Has the time come for the disruption of online travel agents (OTAs)? It has been 20 years since Expedia launched its first online travel site, completely revolutionizing the travel industry. But many would argue it’s time to disrupt their game.
You don’t have to go far to find a disgruntled hotel manager or owner when it comes to the ever-rising costs of the OTAs. It’s an all-out war to remove OTAs from the landscape. But how? To date, there has been no platform that has any real potential to impact the hold that OTAs have on hotels. Brands and OTAs have messed around with rate parity, frustrating hoteliers even more. Brands try to leverage loyalty and offer value adds that the OTA can’t but that has had little impact on the soaring OTA usage and costs. So, what can a hotel do to reduce these OTA costs and not lose share?
A Danish company has developed a peer-to-peer, cloud-based application that allows hotels to have travel agents and corporate travel managers book their rooms without any fees. Both the hotel and the agents purchase a modest subscription and that’s it, no percentage of spend. In a typical hotel picture, a $12,000 U.S. spend in the traditional OTA arena would produce enough commissions to pay the annual subscription fee and the meter stops there. Every reservation and all spend from that point on is free of commission or any other fees. The hotel only needs one subscription for all traffic regardless of segmentation or the orientation of the business. On the travel agents’ and corporate travel managers’ side, they currently use the OTAs to book rooms for their clients.
The average reservation equals 38 different websites used to research and ultimately book what’s needed for their clients. Most of the visits are needed to compare rates, policies, amenities, and services. With the “Request for Proposal” RFP platform, all the travel planners and agents need to do is drop a pin on the area they are looking to find accommodations in, put in a few modifiers, and the hotels respond with pricing that is not commissionable. This pricing is not in the public domain and not subject to rate parity. The RFP system has over 350,000 hotels in its database for travel planners and agents to choose from.
The system grew out of an apartment exchange site that had some popularity, it was called Shevana. The original idea was to make the travel planner’s life easier. There really is not a convenient, modern, and cost effective platform for their use. Not until now.
The technology is a breakthrough for hotels and travel planners. It’s a breakthrough because the current requirements to book this type of accommodation must pass through a beleaguered landscape of outdated and expensive technology. This new platform resets the game so to speak and now the customer and the hotel can communicate seamlessly with one another—like in the old days when the travel agent or the travel planners would call the hotel reservations department directly and get a great rate and service for their clients. Well the old way is back with a new set of tools, and maybe it’s time has come.
About the Author
David Lund ‘The Hotel Financial Coach’ teaches advanced leadership training that guarantees your financial success and increased profits. Get a free copy of his new guidebook “7 Secrets to Grow Your Hotel Profits Fast’ at www.HotelFinancialCoach.com
We also have WETU where travel agents can get predesigned and written information and rates for Lodges provided by the lodges themselves and was developed here in South Africa. Company´s pay to be registered on the WETU site and agents don´t have to cut and paste or design itineraries anymore as it is all predesigned and posted on WETU.
Hi David Lund,
Great article and thank you. Could you share the name of the Danish company you mentioned?
Let me know and thanks,
Jeff