This is the continuation of a series of articles spun out of tnoozLIVE@TTE, recorded live at the TTE event Olympia, London. More clips to come! To learn more about how to bring tnoozLIVE@ to your event, please email Ella Sopp.
The hospitality industry is the midst of enormous change with new entrants and distribution channels making for a complex mix. OTA Insight is in a good position to observe the trends and how they might shake out, CCO Gino Engels spoke to tnooz managing editor Linda Fox for tnoozLIVE@TTE.
Linda: So, for our final session of tnoozLIVE@ TTE today, I'm here with Gino Engels. He's chief commercial officer for OTA Insight. Gino, if we could start with an overview of where the hotel distribution landscape is right now, I mean, you're in a really good position to see what's going on in, and the relationships, etc.
Gino: Yes, definitely. It's in a very interesting place. I think especially for all the players involved, the hotels, first of all and the online distribution channels and there's kind of new channels coming up everyday. So, the alternative recommendation, peer-to-peer economies I think. We're in a very fast-paced environment where basically complexity is increasing a lot. But at the same time, it's a massive growth channel. So, there's a lot of opportunity. So, I think we're at the good spot for a technology provider like us because we are there to help unravel the complexities and help make the most of this opportunity. I think we're definitely at a junction in terms of players that are going to take advantage of the complexity and other people that will be at risk of being left behind, unfortunately.
Linda: And you mentioned more new channels there. Where do you particularly see, when it comes to hotel distribution, more disruption coming this year?
Gino: Well, I like what Airbnb is doing in terms of the kind of alternative recommendation to vacation rentals. I just read an article the other day where Gillian Tans from booking.com said they're going to actually put major focus on vacation rentals on the platform. The acquisition of Expedia of HomeAway which is basically going to be integrated in their platform. So, it's going to be a massive growth engine for the OTAs. So, from that perspective, the hotels are going to find some cross pollination from that market People who used to be booking in alternate accommodation will potentially upgrade to hotel for a different occasion. But the major threat is still for hotel bookers that are going to more descend into the pleasure segment where more corporate travel is going to look at alternative longer stays where the family that comes over to book into a different channel. So, I think, again, as I said before, opportunity but at the same time, there is the risk of people looking for these new channels and booking them at risk of kind of dropping out for the hotels.
From another side though, like what we've seen with Airbnb now, allowing sites to connect via SiteMinder and distributing their rooms. That's actually probably quite welcome competition and the power struggle between Priceline and Expedia, and then Google also trying to take their share of it, I think Airbnb coming in with a new alternative offering at a lower commission percentage for the boutique hotels, it could be a nice welcome opportunity. They've got the power. They've got also a lot of marketing budget to spend. So, it's nice.
Linda: So, there was, it seems like about 18 months ago, the atmosphere between the OTAs and the hotels, on the one hand, you had this sort of direct campaigns from the big guys. But also on the other hand, you had real moves from the likes of Expedia to sort of help them out with marketing campaigns with data type analytical tools. As in, where do you think that is now? Is it friends? Is it enemies? or is it frenemies?
Gino: Yes, the term has been used so many times. When we got started back in 2012 it was kind of just getting started and they were all good friends and I think that it evolved a little bit, and like you say, last year, it's probably gone to the top of the kind of frenemies relationship but I will say where really kind of direct booking campaigns was, kind of a direct action from the big global players to gain some market share back, and I think the - especially Expedia, I think probably also booking.com tried to respond with offering revenue tools or actually a suite of tools as solutions to be seen as helping the hotels out which I think for some they are doing. For other ones, I think there's probably still a lot of efforts that could be done to work better together with the hotels.
I think sharing data is probably, of course, data is power and they know why they probably are limited in sharing some of the data. If they really would be friends, I think that would be a very nice step for them to do. But I think they're definitely there very big players in this ecosystem and the big global hotel chains need the OTAs, OTAs need inventory from big global hotel companies. As I said, Google is getting more and more involved in the play. Airbnb is coming at another angle. At some point, Facebook will become more prevalent or whoever knows, Amazon will give it another try and they're kind of probably most of the people have an Alexa in the office. If you want to do some research on where to find a nice hotel for your next trip, potentially you ask Alexa. So, they're still not out of the game.
So, I think everybody in the ecosystem realizes things could change quickly and it's better to be friends than being on bad terms with each other because at some point, we are all kind of still need each other in this ecosystem.
Linda: And you closed a funding round of $20 million, I think it was, in December. So, congratulations on that. Tell me what your spending priorities will be with that funding?
Gino: A big portion of that is going to go to our IT and our technology stack. As we mentioned before, technology is moving so fast and it's a very fast-paced environment. We've been here for about five years and we've seen change so quickly so, we need to make sure that we stay up at the forefront as well. So, we're investing a lot in machine learning and AI. We've been very good at collecting a lot of data. We've got massive databases on pricing, review, rating, feasibility information. It's kind of how are we going to learn better ourselves internally to get kind of the right insights from it and being able to get some concrete information or some concrete actions that are going to help hotels make the right decision in this complex environment. So, big priority on that and then apart from that our footprint globally.
We launched about year and half ago in the US. Currently, it's already our biggest market globally in terms of clients. So, we got more than 2500 hotels using our solution there. But there's still so many untapped potential. If you're looking at the market and the growth in the online distribution space or the online bookings, Latin America market, Asia Pacific. Just earlier on I presented a the slide on Eastern Europe and the Emirates. So, they're all growing so fast and we have a limited kind of footprint. So, get some more feet on the ground, some more people selling our solutions, and some more people marketing in those areas. So, those are going to be probably the top two investments for us in the coming two to three years.
Linda: So, just one final thought from you. You're funded, you've been going since 2012, you've got some good traction. What keeps you up at night?
Gino: Probably like, "How can we stay ahead? What is going to make sure that we'll be a player in the market that people want to turn towards in terms of asking for advice, in terms of relying on to bring the newest technology or the newest data that's going to make sure their business is profitable, and make sure their business is up for - basically, is ready for the next step in the digital revolution. People talk about blockchain, about AI and hotels must be very concerned on how are they are going to rely on partners to keep us informed, keep us in the forefront. That's the kind of thing that keeps me awake but in a good sense, thinking how are we going to respond to these new developments.