TDS16: Data sharing is the vital ingredient in mutually beneficial supplier and OTA relations

A key theme at this week’s Travel Distribution Summit was, unsurprisingly, the evolving relationship between supplier and retailer, direct and indirect channels.

A key theme at this week’s Travel Distribution Summit was, unsurprisingly, the evolving relationship between supplier and retailer, direct and indirect channels.

In a session on effective relationship management delegates were told suppliers should regard their OTA partners as working for them, in effect as junior sales teams.

Nick Young, senior director of partnership at Hopper, the mobile-only flight booking app, said OTAs should specialise in non-core areas and not be “knocking on the same doors”.

Young was sharing the stage with one of the world’s most powerful intermediaries, Booking.com, and so his views were particularly pertinent for many suppliers in the room.

One area he was particularly keen to stress was the value and importance of having a truly collaborative approach to sharing data.

Only when this happens can suppliers know that their OTA partners are working on their behalf to drive the sort of incremental business that Booking.com’s director of hotels Remco van Zanten said it does.

“It’s natural for OTA to guard their data closely, it’s also natural for suppliers to cut OTAs off. I think the right answer is sharing data and for suppliers to push OTAs to share market data.

“There is a lot suppliers could learn from OTAs in terms of their data. Not only who is purchasing what but what their conversion is in certain markets and also in terms of customer behavior.

“I really encourage more sharing of data whether it’s formal or informal; talking to your OTA partners about what they are seeing, what’s working and what’s not.

“Incentivise OTA customers to hand off customers after booking. If they are comfortable with what they are doing then they should be comfortable to hand off to you.

“It’s better for day of travel logistics to be in the hands of the supplier. They [customers] should not really be in the hands of the OTA at that point.”

Young said mobile is seeing the emergence of deep linking within apps so this hand off can happen and the consumer can start to engage with the supplier or download their app.

He said OTAs should be rewarded for driving earlier bookings because these are more likely to result in additional ancillary sales for the supplier or bookers who are less likely to cancel.

“Require OTA partners to show they will improve yield, not just capture volume,” he said.

“If they want to sell your products, analyse how they acquire users to see if they acquire users the same way as you, if they are just buying your keywords.

“If there’s no meat on the bone there they will look to you to push down their prices. You need to see PTA partners add value and specialise to purchase your product.

“If they do not do that, that’s not a partnership you want to build.”

Van Zanten said OTAs should be considered like a supplier’s department store versus their own branded flagship store, that give them breadth and choice.

He said: “We are all serving the consumer to give them a great experience. In the end the one who is paying in the consumer.

“We help to give them a frictionless experience to make that choice. If you do not leverage that trend someone else will.

“Consumers are getting power and transparency to make the best choice for their needs.”Herve Gilge, managing director of consultancy Alvarez and Marcal, said: “OTAs already have big power and influence in the industry.

“The battle lines are around customer experience and customer relations and the booking itself is not secondary but what everyone wants is to get customers to book hotels.

“The critical issue is whether the industry will move towards sharing information. How do you create that discussion between OTAs and hotels and other intermediaries?

“I suspect we will see some movement on that over the next few years.”

The hotelier on the panel, Fergus Boyd, director of digital and IT at Yotel, said it was hotels’ fault that the OTAs have become so dominant and expensive.

“We need to improve our customer proposition,” he said. “The market will be led by the big payers. God bless Hilton for their ‘do not click around’ campaign.

“I’m looking forward to the new Marriott appearing [after the Starwood merger] who will knock on the doors [of the OTAs] and say ‘we will pay you 10%.”

Gilge said hotels were “behind the curve” when it comes to investing in a consistent convenient experience. “Customers do not care if instant book is on Booking.com or any other platform. They do not understand.

“What they understand is user experience. Hotels have to accept that they have not invested enough because their core competence is running the hotel.

“Data is where the value is. Players at the two ends of the spectrum realize they can’t do what they want to do without data sharing.

“They [OTAs] need to bring value to their partners to justify their commission. That’s how people are going to be working with partners going forward.”