OTAs Remain Relevant During Good Times As Well

The recently concluded Hunter Hotel Conference offered the industry yet another chance to bask in the glow of the good times. And, most executives did just that with panel discussions centering on the industry’s ability to raise rates and the new spate of brands coming to market.

However, one topic of conversation that continues to dominate the discussion, despite the industry’s good fortunes, is the impact of OTAs and other online travel companies. It was widely assumed several years ago—when the Expedias and Pricelines of the world emerged as key distributors of hotel inventory—that, when the industry rebounded, these channels would be largely irrelevant. Think again.

Best Western International CEO David Kong continued to pound home the point as he has at other recent events that these companies are only going to get bigger in size and scope as they gobble up more sites. In fact, during the conference, I moderated a session entitled “It’s a Brand New Day,” during which one prominent brand executive boldly stated, “If we don’t watch out, Expedia is going to be all of our bosses.”

You can substitute Apple, Google or Microsoft if you want, but you get the point. Today’s consumers, many of which happen to be Millennials, are every bit as loyal to these brands as they are to hotel flags regardless of incentives from loyalty programs and the like. Many of these new brands may be geared and designed for Millennials, but you have to get them in the door first.

Further driving home the point during “The President’s Panel,” Dave Johnson, president of Aimbridge Hospitality, added, “If I was running a major brand, I’d be scared.” The fact of the matter is the industry has had no real answer to these online giants. The impact of Roomkey.com—a consumer site launched a few years ago by a consortium of hotel brands in an effort to take share away from the OTAs—has been negligible. I can’t remember the last time I heard a brand executive even mention the site. Unfortunately, it seems to be a case of too little, too late.

In a classic case of ‘if you can’t beat them join them,’ Kong continues to preach not only partnering with these companies in terms of distribution, but supporting them with ad dollars as well to gain much needed visibility on their sites. While it may seem counterintuitive, the fact is treating these sites like competitors isn’t going to get it done, especially when the cycle turns again—and, unfortunately, we all know it will.