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Is TripAdvisor turning into an OTA with its Instant Booking Model?

TripAdvisor has recently unveiled their direct booking feature, which offers users the option to book hotels within its site. Officially called TripConnect Instant Booking, this function has already created a lot of buzz in the industry.
I attended a session at WTM, where TripAdvsior gave a rough sketch on how the model works.  This will allow users to research, compare, choose and now book hotels, in other words, complete the buying journey while staying within TripAdvisor user experience.
This is a major shift in TripAdvisor’s revenue model, which earlier relied on advertising. Only last year, the travel giant had revealed its meta-search service, where a supplier  uses TripConnect CPC (cost-per-click) to place bids to appear in the price and availability search results. With the new model, TripAdvisor has introduced a commission based ‘bidding model’, where suppliers like OTAs, hotels, GDSs bid on a commission percentage they are willing to pay.
The basic difference between the CPC and Instant Booking model is that for the former, partners bid via cost-per-click for the top positions, and pay when users click on that link, whereas in the new model, they pay TripAdvisor a commission once the user completes their stay.  In the earlier model, suppliers required bid management strategy to be on top position, and directing traffic would not necessarily lead to conversion. The Instant Booking gives them 100% return on investment; in addition they will own the data, can view traveller profile and be the pointof sale collecting the payments.
If it reminds you of the traditional OTA model, you are absolutely right. But does that mean TripAdvisor is aspiring to be an OTA? According to analysts, this is an extremely smart move by TripAdvisor to improve monetization of its mobile channel.  The site gets around 110 million monthly unique visitors, about 40% of its total traffic, but accounts for less than 20% of desktop when it comes to monetization.
With mobile booking rapidly growing in US, Europe and APAC, Instant Booking, which allows users to book a hotel room while staying on the TripAdvisor user-shell will encourage more people to book, and therefore improve conversion rates. To make it more attractive for partners, TripAdvisor is using the Top Position of it search result and extending Premium Certification to enjoy benefits like tradeshow and online promotion to those signing up for this programme.
For independent hotels struggling to improve position in a channel where big OTAs with larger marketing spends typically dominate, this can be a golden opportunity to get direct bookings at a lower cost per acquisition, and to increase distribution on distressed inventory or increase direct bookings in low periods through improved mobile booking experience.
Choice Hotels International, Best Western, GetaRoom.com, Amoma, Tingo and GDS operator Travelport have already signed up for this programme.  In fact for TripAdvisor, Travelport’s listings for 580,000 hotels worldwide, including 480,000 non-branded properties and 150,000 e-commerce enabled listed properties can be the biggest coup for this program.

Presently pilot testing on global Mobile and certain US desktop IP addresses, the program is expected to be globally rolled out early 2015. With Google Hotel Finder also testing Buy Now in the UK market, does this indicate a new trend to look out for in 2015? It certainly looks so!
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Host Hotel Systems integrates with eRevMax for seamless online booking connectivity

Host Hotel Systems have recently completed a two-way interface between HostPMS and eRevMax, allowing HostPMS users to fully utilise the advantages of both systems at once. Through this interface the accommodation providers will be able to manage automated online inventory updates, and standardised rate changes across the multiple channels.
Marketing Manager Joao Rodrigues of Host Hotel Systems anticipates that this integration will improve overall customer satisfaction and will give them the ability to expand their distribution portfolio to reach out to vast audience. He also thanks to eRevMax for this integration which removes the need for manual input.
Commenting on the integration Chief Operating Officer of eRevMax, Greg Berman said this integration will help Host customers to get automatic updates in real time across all connected channels.

Using Connect, a SaaS based enterprise connectivity solution from eRevMax; HostPMS users will be able to increase their web presence through greater access to marketing channels.

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OTA Consolidation – preparing ourselves for better sales procedures

In recent years there have been big changes within the travel industry, but perhaps none quite so big as the ongoing consolidation of some of the major players in the OTA sector. In the past few years we’ve seen Go Voyages merged into the AXA brand and Amadeus sold Opodo in 500 million Euros. There are remarkably few mid-sized OTAs left, so how is this affecting OTAs, customers, and other divisions of the travel industry? For hotels themselves, the outlook is good. With consolidation helping the OTA market to grow by an estimated 25 percent each year, there are more and more opportunities for increasing visibility.


In the competitive market ‘Big boys’ in the travel space offer consumers a better choice, but the way our industry has developed this fragmentation is causing consumer confusion without necessarily leading to better value. This is the reason hospitality industry moving to the positive direction that will simplify travel purchases through consolidation.

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Channel management is fundamental to hoteliers

Recent drops in currency value, increasing flight prices and recession-related job uncertainties have had a significant effect on the travel industry. Not only are fewer people travelling, but those who travel are becoming more budget conscious. Effective channel management can assist hoteliers with both issues – by increasing visibility and allowing for variable rate changes between seasons. Surveys suggest that the average hotel chain manages four separate third party channels, yet a failure to standardise data across the board can have negative effects. For effective channel management, an automated system is the preferred choice over manual upkeep, especially when increasing channel usage.

Today consumers compare rates in multiple price comparison websites and booking channels and selects lowest available rates of all. With channel manager revenue managers can more accurately forecast consumer behaviour and take effective pricing decisions for more online revenue. The challenge for many hoteliers in managing multiple channels to ensure accurate rates and inventory allocation to optimise each channel is very difficult. But with channel manager like RateTiger it becomes easier for hoteliers to take more effective pricing decisions.

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Barteo – 365nights.com completes XML integration with eRevMax

365nights has recently partnered with eRevMax, utilising the RateTigerdistribution system to make real-time ARI (Availability, Rates & Inventory) updates and receive bookings generated on the channel through eRevMax solutions directly into their property management system. The French-based company are confident that the ease of use and immediate results will boost their client portfolio whilst keeping existing users happy. 365nights chose RateTiger as they were looking to focus on “reliable connectivity which will save time and energy”, according to CEO Thomas Hiley and for a system that would simultaneously manage availability, rates, and inventory.

Launched in 2013, the France based price comparison site allows potential guests to negotiate on the price of the room directly with the hotel and in real time, before making an actual booking. Greg Berman, Chief Operations Officer at eRevMax said with this partnership 365nights.com will become certified eRevMax channel ecosystem partner through which both the channel and the hotels will be benefitted.
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Improve direct booking through incentives

Mega online travel agencies are costly distribution channels for hoteliers. Hoteliers suffer from huge amount of revenue loss due to the high commissions charged by the Online Travel Agencies i.e. from 10-25 percent. So how can hotels bring customers to their own website for direct bookings instead of visiting an OTA?  A recent survey conducted among 2500 customers by Software Advice finds the answer:-
If a hotel wants to implement your suggestions on offering a free room upgrade or any other perk, how and when should they do this?
Our survey showed that consumers don’t agree on what free room upgrade they prefer, so it’s best for hotels to have a variety of room types available. This upgrade should be promoted to travelers at every possible chance: social media channels, the hotel’s booking page, within hotel marketing emails and other materials.
Is it really cost effective to offer a traveler a free room upgrade just to get them to book direct, saving the hotel the 10-20% OTA fee?
An upgrade to a room with a better view shouldn’t cost the hotel much, but the cost effectiveness of offering a room with a kitchenette, balcony or living room will depend on the particular hotel’s availability, rates and season. Even if the incentive costs as much as the OTA commission, the hotel has an opportunity to delight the guest and drive brand loyalty.
Even though a perk like free room service wasn’t the most popular incentive, do you feel it could still convince travelers to book direct?
I think free room service is a strong incentive for consumers to book directly, as the results showed that travelers are highly motivated by offers of food and drinks. Food is also a relatively low-cost offer for hotels.
Should hotels take the traveler’s age into consideration before offering perks like these, or even certain kinds of perks for certain age ranges?
In general, perks for free food and drinks should be effective for all ages, but different types of gift cards can be more effective for different ages. For example, our survey shows an older couple might respond better to a gift card for a local restaurant, while younger travelers could be more convinced by a gift card for a local theme park.
Were you surprised by any of the survey results?
I think it’s reasonable to expect people to be motivated by food and drinks since dining is such an important and often expensive aspect of traveling. However, I was surprised that the results for the most convincing room upgrade were split so evenly.
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eRevMax Channel Ecosystem connects with leading Japanese OTA for deeper integration

Rakuten Travel has become the first Japan-based OTA to partner with eRevMax, utilising the ARI abilities of both RateTiger and Connect to offer greater opportunities to their clients. Rakuten Travel had noticed the changing trends within the travel industry particularly that travellers are now looking for more choices, competitive rates and last minute deals. This integration is become the part of Rakuten Travel’s global expansion says company president Takanobu Yamamoto.

The largest online hotel reservation website of the Japan, Rakuten Travel, currently connected with over 80,000 hotels worldwide including approximately 30,000 hotels in Japan, will be able to gain access to broader products and more availability, improve booking conversion and increase revenues as part of its growth plans across South East Asia, USA and Latin America.

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Why It’s Time to Include Meta Search in Your Distribution Portfolio

Hotels around the globe are being told to prepare for the metasearchera, and that includes changing their marketing strategies, outlook, and software systems to make the transition from solely direct and OTA bookings to direct bookings via travel oriented meta search engines such as TripAdvisor. Meta search is fast becoming the ‘goto’ method of travel booking, up by 13 percent in the past year alone. Why? Not only are the younger generation of travellers more web savvy, but travellers today are also striving to find the best deals to meet strict budgets. Utilising meta search channels isn’t just about staying in the game, it’s about diversifying audiences, increasing visibility, and boosting brand reputation across multiple platforms.

Meta search allows for visitors to book either through OTAs or through the brand website, helping to increase direct sales. Meta search sites such as TripAdvisor have been criticized for favouring OTAs with which they have a partnership, but direct information is available, which is more than can be said for OTAs themselves.

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The Indian Traveller 2014

The third largest economy in the world India is becoming on the major player in travel space. Despite a slower economy and foreign exchange volatility, over 15 million Indian travellers are planning foreign trip shows an infographic, recently released by eRevMax. The Middle East and Far East have certainly been leaders so far but interestingly, India is catching up.  The infographic reports that 33 percent of travel-related searches within India are now made online, with mobile being the preferred choice. The solutions provider suggests regional online travel agents should focus on connecting the hotesl of Middle East and APAC region to gain more revenue.


To access the full infographic, click Infographic: The Indian Traveller 2014
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Newshound: Trends and Reports – Hotel Online Distribution


GHOTEL hotel & living selects RateTiger for smart online room distribution

German hospitality group GHOTEL hotel & living has selected RateTiger’s industry leading Channel Manager to maximise its distribution reach for its unique accommodation offerings by updating distribution channels efficiently in real-time.
http://www.eglobaltravelmedia.com.au/z-more/technology-more/ghotel-hotel-living-selects-ratetiger-for-smart-online-room-distribution.html

The Future of Hotel Marketing: Social Media Synopsis
Hotel chains that are open to 24/7 online social communications with their fan base can sense the power of a free flowing exchange of ideas, and capitalize on a low-cost marketing channel solution. Communication with customer base via social media channels is now expected as standard, whether these platforms are utilized to shape brand image, facilitate user-generated content or compliment a targeted pay-per-click campaign, social media is vital to the success of a hotel property.
http://hotelexecutive.com/business_review/3441/the-future-of-hotel-marketing-social-media-synopsis

Data transformation key for revenue managers

As more data becomes available, revenue managers must be able to filter and make sense of only the best information in order to achieve their goals, sources said during a Hospitality Sales and Marketing Association International (HSMAI) webinar. “Some people may say that we’re drowning in data, but I think it’s more accurate to say that we’re drowning in information,” said Kevin Coleman, partner and COO at Intelligent Hospitality, a hotel business intelligence company that provides reporting and analytics for hotel sales, marketing and revenue management.
http://www.hotelnewsnow.com/Articles.aspx/10263/Data-transformation-key-for-revenue-managers

A Call to Arms: How to Shift Market Share from the OTAs to the Hotel Website

 
This year, the hospitality industry is in for a lot of pain. OTA dependency continues to plague the hospitality industry, despite gains in the past three years and positive trends in all three industry indicators. This isn’t new. What’s new is the pain to the bottom line inflicted by the fat commission checks hoteliers are now paying Expedia and other OTAs, due to the widespread adoption of Expedia”s and Booking.com”s agency model in the U.S.
http://www.hospitalitynet.org/column/global/154000392/4060290.html