Waters Between OTAs and Hotels Remain Stormy
The waters between hotels and OTAs remain stormy, as hotels try to step up their loyalty programs and book direct strategies without jeopardizing their relationships with OTAs.
Hilton and Marriot have both recently launched major Book Direct campaigns. However, Hilton’s CEO has recently moderated his public stance by emphasizing the value Hilton places on its relationships with OTAs. While this is a reasonable step to take, it somewhat undercuts the campaign’s otherwise straightforward and compelling message that booking direct is best for consumers (and the hotel).
Meanwhile, loyalty programs are being seized upon by hotels and OTAs alike, as hotels try to capture repeat business and OTAs respond to the threat of the growing book direct movement.
Lastly, Expedia has rolled out their new Accelerator program. Accelerator allows hotels to increase their commission payments in exchange for a higher ranking on the site – without this extra payment being revealed to consumers. Perhaps unsurprisingly, this new program is drawing fire from hoteliers across the board, although some see it as a valuable opportunity.
Ready to find out more? Check out the full stories below.
Loyalty programs had been a somewhat neglected weapon in the marketing arsenals of both hotels and online travel agencies until recent months.
Major hotel chains have been adjusting their loyalty strategies to support the campaigns. Last Friday CNBC interviewed Marriott CEO Arne Sorenson, and he said, “I think the most important thing for us to succeed at is the loyalty program.”
At the same time, major online travel companies are dusting off their loyalty programs and retooling them to encourage more repeat business.
In February, Hilton Worldwide launched its biggest advertising campaign yet, pointed very directly at one main target: online travel agencies (OTAs), like Expedia.com and Booking.com.
Called “Stop Clicking Around” its message to customers was this: There’s no other place on the Web that has the lowest guaranteed room rate than on Hilton websites.
Needless to say, that advertising campaign didn’t sit very well with the CEOs of the online travel agencies, and it only added more kindling to a fiery booking war between hotels and OTAs.
Yesterday at the World Travel & Tourism Council’s Global Summit in Dallas, however, Hilton Worldwide CEO Christopher Nassetta seemed to temper his company’s official stance on booking direct.
Beginning in April 2016, Marriott introduces Marriott Rewards Member Rates, a new rate exclusively designed to reward loyalty members who book directly on Marriott.com and its apps, through call centers or through select corporate travel professionals. Today, the company officially launched its campaign with more details.
Expedia’s new Accelerator program is generating controversy – and for good reason. Many hotelier and hotel groups, including the American Hotel & Lodging Association, view the Accelerator program as harmful to customer choice. The AH&LA said that “the program will severely jeopardize consumer choice in the hotel booking process,” calling it “highly problematic”. Other hoteliers believe it simply represents an opportunity to put heads in beds in times when it’s difficult to get occupancy rates up.
While the Accelerator program is set to shake up Expedia’s site, for better or for worse, the fundamentals remain the same for independent hoteliers: A good book direct strategy, when paired with wise management of a hotel’s OTAs, remains the best way to get heads in beds while maximizing revenue.