A presentation by Robert Cole, CEO of RockCheetah titled Mobile: How Signals, Touchpoints, and Moments Create Engagement, Conversion and Loyalty, for the Hospitality Sales & Marketing Association International (HSMAI) Revenue Optimization Conference on June 22, 2016.
Robert Cole was invited by VFM Leonardo to participate in a webinar covering the benefits of marketing to OTAs and specifically how to The session was held online on September 25, 2013. It was stressed that the focus should be on business and marketing objectives and not solely the technologies.
It’s traveler versus hotel revenue manager when it comes to finding the lowest hotel rate. Comparison shopping is unfortunately still essential as the chaos of managing multiple distribution channels sometimes get the best of the hotels. Deals my pop up in unlikely spots, disappear completely from the most obvious places and create deals that may not be as attractive as presented. This example is for The Mauna Lani Bay Hotel on Hawaii’s Big Island. At least they don’t charge resort fees…
A recent Orbitz press release touted “Orbitz Launches Groundbreaking Hotel Search Experience with Industry-Leading Property Comparison Features.” In reality, the changes are incremental, mostly derivative and unfortunately not significantly innovative. With Orbitz indicating that growing its hotel business is a top priority, they need superior product functionality to climb back up to last year’s second place share of unique visitors from this year’s fourth place share. While the enhancements give Orbitz functionality similar to its competition, its price guarantees remain the most customer friendly in the industry.
Hotwire appears to be testing the ability for travelers to select a specific bed type from participating hotels offering opaque product with its new Bed Choice option. This move benefits travelers by offering greater choice, and hotels with the attractive capability to upsell. This further differentiates Hotwire from Priceline who has not fundamentally changed its Name Your Own Price hotel product since its inception. A greater question is how this move impacts OTA share in the opaque product space and hotel profitability if it increases opaque product sales.
The hotel merchant tax issue is creating havoc for online travel agencies. At the present time, more than 200 municipalities, counties and states have lawsuits pending in an attempt to claim additional tax revenues based on the markups applied by Online Travel Agencies (OTAs.) In some cases, the suits are groundless as the current hotel occupancy tax laws are based on the revenue received by the hotel. However, some cities are changing their tax laws to base the taxes on the retail price paid by traveler. Unfortunately, there is widespread confusion – this article attempts to provide clarity on the key issues and a recommendation for resolving the hotel merchant tax problem.
Contract negotiations between Choice Hotels International and Expedia have broken down, resulting in Choice brands being removed from Expedia’s websites. As negotiating power now favors Online Travel Agencies, hotel brands must maintain discipline to retain mutually beneficial terms. Seeing continued declines in both occupancy percentage and average rate, hotel owners may be willing to exchange future margins for immediate business volume. Hotel brands are challenged to maintain chain-wide pricing integrity and competitive positioning the economy improves. Hotel brands able to maintain strategic alignment with its hotel portfolio will have the best prospect to emerge stronger when the industry recovers.
The online travel industry may be well positioned for a radical step forward and Google may be the organization that can make it happen. A recent Forrester Research report has indicated that travelers are highly frustrated with the online travel experience. Online travel companies have been criticized for an apparent lack of organic innovation. Travel aligns nicely with Google’s mobile strategies and appears to be a perfect fit with the Google corporate philosophy.
Online travel agencies such as Expedia, Travelocity, Orbitz and Priceline are being subjected to lawsuits from a large number of cities claiming that they are underpaying the hotel room tax on stand-alone hotel bookings. A $184 million consumer class action lawsuit was recently filed in Washington State against Expedia that now opens a new front for these online travel agents to defend.
Online travel companies Expedia, Travelocity, Orbitz and Priceline have grown substantially through acquisition of small entrepreneurial organizations that have created innovative online travel technologies. Critics say that the online travel industry reached a functionality plateau and the online travel companies have difficulty with organic innovation. The root cause may be due to the trade-offs involved when managing for quarterly profits and investing in R&D for longer term success.