When one of the largest hotel companies in the world changes its name, that’s big news. But perhaps more transformative, Accor — AccorHotels now — is spending $25 million to enable and invite independent hotels to sell their rooms on Accor's booking website. It’s the French company’s latest move to fight the growing power of the OTAs. Join the discussion about this move and more at the LinkedIn group Hotel Revenue Strategy Leaders. Keep up with the news there on a daily basis and join the conversation.
Hard to argue with this: “We have two strategic targets: to be able to display the content, the price and the product in the channel we think is the most promising for selling our product and services, and to more evenly distribute the cost of services in the travel chain,” Jens Bischof, chief commercial officer of Lufthansa, said.
Interesting story from Travel Weekly on a report that says if US airlines continue to limit and reduce listings on OTAs and other internet channels, ticket prices would rise more than 10%, but that could cause 1 in 6 potential independent passengers to decide not to fly. Southwest, which has long only sold tickets on its own website, is mentioned, but the report focuses more on Delta, which has recently scaled back its distribution on smaller, low-fare OTAs. The study concluded the decreased demand wouldn't have much effect on airline profits because those consumers are currently purchasing the low-cost tickets generating the lowest margins. Could there be a Southwest among the hotel brand companies?
Changes in the Chinese distribution world
• Expedia sells stake in eLong to Ctrip and others.
• Priceline invests another $250 million in Ctrip.
• What's it all mean? Here's an analysis from ChinaTravelnews via Tnooz.
• And a few days later, there was this, about Qunar and a possible merger with Ctrip.
The story in Tech Crunch says China's online travel market is expected to hit double digit growth before hitting $75 billion in 2017, so there are plenty of reasons why Qunar, Ctrip, Priceline, eLong, Alibaba and others are making such big plays now.
This seems to go counter to a previous stories, but it's good news: More people are booking airlines and hotels directly than with OTAs, according to research from Criteo and PhoCusWright. Leisure travelers, especially, were more engaged with travel brands than OTAs, even subscribing to emails and newsletters from those companies at a higher clip than with OTAs.
The travel industry has spent $4.85 billion in digital ad spending this year, but that's not much in comparison to other industries. Still, that number is climbing. Costs to acquire those customers continue to rise in a lot of different areas.
There are plenty of apps from OTAs, hotels and airlines created for this new innovation, but the small screen of the watch has some wondering how much of an impact it could have on transactions.
TripAdvisor says it has a bank of 300 content specialists, many of who have backgrounds in law enforcement, credit card fraud and even forensic computing, according to this story from Tnooz. Of the 139 reviews TA gets every minute, a very small percentage is problematic or worse.
At the recent Code Conference, the topic wasn't the hotel industry, but many of the themes were ones this industry has seen, heard and worried about before:
• In 1995 there were 35 million internet users. In 2014, 2.8 billion.
• In that same time, mobile phone users went from 1% of the world's population to 79%.
• The market caps of the 15 biggest public internet companies was $17 billion and today it's is $2.4 trillion.
All this, and more, from Mary Meeker, a venture capitalist who publishes an annual assessment of the internet economy. What's next? Buy buttons, is what Meeker says. That could make things more complicated for hotels.
A good summary of what's on the mind of revenue managers, from a panel at a recent HSMAI event. Seems like they did a great job touching all the bases.