Writings
Building
Better Connections in the Global Travel Marketplace
There
are comforting constants in this business. Gracious hospitality, fresh linens, and morning coffee
in an oversized robe all call to mind the rich traditions
of the hotel industry. Yet behind the familiar images,
there's a rapid evolution underway in how the many
features and benefits of the hospitality industry
are marketed and sold to customers. There are new
ways to connect suppliers and travelers. There are
emerging technologies for more effectively matching
supply to customer demand. The rapidly developing
world of customer-generated content is but one example
of where the industry is just beginning to learn the
extent to which these emerging technologies can shape
the decision process of customers as they select the
accommodations and other services which best meet
their needs. Because these technology and business
innovations will lead directly to better processes
and more satisfied customers, I believe they will
greatly benefit the industry as a whole. I also believe
they will catapult the relationships between online
travel agencies (OLTAs) and hotels beyond that of
supplier and distributor to one of true strategic
partners.
Over
the past decade, the OLTAs have played a major role
in the evolution of the industry by driving the development
of new technologies as well as many of the new business
and revenue models that are reshaping how travel is
bought and sold in the global travel marketplace.
It is the intersection of these transformative technologies
and innovative business and revenue models that will
drive the future of marketing and sales in the hospitality
industry. For OLTAs, what this means for the coming
years is moving beyond channeling large volumes of
relatively untargeted customer demand to suppliers.
Instead, we'll move toward a more intense focus on
bringing together the right customers with the right
hotels. Everything else will flow from that.
The
ability to bring the right travelers to the right
suppliers will be driven by new yield management services,
new forms of fenced sales and distribution channels,
as well as powerful marketing and merchandising opportunities
that more fully leverage the tremendous reach of global
media companies such as Expedia, Inc.
For instance,
with consumers showing a strong interest in travel
shopping by theme, compelling opportunities already
exist to market properties and destinations associated
with themed experiences.
Several OLTAs, including
Expedia.com, currently offer an array of vacation
packages, ranging from exclusive luxury escapes to
family weekend getaways, destination stores, and unique
tailored promotions. In
the coming years, we will also see the implementation
of both new and existing technologies that will allow
the OLTAs and other tech-savvy organizations to better
manage the dynamics of supply and demand. This will
mean improving efficiencies in travel supply chains
and optimizing pricing and inventory management systems.
To take one example, evolving CRM (Customer Relationship
Management) technologies will better connect suppliers
and customers via increasingly targeted and tailored
package offers to travelers in ways that directly
reflect real-time and forecasted inventory availability
as well as optimal revenue management strategies.
One
vitally important trend we’re likely to see
is the growing use of customer feedback and other
user-generated content. There are a number of ways
that OLTAs and other companies with a significant
Web presence might choose to highlight and use this
type of content to the benefit of both customers and
suppliers. For example, wiki spaces, in which users
both write and edit one another’s travel tips,
personal experiences, property descriptions, and other
topic-specific information, are proving incredibly
popular forms of online themed communities.
Several
OLTAs and travel media companies have already leveraged
traveler-generated content to great success. For example,
TripAdvisor is the world’s largest online travel
community -- its active members numbers in the tens
of millions -- and it consists almost entirely of
member-created content that other travelers clearly
find valuable and compelling. Another implementation
of user-generated content, currently deployed by Hotels.com
and several other OLTAs, involves accepting postings
only from individuals who have actually stayed at
a particular property. OLTAs have also found ways
to offer this unbiased, user-generated market analysis
to help customers select the right property for their
specific needs. Moving forward, OLTAs are well-positioned
to take the wealth of customer feedback and other
insights generated out of these communities back to
hotels and other supply partners as value-added market
intelligence.
The
evolving efficiencies and economies of scale offered
by leading OLTAs will mean that we’re increasingly
positioned to provide more value to more customers
and more supplier partners. This will benefit both
the largest hotel businesses as well as thousands
of unique, individually owned properties that comprise
the diverse ecosystem of this industry.
Look
for these and other key trends in the year ahead.
I look forward to enjoying the journey with you
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