The Hotel and Travel Week #1

Monday, 19th October

The news about growing tensions between Choice Hotels and Expedia breaks and everyone following hotel news channels will have heard about it by now. It has sparked off a stream of articles and blog entries over the entire week.
What it is all about:
Choice Hotels cut off negotiations with Expedia feeling that they couldn’t accept the new terms and conditions and that Expedia was not ready to negotiate but merely demanded. Choice argues the new terms would effectively take away hoteliers’ rights to manage inventory and rates at their own hotels, destroy channel management and rate parity, and will eventually lead to a long-term erosion of hotel brand and price integrity.

The author of an article for Hotels Magazine pretty much aligned himself with Choice Hotels to the extent of comparing the love of hotels for Expedia (or OTAs / TPIs in general) with the Stockholm syndrom. Read the article.

Tuesday, 20th October
ebookers UK announces to have added a new package holiday booking engine to their site which provides access to millions of holiday offers. The new engine uses TravelTainment technology and is the latest attempt by ebookers to extend the range of tools and services available to customers.
Wednesday, 21st October
BAA sells Gatwick airport for 1.51 billion GBP to the owner of London City Airport, US-based Global Infrastructure Partners. The company had to sell one of their London airports after an inquiry found that customers were suffering from a lack of competition between airports. It has also been ordered to sell Stansted and either Glasgow or Edinburgh airport but is appealing against that decision.
Thursday, 22nd October
On Thursday we saw another round of discussions concerning the Choice – Expedia conflict. Adam Kirby from Hotels Magazine ask whether Choice is Leading the Revolution? He says ‘Choice Hotels, whether it meant to or not, finds itself as the leader in an anti-OTA revolution. The big question now is whether there will be any followers’.
However, there are also those opposing the rebellion against Expedia such as Consultant, Marketing Coach and Author Neil Salerno. He argues that the discussion is void because the direct channel cannot compete with OTAs. OTAs spend much more for marketing and therefore have more exposure. Salerno: ‘Smart hoteliers consider OTA business as a base which allows them to build occupancy.’ “Growing Tension Between Hoteliers and OTA’s”…NONSENSE!
Friday, 23rd October
Today, Expedia entered the next phase of the dispute by appealing to Choice franchisees directly in a letter which was obtained by hotel technology blog Tnooz.com.
Expedia clearly denies the fault for the breakdown of negotiations and suggests that it is open to continue on property level. They also claim that the terms, mentioned by Choice, which led to the breakdown had already formed part of the day-to-day relationship during the prolonged extension period and are no different to what they have in place with other long-term partners.
It seems like the discussion is heating up and this letter could potentially be explosive stuff in the anti-OTA ‘revolution’.
Have a good weekend!

Why hotels need an individual website

Statistics show that travelers become ever more educated if it comes to their search behaviour.
According to a study by Ypartnership and Yankelovich, Inc. this is where travelers first go when looking for a hotel or resort:

Web site of online travel agency like Expedia, Travelocity 31%
Search engine like Google, Yahoo, MSN 26%
Web site of specific hotel chain 21%
Web site of individual hotel/resort 10%
Meta search engine that compares rates 5%

(See: Travelers’ Online Search Behavior Evolves)

You may say that the figure for ‘website of individual hotel/resort’ at 10% is still quite low. However, what this statistic doesn’t cover is what people do after their first visit.
I argue, that a large number of people after doing some research on the top three – online travel agency sites, search engines and even specific hotel chain sites – will search for the individual hotel/resort website of a property they have preselected. The reason being, that all of the above, in most cases, only offer very limited information about a property and show small or bad quality photos. A traveler cannot be certain what exactly to expect at the hotel and usually, this is not enough to make a buying decision. At least not for a leisure traveler who is about to book a hotel room, mirroring their lifestyle, for a very precious few days of their life: holiday. After all, successful hotels these days don’t sell rooms, they sell an experience.
Take a look at the following two examples, favourite websites of the Hotel Magazine, and you see what I mean:

 

 

 

Neither of the top three places to which travelers initially go in order to search for a hotel or resort, could possibly cater for the experience an individual hotel website can and should create.

The second element to focus on is trust. As the above figures show, travelers have come to use online agency websites and do trust the big ones they know. Though they may not trust a site they have never used before, even if it sells rooms at a cheaper rate.
However, if they visit an individual hotel website which is professionally done, layed out well and maintained properly – i.e. they get the impression that the hotel staff is looking after it – they will probably trust this site more and prefer to cut out the intermediary. If the rate is higher on an online agency site because of booking fees or commission, the decision will be even easier.

This is exactly what I could see happening in my last position when analysing the website and booking statistics of our large network of chain, traffic and individual websites. The individual hotel websites brought in many more online bookings than for example the chain site or other sites with more than one hotel featured. Moreover, traffic very often came from the search engines where people were searching for a specific hotel name. It is unlikely that all those people would have known the hotel name from previous visits, offline marketing or friends and family. No, they have found the name on online agency, destination, review and hotel chain sites during the first step of their search and looked for a preselected property in the second step.

This is the reason why your hotel/resort needs an individual website. Create an experience, establish trust and you will increase your online revenue. – Plus, each booking will also come you much cheaper than any reservation made via a TPI (Third-party Intermediary) or OTA (Online Travel Agency) which usually costs you around a quarter of the value in commission.