“The knowledge gap between hotels and OTAs is the biggest challenge facing our industry.”

Triptease’s new Hotel Heroes programme was launched with the aim of bringing together the most innovative industry voices for the purpose of educating and inspiring hoteliers.

Today we’re speaking with one of our founding members, Dr Jan Sammeck of Deutsche Hospitality, whose recently-published guide to Online Marketing for Hotels is a must-read for hoteliers seeking to maximize the return on their direct booking efforts.

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We spoke to Jan about the trends affecting the travel industry, his predictions for the future of Google and metasearch, and how his previous experience working for an online travel agency has influenced his work at one of the biggest European brands in hospitality.


What do you think is the biggest challenge facing the hospitality industry at the moment?

When I first began working for a hotel group, having previously worked for an online travel agency, I immediately saw a knowledge deficit between hotels and OTAs. Hotels are still predominantly an offline business – they provide a service in the form of beds, rooms and food, and online distribution is just a part of that. In comparison, an OTA is a pure online company, and people who work for them have a different mindset to those who work in hotels.

This knowledge gap between hotels and OTAs is the biggest challenge facing our industry, and is why I decided to publish my book. I wanted to share my experiences to show to hoteliers how online works, what to do and what not to do to be successful in online distribution. People need to ask themselves whether they want to invest in-house or, if not, what external partners would be best for their own purposes. An understanding on how e-distribution systems interact and function is needed, otherwise you’ll waste a lot of money on useless stuff, be taken to the cleaners by vendors and fall behind in innovation.

If you had to give one piece of advice to hoteliers looking to reduce their reliance on OTAs, what would it be?

It’s crucial to understand that everything starts in the hotel itself, from content to rates and availability. You may rightfully complain about OTAs, wholesalers and price parity, but it’s important to remember everything starts at the hotel. It’s your responsibility, but it’s also a huge opportunity to steer things in the way you want them to.

Many hotels see themselves as victims of these developments, but there are mechanisms out there to change things – you just need to make the most of them. You can look at OTA competition and rate parity, but these problems are basically your own ‘fault’. Maybe that term is too strong, but it’s so important to steer things in the right way you want to be. Whether contracting, online marketing, e-commerce, booking engine issues or UX design on your website, it’s in your control.

Why do you think the Hotel Heroes programme is so important within the industry?

Hotel Heroes is so important because until now, there has been no real knowledge centre for the industry to turn to. Whether it’s in the education of people entering in the hotel business, or people who have been working here for thirty years, they’re not prepared for what’s going on in the online world, and most do not have any resources to turn to. Programmes like Hotel Heroes will always be helpful for sharing knowledge and learning from each other, as there is no single established global source that is preparing hotels for the online distribution and marketing.

Dr. Jan Sammeck speaking at the 2017 Direct Booking Summit in Barcelona, Spain

Looking at the industry more broadly – you mentioned wholesalers earlier, and we’ve noticed a lot of hoteliers have been interested in their role within the whole ecosystem. What roles do you see wholesalers playing in the future of hotel distribution?

Personally, I think there is very limited use for the wholesale business model in the online distribution world of the future. However, it’s up to the hospitality industry to decide whether they want to keep wholesale business alive. I don’t think it’s necessary for any hotel – however, certain leisure destinations may have a stronger case for wholesale business than hotels in Berlin or London. Still, even those hotels that have traditionally benefited could very well be better off if they study the fundamentals of online marketing and direct distribution.

Online distribution in a sense is simple – you only have a handful of players that keep websites visible. You have Google, Trivago, Tripadvisor, Bing, Facebook…every website is competing for visibility. Why would I compete with not only Expedia and Booking.com with my hotel website, but enable another load of websites as well? There is the argument about growing business from destinations you cannot reach, but personally I believe that if you’re connected to relevant OTAs, you’re able to cover the entire world – so you don’t need additional distributors. With the right partners, you really don’t need to let wholesalers take a bite of your cake.

Google look like they’re slowly becoming their own online travel agency, and are heavily investing in the industry – what do you think Google’s influence will have on hotels, metasearch and OTAs?

Having watched Google over the past few years, I’m really not surprised to see this happen. If they continue with this growth, it will lead to a decline in relevance for OTAs, as well as metasearch websites such as Trivago and Tripadvisor. Google’s meta product is able to direct traffic to their own booking channel, and websites competing on Google will increase their CPC to remain visible as competition grows.

As a result, advertisements on Google will increase in price, meaning an increase in distribution costs for hotels. Meta is here to stay, and will probably become more important as a channel. When this happens, metasearch will probably come down to one or two websites, and Google will likely be number one. I’m not sure it’s a positive development for the industry, to be honest. While you can acquire more guest data through Google than through OTAs, you’re basically changing the monopoly of Booking and Expedia for another.

With hotels having to fight against two monopolies on either side, what can they do to differentiate themselves?

Regardless of developments, hotels need to aim at strengthening their direct contact with guests – basically, they need to work on brand building. Everything relates to this, whether your website, guest experience or services, and results in the same huge advantage of people coming to book with you without middlemen. This all helps to make a prominent brand, so when people look for a hotel in the future, they’ll go to your hotel directly. In the long run, this is the only solution to reduce dependency on Google and OTAs.

In an article earlier this month, IHG stated how they were happy to work closer with OTAs because they thought that ‘brand loyalty’ is slowly fading out, because the short-term nature of the modern internet era means people don’t get to make those meaningful connections with hotels. Do you agree with this?

I believe you need to aim for brand loyalty, otherwise you will create a strong dependency on distribution with just two or three partners. At this point, they can command anything they want from your hotel, because any type of traffic you’re getting is going through them. If hotel loyalty is decreasing, it’s instead a question of whether you can work against it, and if you can deviate from the general trend. Even if some hotels are seeing a decrease in brand loyalty, it doesn’t mean you also need to be in the same trend.

If there’s one thing you can get your peers to realise about the online travel industry, what would it be? What do people really need to start doing to keep up?

A lot of the things that the industry does are short-term oriented without a strategic focus. If you want to be relevant five or ten years down the road, hotels need to get smart, and start thinking strategically about how the online travel industry really works.

 

‘Online Marketing For Hotels: The Definitive Guide to Direct Distribution’ by Dr. Jan Sammeck is available to purchase on Amazon now.

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