Why Airbnb competes with OTAs The more intensive more profitable for hotel Let me analyze it for you

Original: Li Sheng

Currently

Although most of larger hotel groups

All CEOs said their direct hotel sales are doing well. They still recognize their own brands and major OTAs.

For example, Expedia and Booking.com continue to work closely together

Previous example

Hilton CEO

Christopher Nassetta

I'm currently being asked about a recent Airbnb

When short-term rentals are a threat to hospitality business

He said

Airbnb is actually becoming more of an OTA. And says it's "good" for hotels

Because it might get others to like it

Expedia and Booking.com

Such companies increase their competitiveness

Nassetta

Announced at last month's Hilton meeting for second quarter

Competition is good, and competition in cohabitation industry is getting bigger

My main idea is that this is just another travel scene

We don't directly compete with what they do

Therefore

There is more competition between them, which is good

They have more competition

Airbnb is more like an OTA

This is good

I don't know if they do it or not, it's not up to me

The more intense their competition, better for our development situation, because in theory, increased competition will lower prices and distribution costs

So I see this as a long-term wrestling match. In future we are waiting for 2, 5, 10 and 20 years

But I think that as competitive environment intensifies, this will eventually lead to good results

I already see some signals

Example:

Airbnb transforms into a new type of OTA

Airbnb has been on cusp of a crisis lately. Last week, platform announced that it currently has 4 million ads posted on platform

Almost half of them can be booked instantly like a hotel

However. Nassetta

This view of market competition is nothing new

Many hoteliers hoped that TripAdvisor would compete with OTA in terms of lowering hotel accommodation costs.

Whether this is actually case remains to be seen, and it is unlikely to happen in near future

Although their competition sometimes benefits us

Hotel operators also face stiff competition

Especially in some large markets where there is sometimes an oversupply, such as New York

Understood

Many hotel executives expressed their opinion on current situation with development of hotels at meeting on results of second quarter

I talked about hotel's relationship with Expedia and Booking.com

Example:

Hyatt said

We didn't leave Expedia

Don't give up direct hotel sales

Among major hospitality companies, Hyatt made headlines for a dramatic contract negotiation process with Expedia

Hyatt CEO

Mark Hoplamazyan wants to refute rumors and fix problem

I spoke with him at Shanghai summit. He said:

I'd like to talk about our channel strategy, which includes working to increase bookings through Hyatt's channel

To strengthen relationships with customers. For example, we recently launched My Hyatt Rate discount program for new markets

.

Streamline your hyatt.com booking experience

Adding new features to World of Hyatt mobile terminal

Simultaneously

I recognize value OTA has for Hyatt, they make guests think of Hyatt immediately, these guests may be infrequent travelers or customers who book through OTA websites for other reasons

I would like to share an update on Hyatt's effective and efficient use of third party distribution channels

We recently agreed to strengthen our relationship with Booking.com with several new initiatives

Existing partnerships, plans to increase efficiency and flexibility while stimulating demand

In addition

We have had many effective discussions with Expedia to optimize our marketing practices and strengthen our partnership

We have reached an agreement. Upon final approval

We look forward to continuing to distribute Hyatt properties on Expedia platform

We value our partnership with Expedia and Booking.com

We do our best to provide guests with best possible experience and help hotel owners maximize their income

and

Goplamazyan

Also mentions World of Hyatt, Hyatt's new loyalty program

The program was first launched in March and is still being accepted by users. However

This program was ranked 4th in latest News & World Report Best Loyalty Programs in United States

Goplamazyan

Saying: Overall, I'm pleased with World of Hyatt's development and customer feedback

The number of people who have joined this loyalty program has increased significantly compared to last year, and focus on loyalty program is more optimistic than expected at time of launch

Therefore

We have received very positive feedback from customers, which is reflected in number of new members, number of retained members and consumption of members

Also said:

"The Hyatt My Hyatt Membership Benefits Program has also increased booking rates and member discounts

Over 70% of bookings made at Member Discount Rates are made by new and inactive members

Since launch

Roughly half of new and previously inactive members have made more than one booking, and we've seen repeat charges from them

For those hotels that have agreed to offer discounts on accommodation to members of loyalty program

Their income from available room index has also increased

However

Marriott: Website Pricing Transparency

Marriott CEO

Arne Sorenson

No direct mention of OTA and Airbnb

However, he noted that in current distribution environment, it is difficult for hotels to maintain a high level of room prices.

This is not only due to influence of Airbnb and many other booking sites

He said:

The focus in hospitality is not on co-living model or other disruptors, but more on transparency

Over time, it becomes easier to find out room rates for each hotel in our system

Therefore

The information on Marriott.com is as transparent as it is on other platforms. With more active participation of franchisee

More and more hotels are engaging in self-pricing, I think that's environment we're in

But that doesn't mean we can't raise house prices in future. We have ability to raise housing prices

Especially

Weekday evenings when other hotel rooms are fully booked

But I think this is not kind of environment we have experienced in last few years, we can be more flexible

Selected hotels:

The effect of direct sales is good

Selected hotels

New CEO

Pat Pasius said

The hotel's loyalty program and Choice Privileges memberships drive company's direct sales to record levels

He said

Our loyalty program recently surpassed 32 million members

2.5 million new additions this year

In particular, membership fees booked through our website or mobile app have generated good returns for our franchisees

Revenues from our own booking channels are also improving. In second quarter, revenue from exclusive booking channels reached 51%

An increase of 360 basis points over last year, setting a new record for second quarter