Hotels and OTAs - A love hate relationship

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Hotels and OTAs - A love hate relationship

  1. 1. Hotels and OTA’s a Love-Hate Relationship By Charlotte Humnicki
  2. 2. I. Literary Review• OTA’s are increasingly influential because : – The number of online users is increasing – The crisis has made many hotels cut their marketing costs (OTAs prevailed) – They increase the information availability and thus increase buyer negotiating power – Tend to harmonize prices due to the previous sub point – OTA’s are less popular for upper luxury segments
  3. 3. I. Literary Review• Social media such as facebook and social booker which integrates the latter are interesting because: – Distribution costs are lower – Hotels delegate marketing to fans who spread the word – Bookings are facilitated – Gives another marketing channel on the web which is more dynamic, interactive, and perhaps reassuring to the consumer (other than the website)
  4. 4. I. Literary Review• Benefits of skyscanner: – Perhaps hotels could use the interface to monitor prices of flights and develop pricing strategies accordingly – Lower flight prices increase customers – Perhaps hotels could have a link with the skyscanner ?
  5. 5. I. Literature Review• On the other hand, hotels now have tools to adequately manage their online reputations (market intelligence): – See their current positioning – Know information about competitors’ pricing strategies – General consumer views
  6. 6. II. Additional Articles and Research• Online reputation is important because the customer is not only booking more online, but also undergoes increasingly more research.• The importance of the hotel website is decreasing due to the latter.• Some hotels use social interface booking integrated systems to: – Adequate way to limit 3rd party sites by convincing through social media sites (The Grand Wilshire Hotel in West Orange, NJ) – Manage reviews more adequately
  7. 7. II. Additional Articles and Research• Due to the crisis hotels have increasingly turned to the internet channels and have made them more competitive.• With the evolution of digital marketing new challenges have appeared. – Black mail: Anonymous reviews on OTA’s have lured some guests into threatening hotels of writing damaging reviews in exchange for discount prices – Insufficient in laws and regulations in the authenticity of guest reviews and guest IDs – Accusations by 3rd parties that hotels are writing false ‘idealized’ reviews
  8. 8. III. The Effects on Costs• Hotel prices are inelastic and thus a reduction in costs does not generate an increase in sales large enough to be beneficial on the ADR• Increasing information availability due to OTA’s and 3rd parties drives prices down and buyer power up.• Prices of rooms are lower within the presence of resellers.
  9. 9. IV. Examples (Paris)• Le Bristol – No.2 on tripadvisor.com, rate for 750€ – Only positive reviews but no management comments – On website, room for 800€ – Links to facebook and twitter – Page takes a long time to load, not easy to navigate
  10. 10. IV. Examples (Paris)• Hotel Fouquet’s Barriere – Trip advisor.com: 4.5 stars rating, 12th in Paris, 730€ – Review: “Un sejour parfait”  manager’s thankyou and detailed response to each review – User-friendly website, easy to make reservations
  11. 11. V. Sources• 1.Travel Companies Must Take Online Reputation Management Seriously NOVEMBER 23, 2011 http://www.emarketer.com/Article.aspx?id=1008706&R=1008706• 2.Hotels collect guest reviews from Facebook November 18, 2011 | Hotel Marketing http://hotelmarketing.com/index.php/content/article/hotels_collect_guest_reviews_fro m_facebook• 3. TripAdvisor reviews used by travelers to blackmail hotels November 23, 2011 | Hotel Marketing http://hotelmarketing.com/index.php/content/article/tripadvisor_reviews_used_by_tra velers_to_blackmail_hotels• 4.The holidaymakers blackmail: Hotel guests using threat of poor TripAdvisor reviews to demand free upgrades and refunds More than 80 hotel and B&B owners believe travel website was used as weapon against them By Keith Gladdis http://www.dailymail.co.uk/news/article-2064616/TripAdvisor- reviews-used-holidaymakers-blackmail-hotels.html?ito=feeds-newsxml

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