OTAs look elsewhere for growth; or why hotels need to embrace innovation

OTAs Look Elsewhere for Growth: Why Hotels Need to Embrace InnovationTake note hotels and hoteliers – you need to start innovating to drive direct bookings.

Online travel agents are active in their search for new revenue streams amid changing consumer trends, slowing levels of growth and the effect of the recent Package Travel Directive in the EU. Expect heightened M&A (mergers and acquisitions) activity in the short term.

Expedia confirmed phase 2 of their move into urban markets. TripAdvisor growth is coming from non-hotel business and Booking.com is looking into offering not just hotels and flights but “a more holistic travel experience”. You have to give credit for their proactive approach to diversification. ‘Innovate or Die’, as the saying goes, and they are innovating quickly.

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It’s not only the larger agencies that are driving innovation. Smaller ones are investing in brick and mortar agencies. UK based agency On The Beach announced plans to acquire the vacation company Classic Collection Hotels in a £20m deal.

Smaller agencies are under pressure following the introduction of the Package Travel Directive in July. New rules mean more holiday-travel arrangements are classified as packages and as such, travelers are financially protected. Many agencies, especially the smaller ones, objected to the extra cost this would add to their businesses.

The hospitality industry may be forgiven for breathing a sigh of relief thinking that the spotlight is off them, but beware. The attention elsewhere from the OTA’s will not be in your best interests – it will be in theirs!

Larger hotel groups are leading with way with Hilton’s Stop Clicking Around campaign and Accor’s strategy of more brands and entering into unique and new partnerships (i.e. merging hotels and museums). All commendable.

Independent hotels are also embracing innovation and change. First Hotels, in Scandinavia recently unveiled a radical overhaul to their loyalty program. Members now benefit from no blackout restrictions and keep points accrued for up to 3 years. Nordic Choice Hotels is also another innovator who are breaking ground by exploring option of using blockchain (digital currency) to drive direct bookings.

The future is uncertain. But what is certain is the motto ‘innovate or die’.

What is your hotel’s strategy for innovation and the future?

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