Online Travel Agencies and Suppliers: the Seemingly Eternal Battle

By Blake Suggs Account Director & Integration Specialist, Range Online Media | January 27, 2012

No one would dispute that OTA's and Hotel Suppliers are irrevocably tied together, but over the years the love-hate relationship has gone through several evolutions, each of which has borne out a valuable lesson. Obviously the ultimate goal for a supplier would be to have every booking come through its .com. This hasn't happened, and it most likely won't ever happen. The primary reason? Today's travel buyers like to shop and see what's out there. With the economy as it is, more than ever, the ones that are making travel plans are taking every step necessary to shop for a rate that will allow them to stretch their dollar as far as they can. When there are fewer travelers, which is happening now, the tension escalates even more because the Online Travel Agency and the Hotel Supplier are fighting even harder for that dollar. Which goes along with the next point, travel is a large investment, and large investments necessitate research. According to YPartnerships, in 2000, 35 percent of travelers were already using the Internet for research, while today 66 percent do.

If you asked an OTA about what they do, they would tell you they're an online travel company that addresses customers' needs in every area of the buying cycle. They typically take ownership for setting the pace for Internet bookings, rich inventory content and innovative online services for travelers.

If you asked a supplier what an OTA is to them, their reply would probably be something very simple like, "They're a distribution partner that provides another channel for selling our rooms." It's a story of competing views, which are starting to merge … slowly but surely.

To understand the phases of the relationship between the Online Travel Agency and the Supplier, you have to understand the history. Yes these phases are generalized, but bear with me.

2001-2002: OTAs – who are these guys? The meteoric rise of the OTA was a surprise to most people, or at least to those who didn't work for one of them. They filled an immediate need by centralizing the entire travel buying experience. While working hard to become the travel agents of the future, they were also slowly killing off traditional travel agencies.

2003-2004: OTAs are awesome! Inventory providers – airlines, hotels etc – hit a bit of a stride with the OTAs during this time. They were growing their overall bottom line through distribution, but almost immediately the market became very crowded. The limited opportunities for distribution partners to control their own destiny through strategies like premium placement and off-site linking weighed heavily in the shift to the next phase.

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Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.