Hotels, OTAs find limitations in failing to work together
Duetto's Michael thought hotels should avoid acquiring guests by sacrificing prices and recognize the need for balanced distribution.
McCartan is managing director Europe, the Middle East and Africa at Duetto, a post he has held since December, 2014, where he handles the rollout of Duetto’s services and the ongoing development of its customer success teams throughout the region. He also feels strongly about the interactions between hotel companies and OTAs.
Ahead of the panel, here are five observations McCartan shared on the state of hotel/OTA relationships.
1. Hoteliers are warming up to OTAs
Anyone who has attended a brand conference in the hospitality industry can attest that no matter how hard executives try to steer conversations away from OTAs the topic always comes up. McCartan said that hotels by and large felt they were at the receiving end of a raw deal when it came to OTAs, as what began as a cozy relationship between hotel operators and budding technology companies feeding them bookings evolved into lopsided deals with little recourse for operators.
2. Direct booking campaigns have limitations
While OTAs are willing to work on more equitable terms with hoteliers than before, McCartan said these terms are often still not to hotels’ liking in many cases. Hotels still feel like they are held hostage by the power and sway of OTAs, which is why there has been such a groundswell of support for direct booking campaigns as hoteliers feel pressured to find new avenues for guest acquisition.
3. Hyatt could have succeeded if isolated from Expedia, but it would have cost them
On the subject of risky moves, McCartan said that Hyatt’s recent decision to walk away from and then return to Expedia for distribution is not the first time such a thing has occurred, and said OTAs like Expedia and Booking.com have such breadth and depth in the market that cutting them off is a huge risk and “smacks of desperation.” In fact, every company that has tried to walk away from Expedia has had to come back eventually, according to McCartan, even a company as large as Hyatt.
4. Hotels have one major advantage over OTAs: Access to guests
One thing OTAs like to claim is that they don’t own the guest, just their journey, but McCartan said they don’t even own that. Despite their immense reach and the power of their distribution system, OTAs aren’t able to service guests on property, and so despite whatever they do to encourage guests to book at your hotels at the end of the day they have to hand that guest over to operators to have them fulfill the stay.
It sounds like the life hack to end all life hacks, but McCartan said hotels drop the ball in the one area where OTAs have become masters: taking the guest stay to the digital space. The digital experience behind hotels must become more personalized to allow hotels to understand the likes and dislikes of individual guests, then translate that information into action once they are on property. Because of this, OTAs will always be at a disadvantage due to lacking the physical aspect of the hotel experience.
5. The future will be decided by cooperation, not war
Up until now, McCartan talked a lot about how hotels can react to OTAs, but he conceded that the hospitality industry is mostly static and averse to change. It is the OTAs, McCartan said, that are fluid and ever changing. They understand that to stand still is to die out, and will always be ahead of the game in terms of risk taking and innovation. For this reason, McCartan called out to hoteliers to innovate as much as OTAs do, first by strengthening online operations and tie it to the guest experience in person.
Beyond that, he also urged OTAs to react to the changing attitude of hospitality companies and extend an olive branch of cooperation, and even weather the storm of indignation that is sure to come as hoteliers gradually continue to drop their guard.
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