massive chunk of all the rest too. It’s hard to take the OTA’s concerns about the AHLA study seriously if they’re using a smokescreen about “41 brands” held by six different companies to suggest there’s parity with the market dominance of the Expedia/Priceline duopoly.

     
 
 

Newsletter Subscription

Please subscribe now to Tnooz’s FREE daily newsletter.

This lively package of news and information from Tnooz’s web site provides a convenient digest of what’s happening in technology that drives the global travel, tourism and hospitality market.

  • Cancel