Hotel Distribution

The race for reservations: mixed circumstances for OTAs


17 June 2014 at 10:06, by

OTAs, Google Plus.

OTAs, Google Plus.

OTAs are losing stamina in the United States of America.  Reservations via Online Travel Agencies have declined during 2011 from 61% to 54% and  from 2011 to 2013 by 7% . This is the latest information Phocus Wright published on Travel Market Report website.  Despite this decline, the overall trend is positive. Family tourism and overseas travel have increased from 31% to 36%.

According to Marcello Gasdia, analyst of the research firm, the results are good.  “The total number of trips has increased from 61% in 2012 to 65% last year. This means that many passengers are being encouraged to travel again”.

Regarding the reservation decline in Online Travel, this does not seem to be the trend in Spain. According to Tecnohotel, who comment on a report from Deloitte indicating that over 60% of the sales carried out are through intermediaries. Looking ahead, 64% of the professionals consulted consider Internet as the clear sector leader,  highlighting the potential of online comparators integrated with social networks and online travel agents (OTAs).

Taking this into account, the respondents felt that metasearchers, OTAs and hotel chains are, in this order, the agents who have the strongest position in Internet, while tour operators and offline travel agencies have room for improvement.

As for future prospects, expansion is necessary as the weakness in the domestic market demand is forcing the local industries to look for new customers.  According to 56% of the executives surveyed, there is a clear need to explore new markets, and 23% say they are even redefining their products based on initiatives to reach these new customers and a further 42% highlight that the main opportunities are in the Russian market (although the recent destabilization could be damaging), followed by Latin America (24%), Brazil and China (13%).

Moreover, EyeforTravel wonders what would happen if the three global giants like Google, Apple and Facebook compete with travel agencies and intermediaries in reservations. In fact, Richard Lewis, Best Western hotel chain CEO, thinks they are now a real ‘threat’. “These three companies have enormous databases and the three of them have made several attempts to obtain higher revenues in the travel industry. ”

Tim Hentschel,  OTA Hotelplanner Director, Google needs the intermediaries, especially in the technology development field when the Google Glasses are consolidated. “Google is not going to reinvent a booking engine for all OTAs. Obviously it’s not good  business to invest billions in an area where virtually everything is already done. ”

Nigel Huddlestone, head of the Google travel department says that the firm has no intention to completely immerse in the industry, either for flight bookings or hotel reservations.  Lewis, meanwhile, argues that perhaps the association between hotels and  OTAs will help to achieve a more balanced distribution.

In his opinion, the problem arrises because many hotel workers do not know how the hotel distribution works. “Once at a hotel I tried to book the lowest price room, when I was at reception another gueat arrived who had bought his room on Booking and it was cheaper than mine. It is essential that the staff know the business, “he concludes.



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