Why Airbnb must avoid the tech trap OTAs fell into for years
01/31/2019|6:02:53 PM|PhocusWire

Airbnb hailed its move into the small boutique hotel and B&B space as the start of a new order in the world of online travel agencies.

Look out, here we come, we mean business - it went large on that message!

From our side, and from probably the rest of the channel manager/property management ecosystem, it’s seen as a very welcome intervention; here at last is someone with the clout to shake things up a bit.

Anyone can see that it’s a monopoly - duopoly at best - and that just isn’t good for any market.

For our clients (thousands of fantastic small B&Bs and hotels), this was even more welcome news; they’re desperate for less commission-hungry models and love the idea of more diverse distribution.

Here also was a channel that wants to celebrate their strengths: the high-touch personal service, passion and depth of local knowledge - their unique and varied offering.

If this gets rolling, it’s going to really rock the boat. Although small in size, these types of properties account for a significant proportion of the listings on OTAs. 

They also add that all-important ingredient to the conversion sauce: variety. Without a healthy dose of these properties, any OTA site is going to look a little dull.

But, if there are two things we have learned about OTAs in the last six years of connecting to them as a channel manager, it’s that they all suffer from egos about their own technology, and that connectivity boosts bookings dramatically.

Getting the (tech) house in order

By their backends, I mean their extranets (the bit that properties are supposed to log in to and update continually), and by connectivity, I mean access to a property’s management system or channel manager.

Airbnb is the most recent victim of this ego mania, but they are in great company.

There was a time five years ago when even the biggest would stipulate that a property had to have been using their extranet for three months before they would consider connecting to an XML partner for channel management.

Fast-forward to today and the very same OTAs measure connection time in hours.

Looking back on the emails we sent trying to persuade the OTAs to connect, it all feels quite strange.

Why did we have to shoot out so many emails, build business cases for them to persuade them to connect availability?

The simple answer is probably that they were in false love with the extranets they had spent lots of treasure creating and wanted properties to keep logging in every day to update them.

After doing the numbers, the OTAs soon realized that connected properties could provide over five times the number of bookings compared to non-connected properties.

Why? Simply because the properties don’t like logging in or updating multiple extranets, and they fear getting double booked if they have availability on more than one distribution channel.

Once properties connect, the OTAs will mostly have access to all their units (none held back) and last-room availability right up to the last instant (none held back). Bang!

They get over five times more bookings from that property!

Connections are everything

I don’t want to single out any OTA for this, because, at the same time, another OTA would simply not connect properties with under 21 rooms.

It was another four years before they realized how much opportunity they were missing by not investing in the technology to connect and essentially remaining disconnected to large volumes of inventory that the other OTAs were busy connecting to.

One can forgive Airbnb for a year or two, it being a little late to the game, but it is now the most disconnected channel.

Emails have gone back and forth for years, and the ego continues to cost it availability. Many thousands of properties already featured on Airbnb are manually updating their inventory or, as we all know, probably not doing it at all.

For Airbnb to really accelerate its move into this market (one year on) and become a meaningful player, it must get connected to as many technology partners as possible, get access to more inventory and serve their existing partners better.

It’s really not that hard.

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