Why the Online Bookings Power Shift Is More Manageable Than Hotels Think
November 10, 2015 10:00am
By David Chestler, EVP Global Enterprise Sales & Business Development, SiteMinder
Online distribution is growing at a faster pace than the entire travel market. The American Hotel and Lodging Association (AHLA) estimates 480 online bookings are made every minute, across the US, alone. It’s a fascinating statistic that emphatically demonstrates how much the hotel industry has changed over recent years.
We know more people are traveling than ever before. Figures from the UN World Tourism Organization show that in 2014 the number of people traveling internationally reached 1.14 billion – and it forecasts growth of around 4% during 2015.
This heightened desire to travel and see parts of the world that 25 years ago would have been considered out of reach, and of course too costly, has been spurred on by the Internet economy, the desire for experiences once reserved for the elite, and the sheer volume of information that’s available to travelers making it more accessible.
But if we dig deeper into this observation, the broad accessibility of information isn’t just changing a handful of travel industry trends, it’s completely shifting the balance of power – from a consumer economy with intermediaries, to a user economy with “self-service”.
The consumer economy is now a user economy
Travel knowledge and information used to lie in bricks and mortar, dominated by brands and agencies, renowned for delivering an expertise that could be rarely challenged.
But the Internet has caused a tipping point to occur, enabling hotels to sell themselves to potential guests who appear to know precisely what they want, and the research they need to carry out in order to make their travel aspirations a reality.
Everything from photos through to guest reviews are creating information overload, as user generated content becomes a critical variable in the consumer’s battle for power. In the early days, travel agents and experts influenced consumers with experience and brochures illustrating what was available. Later OTAs, and especially Booking.com, revolutionized this idea of putting the traveler in control by providing more content and information available at their fingertips. Now we see the user economy taking control with the growth and development of Airbnb, Uber, Flip.to, and many others enabling self-selection.
Travelers can have an authentic experience of living like a local, in the neighborhood, visiting their host’s local favorites – and quite often at a fraction of the price. Travelers are willing to transact beyond hotel rooms, and as a result guests are becoming more efficient at making their final booking decisions.
The new doesn’t always replace the old
After 26 years in the hotel and travel industry, I’d like to think that the old (or perhaps mature) can continue to be relevant. And it is.
Many travelers still rely on the services of travel agents – in fact, research shows that in 2014 18% of American travelers used traditional travel agents, compared with 12% in 2013.
Global distribution systems (GDSs), which have been around for decades, continue to service a huge volume of travel and accommodation bookings – an estimated 62 million in 2015 – demonstrating the staying power of expert advice from travel agents and wholesalers with enhanced networks and online tools.
That said, there are always going to be new brands or industry challenges that force hoteliers to stay fresh and on top of their game. That’s nothing new and it will always evolve. For hoteliers, it’s a question of managing and adapting to those changes. It’s evolution, not revolution.
The bookings gauntlet has been thrown down
Hoteliers must think global and act local in order to capitalize on the guest’s winding path to purchase. We live in a multi-screen world, with many points of conversion, and it’s important to remember that rate is not the prime decision tool. Yes, price is a big differentiator when assessing the challenge presented by the likes of Airbnb, but there are many more factors to consider. Hoteliers can take on the challenge in many ways. One example is to become more service-orientated, focusing on the elements of a hotel that home-sharing can’t offer – such as tour guides, chauffeured drivers, dry cleaning, restaurants, gyms and a bounty of amenities and loyalty points.
By offering an extraordinary guest experience hoteliers can really capitalize on the impact of user generated content – reviews, social media check-ins, comments, ratings – and in turn use these positive affirmations to drive bookings.
A hotel’s biggest weapon in the fight for bookings is knowing the business mix inside out. Ask where your bookings are coming from. Ask what your local competition is doing to fill their rooms. Ask how you are driving your online and offline business.
It is truly all about the details.
Hoteliers need to find balance and control of how your rooms are being distributed. Take charge of your bookings mix and ultimately your business.
Cloud technology – such as SiteMinder’s Channel Manager, TheBookingButton and Canvas – is leveling the playing field for independent hotels, helping them to compete in a fast-changing market. It gives hotels of any size the power to be exactly where prospective travelers are – without the need to invest heavily in IT and systems, providing more time for creativity and caring for your guests.
The multi-channel, multi-screen world is now completely accessible, giving hoteliers greater opportunity to reach, attract, and convert global guests. Chain hotels have been doing this for years, reaping the benefits of having a visible online presence to ensure they turn lookers into bookers. It’s time for independents to take charge, challenge the status quo, and compete in the same way.
It was an honor to present at WTM London once again this year. If you missed my presentation on “The power shift in travel: How hotels can get back on top with their online distribution strategy”, you can now view it here.
As the leading cloud platform for hotels, SiteMinder allows hotels to attract, reach and convert guests across the globe. We serve hotels of all sizes with award-winning solutions for independents and groups alike, wherever they are in the world.
SiteMinder’s products include The Channel Manager, the industry’s leading online distribution platform; TheBookingButton, a wholly-branded booking engine for direct bookings via the web, mobile or social; Canvas, the intelligent website creator for independent hoteliers; and GDS by SiteMinder, a single-point of entry to a six-figure network of travel agents and the world’s major GDSs. With more than 20,000 hotel customers and 350 of the industry's top connectivity providers as our partners, today we have presence in more than 160 countries on six continents.
For more information, visit www.siteminder.com.
Contact: Maria Franco
+61 410 233 735
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