Hotel companies should try to take advantage of a possible battle between online travel agencies and the ever expanding scope of the sharing economy.
The enemy of my enemy is my friend—it’s a concept so overdone in books, TV and movies it’s become a trope, a cliché. That doesn’t mean there isn’t some merit to it, however.
A writer at the Motley Fool speculates that online travel agencies now might have something to fear from the likes of Airbnb with the home rental company’s new business expansion: the “Trips” feature offers guests guided tours or “other adventures” for unique experiences in the cities they visit with the possibility of including flights as a future service. It’s an interesting thought that OTAs could feel the effects of a disruptor while they themselves are both a disruptor of the hotel industry as well as dependent upon it for business.
Should this play out as the article ponders, I’m curious to see how the hotel industry would react to such a situation. I see it having a few options before it.
One plan of action would be to stay the course. The industry could continue pushing back against OTA commissions by means of consolidation, loyalty program offerings and book direct campaigns. The American Hotel & Lodging Association would continue its campaign against home rental companies, seeking legislative and regulatory action to remove improperly zoned commercial rental units and seeking a level playing field in taxation as well as safety requirements. It’s a tried-and-true method and in some ways showing some results, but it doesn’t turn anything on its head and leaves two fronts for the hotel industry to battle.
Two other possible routes would create strange bedfellows, as the saying goes. The hotel industry has bones to pick with both OTAs and companies like Airbnb, but it also has several aspects in common with each.
One way would be for the hotel industry to deepen its partnership with the OTAs. There’s already an existing relationship between the two. Hotels get to sell difficult-to-sell hotel rooms and the OTAs get a cut of the sale. A renewed joint effort could enhance the value hotels offer to guests.
However, the commissions OTAs have been charging hotel companies for sales have soured the once mutually beneficial relationship. Hotel companies are doing everything they can to cut OTAs out of the reservation equation, so it’s doubtful the two sides would come together to protect their share.
An interesting development would be if hotel companies decided to work with home rental companies to push out the OTAs, possibly through joint ventures or investments. Some hotel companies have dipped their toes in the sharing economy. The concept is still new enough that the hotel industry could help guide the sharing economy in a direction that could complement hotels rather than compete against them. Hotel companies working with the likes of Airbnb could improve their marketing and advertising about unique, authentic local experiences to guests and cut out the OTA middlemen.
I don’t see OTAs and home sharing companies partnering up, at least not at this time. I don’t know if homeowners would be interested in losing a larger share of their rental income in having to pay commissions to both their own rental company as well as an OTA for advertising a discounted rate. Also, the way listings come and go so suddenly around major events, I’m not sure how well OTAs could handle the sudden surge followed by a dearth of supply.
Do you think such collaboration between the hotel industry and home rental companies could work? Is it a crazy idea? Uninspired? Have a better idea? Let me know. Leave a comment below or contact me at email@example.com or @HNN_Bryan.
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