February 1, 2017 · Meisha Bochicchio
Travel Trends For 2017: Hotels Respond To OTA Consolidation & The Sharing Economy
In last year’s report, we dove deep into massive consolidation within the world of online travel agents and the looming threat of the sharing economy as companies like Airbnb experienced exponential growth.
This year, the major shift in the world of online travel agents and Airbnb is how hotels have responded to the consolidation and growth with more aggressive marketing tactics, particularly when it comes to growing direct bookings.
Several brands kicked off direct booking specific campaigns in 2016 and we see this growing across the board for all hotel brands in 2017.
Hilton began the now famous “stop clicking around” campaign that permeated online and offline advertising channels. The core message behind the campaign was that guests could get the best rate by booking direct with Hilton. Humor was often the center of the ads with a series of lighthearted commercials that ran, and the campaign also featured social integration with a central hashtag (#StopClickingAround).
Marriott followed suit with their “it pays to book direct” campaign that included messaging similar to the Hilton campaign. The twist, however, is that the Marriott direct booking push went one step further in that it encouraged guests to join the newly revamped Marriott Rewards program and promised the lowest rates possible to loyalty program members.
Why have direct bookings become such an overwhelming concern for hotels? The math is simple. Online travel agents are often seen as a necessary evil; they help hotels get more heads in beds, but those heads come at a cost — often 15-20% of the final transaction. The massive growth of online travel agents has led to hotels wanting to loosen the connection between their former counterparts and build more independent strategies for revenue growth.
Additionally, many online travel agents have expanded their product lines, offering more exposure – for a price. TripAdvisor jumped into the OTA game and is attempting to replace one middleman with another. The new TripConnect platform allows TripAdvisor website visitors to book a hotel room directly within their own website, eliminating the handoff to the hotel website. TripAdvisor is partnering with both hotels and OTAs for this program, creating yet another battleground. Expedia is also expanding their offerings with the rollout of the new Rev+ product, which will help current Expedia advertisers better forecast demand and manage rates. Unlike TripConnect, Rev+ is a free product (for now).
TIP – you can learn all about Rev+ here.
Airbnb has thrown an entirely new wrench into the travel world by offering a mobile-centric, localized approach. What started as a small, underground movement in 2008 has transformed into one of the biggest travel disruptors of our time. Airbnb now offers a sleek, personalized mobile app and a plethora of supportive travel-centric content readily available. Hotels are now not only scrambling to keep guests from booking with online travel agent sites but are also competing with an entirely new travel experience.
What are hotels doing to combat the changing travel landscape?
First and foremost, many brands are offering the absolute best rates and additional perks to guests who book direct. This movement is closely tied to a revamp in many brand loyalty programs, as was the case with Hilton. Additionally, hotels are going above and beyond to provide both a personalized and localized experience. Developing complex guest portfolios and using that information to enhance the stay is just the beginning of what is sure to be a long and complex journey to better serve hotel guests and incentivize direct bookings. We touch on some of these aspects in further detail in other areas of our report.
Discover More Travel Trends
This is just a small portion of our look into the top travel trends for 2017. Download the full report to see our top 5 predictions and how your hotel can compete!
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