By Rebecca Cregan, Director, Market Management, Expedia Group
For many Canadian businesses, continually evolving with technology can be overwhelming. As well as being a drain on resources and budget, it can cause a negative change in the fundamentals of how a business operates.
This mindset needs to change. Instead, technology should be a tool that provides local business with the greatest opportunity and allow independent players to compete in the global economy — no matter their size or budget. Those who embrace this mentality will thrive in today’s digital world.
How? In the biological world, we refer to it as a symbiotic relationship. Digital disruption should be viewed in the same way, in that the best success lies in a partnership between small and large players; a mutually beneficial relationship. The technological investment and capabilities of major players can, in fact, level the playing field for smaller ones.
Take online travel agents (OTAs) and hotels as an example of how we adopt the symbiotic relationship in terms of riding the wave of digital disruption. OTAs were initially considered the digital disruptor of the travel world — a new predator — but now, speak to savvy hoteliers or industry experts and often their perception of OTAs has changed. This is because the rapid speed of digital disruption has created an adaptive evolution. Enter the symbiotic relationship, whereby success in today’s digital landscape comes by working together instead of against each other.
By leveraging the technological assets and scale of a global platform such as Expedia Group, independent hotels can now outpace their larger counterparts more effectively.
Let the global players invest billions in technology so the independent hotels, for whom technology is not a core competency, don’t have to. But leverage their global reach and meeting of customer-service expectations to continually drive profitability.
It’s not just our distribution network, but also our asset bank of real-time data and free operational tools our hotel partners value most. It’s this global intelligence and industry-leading technology that allows independent hotels to compete with big chains on the same scale.
Take price setting for example, arguably the most critical factor behind profit margin. Our insights show hotels dedicate an average of one to three hours per day on price setting. While this can be performed manually, it can become a drain on time and resources. Alternatively, they can sink significant chunks of budget into a third-party platform, which may be within the means of a large chain of hotels, but not your mom-and-pop business. Or, a hotel can leverage the free tools provided by its Expedia Group partnership.
Our revenue-management solution, Rev+, was designed specifically with the feedback of our hotel partners. Rev+ draws pricing intelligence from our live and global portfolio of travel brands in real-time.
Consider this: The data set that Rev+ leverages today experiences close to 2.3 billion price and availability changes per day — equivalent to nearly 20,000 changes per second — showing how important agility is to compete effectively. In fact, our data for the last 12 months of revenue-performance estimates of hotel partners highly engaged with Rev+ compared with partners’ competitive set (controlled for seasonality, Expedia Group November 2018) shows hotel partners engaged with Rev+ enjoyed a 21 per cent incremental-revenue uplift compared to hotels in their competitive set not using Rev+, generating US$26 million incremental revenue combined.
Let the online travel agents pick up the bill for developing the technology that meets rapidly evolving customer service expectations. And, in doing so, let our independent hospitality players go back to what they do best: providing travellers with exceptional hospitality.
It’s a mutual relationship and fair competition is the true winner — a lesson from biology the tourism industry is learning.