EyeforTravel: The Supplier/OTA Distribution Landscape

I’m here in Chicago for EyeForTravel’s Travel Distribution Conference. Over the next two days, I’ll be liveblogging each of the major sessions to share the best insights with you.

We start off with…

The Distribution Landscape: Who’s Running the Show – Suppliers or OTAs?

Presentations by:

• Melanie Ryan from Orbitz
• Julie Atkinson, Starwood
• Jake Stein, Expedia
• Ashwin Kamlani, AboutAnywhere.com

Melanie Ryan, Orbitz

Supplier/OTA relationship not about leverage…it’s about reaching beneficial partnerships that aren’t affected by the economy or consumer behavior. The goal of these partnerships is putting the right product in front of consumers regardless of what they’re looking for.

Major new developments OTAs are working on include:

* Total pricing
* Consumer guarantees
* Price assurances
* Mystery hotel sales
* Price maps
* Increased education (giving guides about how to book travel that maintains their interest: whether it’s luxury, green, etc)
* Trip planning
* Street views

Sales now is just about price…there are other factors in play. These new developments cater to the new trends.

OTA success depends on:

* Stable foundation & technology platform (OTAs investing a lot on tech right now)
* Building strong, long-term partnerships
* Consumer assurance
* Innovation
* Able to quickly speed ideas to market
* Consistent & strong marketing messages
* Giving consumers a very compelling reason to book

Who’s running the show? Who has the most leverage? The consumers!

Julie Atkinson, Starwood Hotels & Resorts

OTAs get first-time consumers in the door for new brands. They may book later directly & become brand loyalists.

OTAs provide international distribution, and significant marketing budgets that can supplement the hotels when times are lean

OTAs provide consumers with the “thrill of the chase” that hotels often don’t provide. It’s fun for them to get great deals…and they then talk about the great rates they’ve got. They have good marketing platforms that can help hotels promote packages.

Suppliers want customers to book on direct channels. They do this through:

* Building a robust loyalty rewards program
* Comprehensive SEO & SEM marketing plans
* Treat all customers exceedingly well

Jake Stein, Expedia

Consumers want good deal, but not just lowest price. They want value. Many consumers go to OTAs because they can get a great value package by purchasing everything together.

According to PhoCusWright, 87% of travelers found guest reviews from people they didn’t know influential in their travel decision.

OTAs provide “billboard effect” that gives great brand exposure.

Expedia research: For every booking we make on our site, we typically send the supplier two extra direct bookings.

People are going to shop. Let’s motivate them together to buy more travel.

Ashwin Kamlani, AboutAnywhere.com

The goal is to optimize your overall profits. OTAs can bring sales you otherwise couldn’t make.

How can suppliers be less dependent?

* Use social media effectively
* Facebook is NOT the answer. People find it intrusive when business is conducted there.
* Twitter has potential for generating direct revenue.

Customers frequently prefer hotel websites over OTAs because it’s more of a boutique shopping experience.

[Photo credit: cbanck]