The temple of Priceline may be the one of the biggest in the world of online travel today but TripAdvisor is moving fast to play catch up. Its recent acquisitions point to a very clear objective: to become the travel brand that people turn to first to plan every step of their journey. The recent acquisition of La Fourchette to break into restaurants, followed more recently by TripAdvisor’s snapping up of tours and activities provider Viator cements the point.
But the game is hotting up as Priceline’s copycat move into restaurants with the acquisition of OpenTable highlights.
We’ve been doing a bit of crystal ball gazing to find out where the new frontiers are:
1. Expect more copycat acquisitions to build one-stop travel shops
So what could be next? Who will be the one to move first into, for example, ticketing for theatre, sporting events or concerts? Will it be TripAdvisor, who seems to be on a roll? It’s anybody’s guess, but what is clear is that the move into less niche areas of travel makes perfect sense. By acquiring a restaurant and tours and activities arm for last-minute bookable experiences, TripAdvisor is now much closer to being that one-stop travel shop. It was a clever move: most leisure travellers, after all, only complete two to three transactions a year, but they might eat out in a restaurant a few times a year, and they certainly prefer to book a tour in trip. And if they do this all within the TripAdvisor app, then it will be in a much better position to market its bigger ticket items like hotels and flights to customers too.
The next frontier in online travel is to become the brand that users turn to for all their requirements, says Josep Bernat who was formerly chief revenue officer for e-Dreams ODIGEO Group and now CEO of Nuk Consultants. That means offering more and better products/services and more often, to drive loyalty. “It’s a sign of the metasearch market maturing,” he says.
2. Expect marriages across the continents and consolidation in the hotel sector in Europe
Aside from snapping up niche players to control the customer journey, we can expect to see consolidation and very possibly between companies from different continents. “The market is very liquid right now and consolidation seems a natural progression,” says Bernat. Knowing that by 2030, tourists from APAC will lead all regions of the world in total departures and travel expenditures, a US-APAC or European-APAC marriage looks increasingly likely.
For smaller companies that have cornered their home market and want to speed up growth in new territories, acquiring or merging with a local company for on-the-ground expertise makes sense. But smaller more nimble companies – especially those with a mobile focus – look ripe for acquisition too by one of the OTAs.
“Many OTAs with a mobile problem – and that’s all of them – are looking at companies like ours with a view to joining their well-known brand with our ‘mobile first’ platform,” says Joe Haslam, chairman of Hot Hotels.
We can also expect to see some changes in the European hotel space which is still far more fragmented than the US. While niche hotels with a unique proposition and operating in a unique environment will remain just that, for small chains with ten to 20 hotels, consolidation seems a likely next step.
3. Where the customer is looking matters more than where they are booking
Wherever your customer is, you want your brand to be top of mind. One of the reasons we see metasearch engines, and OTAs for that matter, positioning themselves to sell a wider range of more products is mobile. And more and more people are reaching for mobile devices. But it’s much harder to reach the customer you want to reach in a mobile world which is much more private, says Bernat.
So while the metasearch engines with an interest in travel, and this includes Google, insist that they do not take bookings, for the consumer the lines are increasingly blurred. What is happening is that you see advertising getting much more competitive and cross-platform with many metas making their first moves into television advertising. Take the ‘Stay at a Trivago hotel’ campaign: how many consumers know that Trivago isn’t a hotel chain? Many firms, like TripAdvisor and Google, are now working on functionalities especially within the mobile space so that the customer thinks they have never left their site.
But the hotels are also fighting back. As an example of what one big global brand is doing to give the guest more control over their stay (and control the guest more), Hilton WorldWide has taken lessons from the airlines and launched an update to its HHonours application. This, which is expected to be rolled out in 650,000 rooms in 4,000 hotels and 11 brands by the end of this year, will allow guests to pick their room from a floor plan.
4. Technology – and this includes the field of payments – is the name of the game for the coming year
Where the OTAs like Expedia and Priceline have managed to maintain and entrench their market position is by investing heavily in innovative technology. Edmond Mesrobian, CTO at Expedia Inc, who will be speaking at TDS North America, recently shared how the company continues to make the most out of big data and doing so using a test-and-learn approach. But it doesn’t have to be that way. “If hoteliers were using the right pricing systems in principle there shouldn’t be a place in the market for OTAs,” says Bernat.
Many established travel brands are still using legacy systems although that is changing, as ClubMed’s Jérôme Hiquet, VP of Marketing, North America & VP of Marketing & Sales, Mexico points out.
According to Bernat it’s absolutely critical to understand and invest in systems that allow you track and identify what’s important to the market and to react quickly. “Having the right technology is name of the game for next year and it’s going to be very complicated for hotels that don’t have the right systems, procedures or people in place to make an offer and manage different channels at different pricing,” he says.
Where we can also expect to see developments is on the mobile payments front, which is still a market that needs shaping. There will be a natural consolidation, says Bernat, so that a workable global solution emerges.
5. Google and Apple: the shift to small data and the internet of things
Many people in the industry believe the real threat to the travel industry is going to come from the big media houses like Facebook, Apple and Google.
Bernat doesn’t agree, arguing first that Google’s business model is increasingly being called into question, and could even be reaching its limits. “Around 33% of searches for adverts that companies are paying for are not being seen by the user,” he says.
He also argues that Google – and all others in online travel – is being challenged by the continued shift towards mobile use, which makes it more difficult to reach the customer. “There is a lot of pressure on Google to sustain and maintain its business model,” he says.
While Apple is a different beast altogether, both these tech giants are moving into ‘small data’ and the ‘internet of things’, which will draw them closer to customers in the home environment – think fridges and TVs- through a mobile device. Why? Because it’s easier to monetise that online travel which is a lot of hard work
For a global view of this ever-shifting landscape join Eye For Travel at one of their upcoming events in New York (Sept 11-12), in Berlin (Oct 1-2) or in Amsterdam (Nov 24-25) where big names and big innovators in online travel will be rolling into town.
