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Hotels & OTAs


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Hotels & OTAs

  1. 1. Hotels & OTAs by Aurore Virnaud Novembre 2011
  2. 2. Tourists get social and mobile <ul><li>Tips from people worldwide </li></ul><ul><li>Interactive bookings </li></ul><ul><li>Mobile travel guides </li></ul>
  3. 3. Travellers are active social media users <ul><li>About 79 million people (52% of the 152 million adult leisure travellers) already use social media. </li></ul><ul><li>More active on Facebook, social sites, daily use of the internet </li></ul><ul><li>Still rely heavily on « traditional » sources of informations : firends, family, brochures, media … </li></ul><ul><li>So social media is still at an early stage </li></ul>
  4. 4. Different Booking Models <ul><li>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,, Travelocity, Orbitz) </li></ul><ul><li>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) </li></ul><ul><li>Brand website : Website where distribution is operated and managed by the brand (aka “,” the direct booking channel) </li></ul><ul><li>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) </li></ul><ul><li>Source: TravelClick </li></ul>
  5. 5. What is an OTA ? <ul><li>Websites on the Internet dedicated to travel and booking capabilities. </li></ul><ul><li>Help hoteliers to capture reservations they would not have normally captured through their own hotel reservation website. </li></ul><ul><li>Provides global exposure </li></ul>
  6. 6. The « Big Four » OTAs <ul><li>Expedia </li></ul><ul><li>Travelocity </li></ul><ul><li>Orbitz </li></ul><ul><li>Priceline </li></ul><ul><li>They get a lot of attention from the media and the industry at large. </li></ul>
  7. 7. Expedia Inc. <ul><li>The largest online travel company in the world </li></ul><ul><li>Extensive brand portfolio that includes : </li></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Hotwire </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Egencia </li></ul></ul><ul><ul><li>Classic Vacations luxury travel specialist </li></ul></ul><ul><ul><li>eLong </li></ul></ul>
  8. 8. <ul><li>Subsidiary of Sabre Holdings Corporation </li></ul><ul><li>Sixth largest travel agency in the United States and the second largest online travel agency. </li></ul><ul><li>Offers deals from most of the world's airlines, hotels, car rental companies, and vacation packages. </li></ul><ul><li>Brand portfolio that includes : </li></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>World Choice Travel, a travel affiliate marketing program </li></ul></ul><ul><ul><li>IgoUgo, an online travel community and travel-planning resource </li></ul></ul><ul><ul><li> </li></ul></ul>
  9. 9. Orbitz Worldwide <ul><li>Uses innovative technology to enable leisure and business travelers to research, plan and book a broad range of travel products. </li></ul><ul><li>Strong global portfolio of consumer travel brands that includes : </li></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>the Away Network </li></ul></ul><ul><ul><li>Asia hotels </li></ul></ul><ul><ul><li>corporate travel brand Orbitz for Business. </li></ul></ul>
  10. 10. <ul><li> = part of </li></ul><ul><li>Europe's leading online hotel reservations agency by room nights sold, attracting over 30 million unique visitors each month </li></ul><ul><li>Offers competitive rates for any type of property, from small independent hotels to a five star luxury. </li></ul><ul><li>The site is available in 21 languages from and offers over 71000 hotels in 71 countries. </li></ul>
  11. 11. Hotels get a better positioning thanks to OTAs
  12. 12. Hotels & OTAs, not a bliss <ul><li>In the past : OTAs allowed hotels to choose to participate on 10% commission retail basis, and they would access rates and availability from GDS </li></ul><ul><li>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. </li></ul><ul><li>Hotels have less control on their prices </li></ul><ul><li>High commissions to pay when there is a decrease in their average daily rate </li></ul>
  13. 13. Direct Chanel vs. OTA <ul><li>I took the example of the hotel Intercontinental Paris Le Grand : </li></ul><ul><li>On the hotel website : a standard double room for two persons, night of December 16th costs 284€ ( see here ) </li></ul><ul><li>On : a standard double room for two persons, night of December 16th costs 284€. ( see here ) </li></ul><ul><li>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 </li></ul><ul><li>Moreover, the deal is not refundable ! </li></ul>