REPORT FROM THE U.S.—As hotel rates continue to climb toward previous peaks, suppliers must be cognizant of new and emerging channels within the distribution space, according to panelists Tuesday during an HSMAI webinar titled “Leveraging Emerging Channels.”
Platforms such as Hipmunk, Global Hotel Exchange, Simple Honey and Google Hotel Finder could help hoteliers get over the hump—an obstacle that has proved more challenging in some markets than in others.
Cornell School of Hotel Administration
As of May, for example, New York has seen a $33 increase in average daily rate, while Dallas and Atlanta have seen increases of $2, according to data from STR, parent company of HotelNewsNow.com.
“Due to the large amount of discounting over the last few years, it’s going to be hard to get that consumer confidence back,” said Brittany Baldwin, director of business development for destinations at STR.
The right distribution strategy might help in those efforts, said panelists, who highlighted notable platforms in the realms of meta-search, “day of” and flash sales.
GHX, for example, offers free reservation services for hotels and grants them complete control of all pricing. There are no “middleman” fees, said Chris Anderson, associate professor at the Cornell School of Hotel Administration. Consumers are charged an extra $2.99 service fee, which they pay when they arrive at the hotel.
Hipmunk is a commission-based search model that makes it easier for the consumer to compare the tradeoffs between options. Hotels are sorted by “ecstasy,” which takes into account the price, amenities and reviews.
Roomkey.com, the collaborative metasearch effort of several major hotel companies, is an option for hoteliers looking to reduce commission costs to the online travel agencies. Independent properties also are welcome to place inventory on the site.
Room 77 operates with the goal of decreasing distribution costs and commission fees for the supplier. On the consumer side, the site allows for unique searches for qualified rates, such as AAA and senior discounts, among other filters.
Simple Honey markets itself as a search engine that fosters increased happiness and more positive reviews for hotels. It asks travelers for their travel preferences and shows personalized results using its matching algorithm. Since the “right guest” makes it to the “right hotel,” guest satisfaction will be higher.
And finally, Google Hotel Finder, whose search results are at the top of Google’s organic search, seems to be dominating among the newer meta-search sites, Anderson said.
Given the success of the Hotel Tonight mobile app, several OTAs have started to mimic the model for their own apps, Anderson said.
The concepts of Hotel Tonight, Priceline Tonight-Only, Booking.com Tonight and Hotels.com Tonight’s Local Deals are similar. They all serve as an opportunity for hotels to unload same-day distressed inventory. Booking windows begin around noon and end anywhere from 11 p.m. to 2 a.m. on the night of the arrival.
Hotel Tonight, however, gives hoteliers complete control of rates and has no restrictions or obligations.
Travelocity’s Mobile Exclusive Deals operates on a somewhat different format, giving hoteliers the opportunity to unload distressed inventory two days before check in. Still, 60% to70% of the mobile bookings are same-night stays.
Although “flash” is not necessarily an emerging channel, it is still relatively new to consumers, Anderson said.
That said, “it’s becoming quite crowded,” he added. With Travelzoo, Jetsetter, SniqueAway, Expedia ASAP, Groupon Getaways, LivingSocial, TravelTipping and Bloomspot Travel all on the scene, it can be overwhelming for a consumer to keep track.
EveryLodge is a solution to that, Anderson said. It allows consumers to look at all the hotel deals in a more consolidated method. The only problems are that sometimes the inventory tends to be inaccurate and not all deals are listed.
The new OTAs
Jay Hubbs, VP of regional sales for ReviewPro, outlined some of the newer entrants to the OTA space and the effect they will have on distribution.
BackBid, which has made headlines for its method of making hotels bid against one another for the consumer’s business, does provide some benefits for hotels, Hubbs said.
For one, it’s a good way to sell distressed inventory. It’s also a good way to secure business by offering additional value—not by discounting, he said.
Guestmob is a semi-opaque booking platform that reduces risk for hotels. Inventory is released the Thursday before check-in when it is clear the room will not be sold on the hotel’s site or on other OTA channels.
HallSt.com, which has a European focus for now, follows a peer-to-peer model, allowing consumers to buy and sell their prepaid rooms. Hotels also can put inventory up for sale with a “name-your-own-price” option.
Tingo is a new take on Orbitz’ Price Assurance, Hubbs said. For consumers who book within a longer window, they are refunded if the price of the room drops after they buy.
Social media as a distribution channel
Online reviews are becoming increasingly influential for guests before they book, Hubbs said.
Millennials are especially in tune with what others are saying before they buy. Thirty-nine percent of millennials will not book a hotel without taking in some sort of user-generated content beforehand.
And while both Facebook and Twitter continue to influence consumer behavior, hoteliers should keep an eye on other user-generated-content sites as well.
Picasa, for example, is a photo-sharing site that 26.3% of travelers use to post content about hotel stays.
While it is still difficult to measure the return on investment of social media, hoteliers should monitor how many tweets or Facebook posts they get and whether or not they are positive, Hubbs said.
“If you’re never doing that, I can tell you it’s definitely having a detrimental role in your business,” he said.