Airbnb and Google made notable announcements in the first
week of February – the former opening its platform to hotel distribution and
the latter rolling out updates to expand and simplify travel search.
Both moves are indicative of the evolving landscape in
distribution, creating new challenges to online travel agencies and additional options
for hotels and other accommodation providers.
Google is known for its focus on user experience, and Gino
Engels, co-founder and chief commercial officer of online revenue management provider OTA Insight, says
that could give it an advantage in luring travelers who have been using OTAs.
“If Google gives a better experience for travelers, then it
could be a good opportunity for hotels to fight back from OTA dependency,” he
says.
Google is focusing on its mobile interface, adding a new
navigation bar that puts common tasks on one screen with simple swipe-and-click
functionality.
Engels says this is a smart move as mobile becomes more
popular for travel planning, especially among millennials, and it could drive more
bookings through Google.
Next steps
But just how aggressive will it become in courting this
business?
Engels says he expects Google will continue to move into
booking “gently,” to maintain the lucrative – but increasingly delicate -
relationship it has with OTAs, which pump billions of advertising dollars into
the search platform.
And to counter this challenge to its dominance, the OTAs
could take steps to undermine hotels that ally with Google.
“The OTAs have a lot of leverage and power,” he says.
“If they see a big drop-off from hotel bookings, and if they
see they’re losing clicks, they will try to use their power to de-rank the
hotels on their own platform, to push up hotels that are not actively pushing
their own hotels via Google.”
Another opposing strategy for the OTAs: upping the
commissions charged to hotels.
More challenges
Meanwhile the OTAs are also coming to terms with Airbnb’s
foray into hotel distribution.
For now, SiteMinder is the only platform that has been given
the right to list its properties on Airbnb – and at a low service fee of 3% to
5%, a direct challenge to OTAs that are often criticized for charging much
more.
Engels says these new choices offered by Google and Airbnb
are good for suppliers, but the onus is on each individual property to
determine the right channels to optimize bookings.
And he suspects the OTAs will find a way to prevail in this
ever more crowded field of hotel distribution.
“The OTAs have been leading the charge for a long time. They
haven’t been challenged,” he says.
“So I think it’s definitely good that these innovations are
moving us forward and give more opportunities for hotels and consumers. It’s
definitely an interesting time that will challenge them, but OTAs are in their
position because they are very strong players, so I think they will find a way
to outmaneuver this new challenge.”