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Hotels & OTAs

Hotels & OTAs






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    Hotels & OTAs Hotels & OTAs Presentation Transcript

    • Hotels & OTAs by Aurore Virnaud Novembre 2011
    • Tourists get social and mobile
      • Tips from people worldwide
      • Interactive bookings
      • Mobile travel guides
    • Travellers are active social media users
      • About 79 million people (52% of the 152 million adult leisure travellers) already use social media.
      • More active on Facebook, social sites, daily use of the internet
      • Still rely heavily on « traditional » sources of informations : firends, family, brochures, media …
      • So social media is still at an early stage
    • Different Booking Models
      • Merchant website : Third-party distributor where the hotel provides inventory to the site at a net rate. The merchant marks up the rate by an agreed-upon percentage. The consumer pays the merchant at the gross rate and the merchant site pays the hotel the net rate (e.g. Expedia, Hotels.com, Travelocity, Orbitz)
      • Opaque website : Third-party distributor that enables customers to choose a fare or rate without knowing the brand of the supplier until after the item is purchased (e.g. Priceline, Hotwire)
      • Brand website : Website where distribution is operated and managed by the brand (aka “brand.com,” the direct booking channel)
      • Retail website : Third-party distributor where the hotel lists inventory at the same price that it is sold to the consumer and hotel pays distributor agreed-upon commission (e.g. HRS, Bookings, Venere)
      • Source: TravelClick
    • What is an OTA ?
      • Websites on the Internet dedicated to travel and booking capabilities.
      • Help hoteliers to capture reservations they would not have normally captured through their own hotel reservation website.
      • Provides global exposure
    • The « Big Four » OTAs
      • Expedia
      • Travelocity
      • Orbitz
      • Priceline
      • They get a lot of attention from the media and the industry at large.
    • Expedia Inc.
      • The largest online travel company in the world
      • Extensive brand portfolio that includes :
        • Expedia.com
        • Hotels.com
        • Hotwire
        • Venere.com
        • Egencia
        • Classic Vacations luxury travel specialist
        • eLong
    • Travelocity.com
      • Subsidiary of Sabre Holdings Corporation
      • Sixth largest travel agency in the United States and the second largest online travel agency.
      • Offers deals from most of the world's airlines, hotels, car rental companies, and vacation packages.
      • Brand portfolio that includes :
        • Lastminute.com
        • Zuji.com
        • World Choice Travel, a travel affiliate marketing program
        • IgoUgo, an online travel community and travel-planning resource
        • AllHotels.com
    • Orbitz Worldwide
      • Uses innovative technology to enable leisure and business travelers to research, plan and book a broad range of travel products.
      • Strong global portfolio of consumer travel brands that includes :
        • Orbitz.com
        • CheapTickets.com
        • ebookers.com
        • HotelClub.com
        • RatesToGo.com
        • the Away Network
        • Asia hotels
        • corporate travel brand Orbitz for Business.
    • Priceline.com/Booking.com
      • Booking.com = part of Priceline.com
      • Europe's leading online hotel reservations agency by room nights sold, attracting over 30 million unique visitors each month
      • Offers competitive rates for any type of property, from small independent hotels to a five star luxury.
      • The site is available in 21 languages from and offers over 71000 hotels in 71 countries.
    • Hotels get a better positioning thanks to OTAs
    • Hotels & OTAs, not a bliss
      • In the past : OTAs allowed hotels to choose to participate on 10% commission retail basis, and they would access rates and availability from GDS
      • Now : OTAs would not promote your hotels unless you switched to a merchant model basis where you would give a deeply discounted net rate and then they would mark it up significantly.
      • Hotels have less control on their prices
      • High commissions to pay when there is a decrease in their average daily rate
    • Direct Chanel vs. OTA
      • I took the example of the hotel Intercontinental Paris Le Grand :
      • On the hotel website : a standard double room for two persons, night of December 16th costs 284€ ( see here )
      • On Expedia.com : a standard double room for two persons, night of December 16th costs 284€. ( see here )
      • As we can see, the rate is the same, but chec k on the links and you will find out that if you book directly through the hotel website you will have more choices than those proposed by Expedia.com.
      • Moreover, the Expedia.com deal is not refundable !