Innovations involving metasearch, mobile and social media are likely to shake up online travel agencies and how consumers book online.
However, it’s still too soon to predict exactly which players will dominate the changed online travel marketplace, says Cindy Estis Green, cofounder and CEO of Kalibri Labs, Potomac, Maryland. Having helped shape the landmark distribution study Distribution Channel Analysis: a Guide for Hotels released last year that showed hotels typically only win more customers at the expense of competitors and that lowering rate is generally an ineffective strategy to increase total revenue, Green’s Kalibri Labs is now working with internal staff and outside support on developing tools that can be used for hotel distribution channel diagnostics.
HOTELS spoke with Green on Friday to find out more about how online booking is evolving. More coverage of this topic will be featured in the March issue of HOTELS.
HOTELS: In a panel discussion at the HSMAI Revenue Optimization Conference this past summer, you said, “the OTAs are now the old guys on the market, worrying that mobile, social and meta-search could eat their lunch.” How will these new players emerge and how will today’s largest OTAs react?
Cindy Estis Green: I think the “metamediaries,” which is shorthard for saying they are metasearch and intermediaries, most of these new metasearch entrants will not be doing transactions on their platform. For example, Google and Kayak will not be doing transactions on their sites. Likewise, Tripadvisor is now doing metasearch.
People want to make travel booking easier and more user-friendly with metasearch and there are a lot of people trying to do that.
With the online travel agencies, we know they want to get into metasearch. There have been OTA investments in Kayak and Room 77, for example. You can bet the OTAs will not stick with the same model they have now and there will be a lot of competition.
As for mobile and social, they are all actually evolving into one. It was easy for us to talk about them as separate six months ago, but now we see they will all be one. The metasearches will all be on mobile and all have social sharing capability. Everyone is going to be on social and mobile. For now, there is lots of noise out there but the dynamic is that whether you do metasearch or are an OTA, there will be more homogenizing.
HOTELS: Do you expect OTAs to increase their market share over the next few years?
Green: It is hard to say how they are going to do in this new world. It is the “Wild West,” so to speak, and everyone is out there trying to get their share. It is not clear who is going to come out ahead.
The OTAs have a lot of options to reach consumers. They will try to provide the new metasearch and social websites the inventory, so what they can’t do on the front end, they will do on those sites’ back end. At the same time, OTAs will try to make sure they stay relevant. They want to improve their user experience with more engagement.
Everyone wants to be the place to go and I don’t know who is going to win.
It’s not clear at all that the OTAs are going to lose. It all matters who consumers end up liking the best.
HOTELS: Will using metasearch websites that offer direct booking for hotel website be a better deal for hotels than working with OTAs?
Green: Hoteliers will be paying either way. While I think it may be cheaper for hotels to be on Google Hotel Finder, for example, that might not be the only place the consumer goes. They may go to TripAdvisor first, or Facebook. Consumers don’t typically go to one place to book, so hotels may have to advertise in multiple places to drive consumers to book directly. At the same time, OTAs may become cheaper for hotels to use due to competition from the metasearches.