As the world prepares for the resurgence of travel, third-party intermediaries and online travel agencies (OTAs) will undoubtedly have their role to play in the emerging environment. And, while relationships with these entities come at a cost — and have been contentious at times — their reach and appeal to leisure travellers holds potential benefit for hotel operators.
“Recovery of the travel and tourism industry will take time, but it’s critical all those involved work together to support it,” says Philippe Garnier, vice-president, Omnichannel Revenue for IHG Hotels & Resorts.
“Restoring travel will take an unprecedented level of partnership,” agrees Rebecca Cregan, director of Market Management, Expedia Group. “No one country, or company, can address the devastation caused by COVID-19.”
And, as the travel industry prepares for recovery, striking the right balance to ensure customer confidence and drive bookings is of great importance. This has many brands and operators assessing their sales and distribution strategies.
For Atlific Hotels, as with many others, the path forward is a multi-faceted approach. “OTAs provide an important channel for generating awareness and [getting] in front of customers, especially for our independent collection of hotels,” explains Wendy Lamont, EVP, Atlific Hotels. “We also recommend participation in programs such as TravelAds, as the ROI is favourable at this time. As business returns, we’ll monitor the data closely so we can make the best recommendations as [the situation] evolves.”
“IHG’s distribution strategy includes a balance of revenue between our direct and indirect channels,” Garnier weighs in. However, he notes, “Of course, we prefer guests to book through IHG direct channels, but OTAs can provide our hotels with additional reach.”
This preference, and a concerted industry push, for direct bookings has been a key trend in recent years, with industry leaders investing heavily in enhancing their loyalty programs and direct-booking platforms. In fact, at the close of 2019, U.K.-based data and analytics company GlobalData, highlighted the push for direct bookings among the trends expected to shape the lodging industry in 2020.
This overall push did not subside during the pandemic, with a number of major companies introducing enhanced booking platforms. Wyndham launched a re-designed mobile app in 2020, which features a new Lightning Book feature targeting last-minute bookings. In February Marriott launched a re-freshed Marriott Bonvoy app with “new travel-shopping options,” including Homes & Villas by Marriott International home rentals, Work Anywhere with Marriott Bonvoy passes and Marriott Bonvoy Tours & Activities.
As Marriott’s app update keenly demonstrates, major hotel companies are increasingly becoming aggregators in their own right, too, incorporating more than just traditional hotel stay into their booking platforms. Home-rental offerings and experience packages are becoming par for the course as companies strive to offer greater value to their loyalty members.
At the same time, aggregator platforms are getting smarter, expanding their offerings and making the user experience friendlier for both travellers and partners.
As part of Expedia Group’s new global brand positioning, announced in April, the company has expanded and streamlined its platforms. As Cregan explains: “The new home screens reflect a clear and simple layout, with product features that will empower travellers to build a complete trip that suits their needs and interests, bringing together multiple trip elements seamlessly.”
Expedia has also introduced the ability to shop by lodging amenities, providing partners with “more opportunity to showcase their unique amenity offerings” and consumers with greater price transparency. And, Cregan adds, “Expedia will also be launching a new package offering that will provide ‘pre-bundled products’ with upfront total pricing.”
Booking.com also recently entered a new global partnership with experiences marketplace Viator to offer more tour, attraction and activity options to its customers.
The combination of these updates and pandemic-related market shifts certainly won’t hurt the appeal of OTAs. In fact, it’s expected that travellers will favour OTAs over direct bookings as the re-emergence of travel takes place. “The recovery is currently being driven by leisure demand and OTAs typically appeal more to leisure guests,” Garnier explains.
Expedia’s research also suggests customers will increasingly turn to OTAs during the recovery period. “In the wake of COVID-19, the industry is experiencing early signs of recovery, but the way people travel — and how they make decisions — has changed and partners should be prepared for this,” Cregan explains. “In a study of 11,000 travellers in 11 countries, Expedia Group Media Solutions found that travellers are turning to OTAs for trip planning nearly 25-per-cent more than pre-pandemic.”
“Over the last 12 months, we’ve seen growth in the business booked via OTA channels,” Lamont confirms. “This is likely due to a shift in segmentation — where there is more leisure focus and fewer business travellers, group meetings and conventions.”
However, it’s key to remember that we continue to move through uncharted territory and, as Lamont suggested, it will be important to monitor how consumer habits and travel patterns evolve as the industry emerges from the pandemic.
“Even though the hotel industry is starting to recover, it doesn’t mean the hotel industry in 2022 will look exactly the same as it did in 2019,” Garnier agrees. “The relationship between the OTAs and the hotels might evolve based on how different segments develop, but it is too early to tell.”
Written by Danielle Schalk
