BANGKOK, 22 August 2017: Usually experts are telling us what will happen and how to adapt to the every changing travel scene.
This time round, Mike Murray, founder of the hotel booking app Vir.al, predicts what will definitely not happen.
Perhaps a mite tongue-in-cheek, Murray underscores the gulf between hotels and OTAs and the fact that OTAs are happy with the status quo.
1.Big OTA’s will start treating hotels fairly
Unfortunately for hotels, the big OTAs have hotels backed into a corner and won’t change their tactics anytime soon. Even though hotel bookings earn the majority of OTAs’ revenue, the OTAs also think that they have an unshakeable technological advantage over hoteliers. This has led to a one-sided relationship where hotels are not treated as valued partners; instead they are viewed as a commodity that can be easily manipulated and constrained.
The good news is that while this was true in the early days of the OTAs and the Internet, technology has evolved and hoteliers now have the tools necessary to level the playing field. While the OTAs do still have most hoteliers beat in terms of marketing budgets, there are ways for hotels to use the OTAs’ marketing efficacy to their advantage.
2.Airbnb will cease being a threat to hotels
Most hoteliers probably spend a great deal of time wishing that Airbnb would go the way of Uber, slowly killing consumer goodwill and loyalty for the company, it is highly unlikely.
Instead of fighting against Airbnb (or sticking our heads in the sand, pretending that it’s not a real competitor), hoteliers must accept that Airbnb is here to stay and update pricing, distribution and marketing strategies to better compete with the accommodation behemoth.
3.Millennials will stop seeking experiences and simply book based on price
One of the reasons that Airbnb has become so popular, especially with the Millennial market, is they have focused on providing value, as well as a full travel experience. In other words, Airbnb does not simply provide a place for consumers to sleep; they deliver inspiration and experiences that appeal to travellers’ sense of adventure. While inns and guesthouses have existed for hundreds of years, today’s consumer is looking for more, making it essential that hoteliers step up their offerings to more effectively compete.
What does that actually mean for hoteliers?
Hoteliers need to update their marketing strategies to better communicate how their property can help potential guests fulfill a travel experience. Hoteliers need to share content (including images and videos on social media) that illustrate what guests will experience at a property and destination.
Leverage social media (and the power of social influencers) to create online word-of-mouth endorsements from guests; this strategy is particular effective because “86% of Millennial travellers were inspired to book a trip based on content they viewed online.”
Establish yourself as a resource to potential travellers by sharing non-sales, informative content about your destination.
4.Hoteliers will abandon detrimental pricing and distribution strategies
In a perfect world, hoteliers would stop using out-dated, pricing and distribution strategies because they do nothing but harm their bottom line. Here are some examples of pricing and distribution strategies that hoteliers should forego:
Allowing OTAs to sell rooms cheaper (than via the direct channel). This strategy continues to push consumers toward the OTAs and costs properties significant revenue on each booking secured. Instead, hoteliers should be offering value-added perks to guests who book direct in an effort to maintain (or even boost) occupancy, while eliminating the cost of acquisition.
Not using the OTAs at all. It is understandable that hoteliers are frustrated with OTA tactics and high commission rates, but by not listing rooms on the OTAs hotels lose visibility with potential guests and as a result, bookings. Today’s consumers use the OTAs to research what properties exist in a destination and from there, they may visit the property’s website and compare the available rates. If a property doesn’t have a presence on the OTAs, it will miss out on that business altogether.
Only using the big OTAs. As mentioned earlier, the top OTAs have a great deal of the market cornered when it comes to consumer traffic; as such, many hoteliers ignore the smaller OTAs. While this may seem like an easier distribution option, it actually decreases the property’s online presence and results in reduced profits (as many of the smaller OTAs charge a much lower commission rate). Instead, consider using new, innovative online booking channels and apps that appeal to specific consumer groups who are highly active travellers (like Millennials). Some of these new channels also equip hoteliers with tools that can help them to secure more bookings – without charging huge commissions.
Vir.al is a new inspirational hotel booking app and website that capitalizes on today’s social media phenomenon to bring hotels and the valuable Millennial travel demographic together. Using curated, experience-based, destination-specific content, Vir.al enables users to create unique travel experiences, not just book a hotel room in which to sleep, and incentivizes them to increase their social media score in exchange for perks, promotions and status.