TDS2015: OTAs on top in battle for loyalty in hotel sector

TDS2015: OTAs on top in battle for loyalty in hotel sector

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Hotel companies should embrace online travel agents rather than resist them, according to the director of distribution at citizenM Hotels.

Lennert De Jong told the Travel Distribution Summit in London this week that there is a new loyalty to booking brands, which hotels will struggle to ever match.

De Jong highlighted that booking.com, for example, now has 500,000 properties, and the low app download figures for some of the big brand hotels compared to the main booking brands.

He acknowledged many hotels seem to be unhappy with OTAs they accuse of dictating terms and extracting high commissions while also competing against them.

And he said hotel operators do not necessarily have the know-how or skills to develop new technology, and perhaps do not need to in order to compete directly with specialist retailers.

“The category killers are purely digital and are not in the business,” he said. “They have enough scale and target audience. There is a new loyalty to booking brands. A complete shift is taking place.”

De Jong said Booking.com now wants to be told when a customer checks in, and started sending citizenM anonymised client email addresses of guests last week.

“I’m not saying this is bad,” he continued. “Coke doesn’t sell bottles of Coke itself, but it doesn’t get annoyed with its distributors. Our industry is fragmented. Mass consolidation is awaiting.”

Instead of focussing on developing a competitive retail app, citizenM is instead producing one that looks after customers once they are at the hotel, with features such as a door-locking service.

The idea is for the app to ultimately be made available for any hotel firm. “Let other businesses be successful,” said De Jong.

De Jong questioned why it is that hotel brands continue to be held back expensive and inflexible property management systems (PMS) providers.

He said the advent of cloud-based systems and proliferation of providers now means it is easy to switch partner to develop the sort of in-hotel services customers are demanding.

“Dictate your own relationship with your tech vendor,” he said. “Don’t be afraid to throw them out.”

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