Digital wars in the travel industry
In 2015, the battle continues between hotels and online travel agents (OTAs).
Hotels and hotel brands are investing in technology to develop more sophisticated digital platforms to compete with the OTAs. Some in the industry are turning to outside solutions and others are acquiring the companies which have the right expertise.
Some players are monetising their capabilities by offering digital services alongside their main business.
As the chess pieces move at speed, the OTA giants are responding by doing everything possible to take more and more of the board for themselves. Understanding this fast moving dynamic – and responding to it – is one of the most important management priorities your hospitality business faces today.
Accor steps into the distribution game
In recent years OTAs have been consolidating on a huge scale. Expedia, Priceline and TripAdvisor have been acquiring smaller companies to boost their digital capabilities and fend off competition. This year alone Expedia acquired Travelocity and Orbitz Worldwide. But now it is not just the OTAs playing the game.
In June, Accor blurred the border between hotel brand and OTA by bringing independent hotels onto its booking platform. This is advantageous for Accor which could effectively increases its hotel stock from 3,800 to a whopping 10,000.
It’s also an amazing opportunity for independents, which get to share the carefully developed platform. This is a clever and strategic development in hotel distribution and turns the heat up significantly on the OTAs.
Accor’s decision to open up its booking platform is part of a careful plan. In April, Accor took over FastBooking, which focuses on hotel website development and distribution channel management solutions.
FastBooking continues to operate independently but the partnership will undoubtedly enable both companies to develop in the face of OTA pressure. As part of its ‘digital transformation’ Accor also acquired mobile developer Wipolo in October 2014.
Clever web sites for independents
With OTAs taking the lion’s share of the market, hotels are also turning to third party technology companies who can help give them a competitive edge.
In February, Sabre, a technology provider for the travel and tourism industry, launched website services for hotels. Sabre is headquartered in the US and has revenues of US$2.5 billion. Sabre claims that the ‘industry-first turnkey website solution [will] help hoteliers in-crease online conversion and build brand loyalty.’
This would allow the hoteliers to quickly set up a website using a wizard and bypass the process of designing and building a website themselves. It also helps them to be less reliant on OTAs.
At the same time, TripAdvisor has turned up the heat with ‘Instant Booking’: a display of room prices and a ‘view deal’ button that leads to a booking page an OTA or a hotel website that is distributing the room.
Which hotel appears in this section will depend on whether a hotel is signed up to Instant Booking and pays the right level of commission.
This tool is targeted at independents, and would allow them in theory to compete with OTAs and get customers to book directly on their booking platform. However much of the time the OTAs appear to be more likely to show up on the site. Best Western International and Choice Hotels have both signed up to Instant Booking.
OTA giants expand digital arsenal
Mergers and acquisitions are allowing businesses to recombine services and consolidate brands to their best advantage. Last year Priceline bought web services company Buuteeq, which has now been renamed BookingSuite and is being operated as a unit of Booking.com (a previous Priceline acquisition from 2005).
BookingSuite is now offering web services to help independent hotels build their websites. Whilst there is no charge for this service Booking.com would take a 10% commission from the hotels subsequent bookings. So whilst independents could improve their sites and drive more bookings to their direct platform they would still be strengthening this OTA.
Expedia, OTA superpower and an undisputed technology leader in hospitality continues to add to its armoury. Expedia’s acquisition of Orbitz Worldwide brings with it Orbitz Partner Network, which delivers travel technology solutions to some of the world’s largest airlines, bank loyalty programs and travel agencies.
These acquisitions are clever “plays” – both increasing OTA revenues whilst also ensuring that interesting technology companies are out of the reach of hotel companies.
How can your business ensure its strength?
The war rages on. More acquisitions will certainly take place. Digital technology will continue to evolve and open up new possibilities for the hospitality industry. It’s all moving faster and faster.
To remain competitive, hotel operators need to keep tabs on this fast moving landscape. For most in the industry, OTAs are a necessary and important partner. But increasingly, new technologies, strategic alliances and platforms are within reach. And for those hospitality businesses with reasonable scale and serious capital, technology acquisitions just might make sense.
Don’t just “watch this space”. Get actively involved.
Republished with permission from the Which50 blog. Ewa Maliczowska is a consultant at Madison Mayfair – ewa@madisonmayfair.com.
Email the Travel Weekly team at traveldesk@travelweekly.com.au
AccorHotels booking.com disruption expedia hotel brands online travel agents orbitz worldwide ota Priceline sabre tripadvisor which 50Latest News
Celebrity Ascent makes its European debut
Choosing to cruise this northern summer? Celebrity Ascent promises to raise the bar.
NCL opens sales for Norwegian Sun’s APAC debut, announces 14 new voyages
It was to be 13 new voyages we heard, but given the numbers unlucky nature, an extra had to be thought up.
Inside Travel Group appoints Tom Welland Global Trade Marketing Manager
Heidi's Tom Welland heads to Inside Travel Group as its new Global Trade Marketing Manager.
Federal Government rolls out $1.4m program to promote careers in tourism across regional NSW
The Government taking a break from some of its pointier issues with some work in our incredible industry!
Australian visitors to South Korea surge
Japanned out? Aussies are adding South Korea to their bucket list.
G Adventures celebrates Dr. Jane Goodall’s 90th with new wildlife-focused trips
Fancy yourself as a bit of a conservationist? Put your skills to the test on the Jane Goodall collection.
Virgin Australia says suspended flights to Bali result of Boeing MAX delays
If only we had a company like Boeing to blame our mistakes on. Any takers? Get in touch!
Airline Review: Singapore Airlines Business Class – A380-800
The iconic Singapore Airlines' A380-800 is in a class of its own - business class that is.
South African Airways to relaunch Joburg – Perth flights as economic ties strengthen
Bringing two of the world's most distinctive accents closer together, for good or for bad is yet to be determined.
My journey: Before becoming a travel agent I was… a palliative care nurse
Australind Travel & Cruise, Travellers Choice member Saibra Twigg reveals her life as paediatric nurse then to palliative care before a career leap to travel agent. How did you become a palliative care nurse? ST I went straight from school in nursing and initially specialised in paediatrics, working at Perth’s Princess Margaret Hospital for Children. […]
Emirates unveils future plans with new hub at Al Maktoum International Airport
We've also been looking into our future. It involves plenty of famils, we hope.
Australia fails to make top 10 destination list for American travellers
Australia's top cities have failed to make the grade with American travellers this northern summer, with no local city in the top.
APT Launches 2025 Asia Adventures
APT has launched its Asia Adventures for 2025, including new luxury holidays in India, Sri Lanka and Japan. Five new tours lead guests to the highlights of India, including a seven-night cruise along the rarely travelled Lower Ganges aboard the Ganges Voyager. Further south, Sri Lanka’s greatest destinations are revealed on a new 15-day Land […]
ANZAC Battlefield travel on the 2025 bucketlist
As Anzac Day dawns, agents prepare for a surge in bookings for the 110th anniversary of the Anzac Cove landings.
Former Channel 9 Getaway host and founder of TRIBE Jules Lund to speak at Travel DAZE
From blond-tipped travel reporter to Travel DAZE speaker, Jules Lund cuts through the BS.
HX’s Roald Amundsen finds aliens in the Antarctic
Forget whales, HX's MS Roald Amundsen captures aliens in the Antarctic - and they're not pretty.
Mayhem in France as 70% of flights face cancellation
I mean it wouldn't be France if there wasn't at least one strike.
Etihad Airways launches double-decker service with world’s only in-air three-room suite
We imagine falling asleep in the three-room suite is superior to falling asleep on your neighbour's shoulder.
Norwegian Cruise Line launches 2024 Europe travel season
Europe certainly has a lot of ports. Its time for Australia to up its game.
“The power of travel for positive change” – Intrepid’s Jenny Gray hails controversial all-women Saudi Arabia trip
There is an awful lot to love about this tour from Intrepid. Where do we sign up?
Princess names the Sun, unveils Sanctuary Collection + Star Princess to Alaska in ’26
A huge bottle of Veuve was smashed into the side of the ship to make things official. So no, we couldn't snag a glass.
Collette special offers across peak northern summer season
If you are craving a trip to Europe then grab this deal with both of your grubby hands.
Air India and All Nippon codeshare between the two countries
Here at TW we agreed that the photo would have worked better if they had swapped planes.
A&K offers minimum 18 weeks paid parental leave
Contrary to what the photo suggests this benefit is only applicable for humans. Back to work Mrs Jumbo.
NH Hotel Group rebrands as Minor Hotels Europe & Americas
Hang around the bends of the hotels. We imagine they will be full of a lot of branded content.
Scenic Eclipse II – the business of creating unforgettable life-changing memories
These cruise brothers from another mother offer a view of cruising on Scenic Eclipse II that is poles apart.
MSC builds new hospital ship with Mercy Ships
If you want to read a story that puts a smile on your face then this is the one for you.
“I peed on myself watching this” – Social media users squirm at Royal Caribbean’s Harmony of The Seas 55ft dive video
TW is not responsible for any involuntary actions your body might have after watching this video.
FLIGHT REVIEW: Qantas Boeing 787 Dreamliner business class
The real bonus is you're unlikely to be around screaming children. Hoorah!
Traveltek offers travel agents new rapid deploy cruise website
As always, if you have any issue with the platform, just turn it off and on again.
Experience whale watching & classical music at the Australian Festival of Chamber Music in Townsville
Disappointedly, the whales do not start singing in tune with the orchestra. Opportunity missed.
Fond, very Fond. London hotel famed for James Bond link adds ‘Classic Comforts’ lunch menu
James Bond author Ian Fleming was so fond if this hotel, it inspired the legendary phrase ‘shaken, not stirred’.
What sets Eclipse Travel apart with Africa expert Hilary Dubyk: Travel Weekly TV
If you want to know more about Africa, then Hilary Dubyk is your person.
Surge in Australians visiting Japan
Feel like all of your friends have just returned from Europe? Now it's Japan.
Seabourn announces Western Kimberley Traditional Owners as Godparents of Seabourn Pursuit
Seabourn has named Western Kimberley Traditional Owners, the Wunambal Gaambera, as Godparents of the ultra-luxury purpose-built Seabourn Pursuit. It is the first cruise line to appoint Traditional Owners as godparents of a ship. Seabourn Pursuit embarks on its inaugural season in the Kimberley region this June. The naming ceremony will take place on Seabourn Pursuit’s […]
Sydney named 17th best place to work remotely
If you struggle to get a seat within Sydney's coffee shops, you now know why.