Mike Murray: “The big OTAs will NOT start treating hotels fairly.” And other things that will not happen this year.

A great deal of what we read nowadays is predicting how the travel market will change and how hoteliers need to pre-emptively adapt in order to compete. For a change of pace, I’ve decided to write about four things that will definitely NOT happen this year, so hoteliers can factor this thinking into their online distribution strategies.

So, without further ado, here are four things that will NOT happen this year:

 

1 – The big OTAs will start treating hotels fairly.

Unfortunately for hotels, the big OTAs have hotels backed into a corner and won’t change their tactics anytime soon. Even though hotel bookings earn the majority of OTAs’ revenue, the OTAs also think that they have an unshakeable technological advantage over hoteliers. This has led to a one-sided relationship where hotels are not treated as valued partners; instead, they are viewed as a commodity that can be easily manipulated and constrained.

The good news is that while this was true in the early days of the OTAs and the Internet, technology has evolved and hoteliers now have the tools necessary to level the playing field. While the OTAs do still have most hoteliers beat in terms of marketing budgets, there are ways for hotels to use the OTAs’ marketing efficacy to their advantage. (To learn more about some of these ways, check out my recent article: “Reimagining the Online Booking Channel.”)

 

2 – Airbnb will cease being a threat to hotels

While most hoteliers probably spend a great deal of time wishing that Airbnb would go the way of Uber (can you believe what’s been happening over there!), slowly killing consumer goodwill and loyalty for the company, it is highly unlikely. Instead of fighting against Airbnb (or sticking our heads in the sand, pretending that it’s not a real competitor), hoteliers must accept that Airbnb is here to stay and update their pricing, distribution and marketing strategies to better compete with the accommodation behemoth.

This brings me to the next thing that will definitely not happen this year…

 

3 – Millennials will stop seeking experiences and simply book based on price.

One of the reasons that Airbnb has become so popular, especially with the Millennial market, is they have focused on providing value, as well as a full travel experience. In other words, Airbnb does not simply provide a place for consumers to sleep; they deliver inspiration and experiences that appeal to travelers’ sense of adventure. While inns and guesthouses have existed for hundreds of years, today’s consumer is looking for more, making it essential that hoteliers step up their offerings to more effectively compete.

What does that actually mean for hoteliers?

Hoteliers need to update their marketing strategies to better communicate how their property can help potential guests fulfill a travel experience. Hoteliers need to share content (including images and videos, which are particularly shareworthy on social media) that illustrate what guests will experience at your property and in your destination, be it great dining experiences, fun outdoor activities, relaxing spa treatments, local hot spots, beautiful natural phenomenon or any other inspirational activities that your property and destination have to offer.

Leverage social media (and the power of social influencers) to create online word-of-mouth endorsements from guests; this strategy is particular effective because “86% of Millennial travelers were inspired to book a trip based on content they viewed online.” Share/retweet your past guests’ photos, comments and videos and, in addition, implement the widget that will publish your social media posts to your property’s website, as an additional endorsement of your property’s offerings.

Establish yourself as a resource to potential travelers by sharing non-salesy, informational content about your destination.

And finally, use booking channels that appeal to this audience and can reward them for what they are already doing (and loving): sharing their travel experiences online.

 

4 – Hoteliers will abandon detrimental pricing and distribution strategies.

This one may be a bit idealistic but, in a perfect world, hoteliers would stop using their current outdated, pricing and distribution strategies because they do nothing but harm their own bottom line. Here are some examples of pricing and distribution strategies that hoteliers should forego:

Allowing OTAs to sell your rooms cheaper (than via the direct channel). This strategy continues to push consumers toward the OTAs and costs properties significant revenue on each booking secured. Instead, hoteliers should be offering value-added perks to guests who book direct in an effort to maintain (or even boost) occupancy, while eliminating the cost of acquisition.

Not using the OTAs at all. While I understand hoteliers’ frustration with OTA tactics and high commission rates, I also know that those who don’t list their rooms on the OTAs are losing visibility with potential guests and as a result, bookings. Today’s consumers use the OTAs to research what properties exist in a destination and from there, they may visit the property’s website and compare the available rates; however, if your property doesn’t have a presence on the OTAs, your property will miss out on that business altogether.

Only using the big OTAs. As mentioned earlier, the top OTAs have a great deal of the market cornered when it comes to consumer traffic; as such, many hoteliers ignore the smaller OTAs. While this may seem like an easier distribution option, it actually decreases the property’s online presence and results in reduced profits (as many of the smaller OTAs charge a much lower commission rate). Instead, consider using new, innovative online booking channels and apps that appeal to specific consumer groups who are highly active travelers (like Millennials). Some of these new channels also equip hoteliers with tools that can help them to secure more bookings – without charging huge commissions!

Well, that’s it: four things that will definitely not be happening this year. Now it’s important that you ask yourself one question: were your pricing, distribution and marketing strategies established based on any of the above points? If so, now is the time to revise them to ensure that the rest of 2017 is as profitable as possible for your property.

 

About Mike Murray

Mike Murray is the founder of Vir.al  Vir.al is a new inspirational hotel booking app and website that capitalizes on today’s social media phenomenon to bring hotels and the valuable Millennial travel demographic together. Using curated, experience-based, destination-specific content, Vir.al enables users to create unique travel experiences, not just book a hotel room in which to sleep, and incentivizes them to increase their social media score in exchange for perks, promotions and status. Hoteliers can use the app’s back-end, which identifies socially active potential guests who are planning a trip to their destination, enables hoteliers to offer incentives to book and, as a result, boost their brand’s online visibility with and appeal to Millennials. Currently, Vir.al is available on iOS and can be used to plan travel experiences in eight popular destinations in the United States – New York, Boston, Miami, San Francisco, Los Angeles, Las Vegas, Austin and New Orleans – but more domestic and international destinations will be added on a regular basis.