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Hotel distribution is going to be an even more dangerous minefield in post-pandemic times, with players fighting harder and harder to get the same hotel booking.
But how different is hotel distribution going to be in 2021?
Any different? Or no different at all?
With this post I’m going to show you three different situations that might affect your hotel distribution and how the Online Travel Agencies are preparing for the rebound.
There will be news, but also situations that used to be happening in pre-pandemic times too, unbeknownst to most hoteliers.
Ready? Let’s dig in.
Hotel Demand and Supply.
It’s obvious, but we shouldn’t forget: there will be a rebound of course, but travel demand will be lower than a year ago, yet hotel supply has remained the same, more or less, and generally speaking.
This means that Hotel Distribution, which I like to refer to as our battlefield, will also be affected by an increasing number of players (OTAs, Metasearch engines, Tour Operators, Wholsesalers, etc) who will put forth any sort of actions, in order to win the deal.
Many of these actions being very borderline, to say the least.
Every single dollar counts. Not only for us Hoteliers, but also for these 3rd-party players.
In other words: if Hotel Distribution used to be very complex before Covid, now it’s going to be a total mess.
And when we talk about borderline activities, how can we not start by talking about Expedia?
Let’s see the real example.
Direct hotel trigger on Google, meaning the name of the hotel as keyword. In this case Bank Hotel Stockholm.
Let’s have a look at Google Hotel Ads:
Values are in Thai Bahts as I am physically in Thailand, with Google being able to automatically detect my location.
Visually speaking, EX is the go-to and cheapest hotel distribution channel, with the booking engine feeding Book on Google with higher and less competitive rates.
Let’s switch to US dollars though, as it may be easier to understand.
To do so, I connect to a server in the US. This way, the results on Google will come up as if I was in the US, and despite the fact I am physically in Thailand.
The discounted deal doens’t look so relevant, yet now all the 4 main slots on Google are prerogative of EX only, being Travelocity, Orbitz and Hotels.com part of the same group: that’s a powerful Hotel Distribution Strategy by EX, isn’t it?
However, even though visually the screen looks different, all the values are the same: EX offers the cheapest deal.
Let’s move on by clicking on the EX result.
As you might expect, that’s not the price EX should be coming up with (otherwise I wouldn’t be writing about it, no?).
Note in fact the 10% OFF on top of the price. Is it a discount normally applied by the hotel via extranet? Let’s see it.
Let’s click on this $210 deal to move forward and…
In no case this is something that you should see.
But I guess there is no need to explain the obvious, right?
Besides, let’s move onto the final step of the booking process and see what the final price is, including taxes.
Final price: $234.74 including taxes.
Now, let’s recap.
I’m a prospective customer of this hotel, searching for a room arriving on February 11th for 1 night.
I’m in the US (even though physically in Thailand, but as said I connected to a VPN in the US). The hotel is in Stockholm, Sweden.
Would perhaps the above scenario be different if I was in Sweden?
Country of the Hotel.
Point being, if this is a bordeline behaviour of EX (btw, you give your own meaning to the word borderline…), would the staff of the hotel see the exact same rates, when checking how their own property shows up on EX?
Presumably EX would prefer the hotel NOT to know about those weird discounts, right?
Let’s see then if, by making the exact same search, same hotel, same dates, same occupancy, we get the exact same final price.
To do so, we need to switch to a server in Sweden, simulating the booking search as if coming from there.
To be on the safe side, I might be running my check using Incognito Window of Google Chrome.
This is because Incognito Window inhibits cookies and browsing history in users’ browser.
In simple words, by using Incognito Window I will overcome the risk of being showed the same results that I previously saw when starting the search from Google, from the US.
Not getting into the technical aspects of this, but this is the role of cookies. And the reason why I always suggest to run such tests and checks using Incognito Window.
So now, very simply, let’s make the exact search on expedia.se, the POS of EX for Sweden, in Incognito.
2,200 Swedish Krona.
We will convert to US$ later on, but for now, you might have noticed that the 10%OFF offered in the first place is no longer there.
Same as before though, let’s move forward along the steps to the final price. Will it be the same as the previous search?
Expedia- and Hotel-collect now pop up with the same price, just as they were expected in the first place.
And in the URL, you might notice another input that highlights something weird:
URL parameters can have different meanings. Either way, most times they are used as a sort of filters: decorating URLs is common practice and nothing you should be worried about.
But the point is that they always have a meaning. So why having a parameter with value CURRENT_LOCATION?
Perhaps Expedia uses this value to show me the correct results, meaning the prices I should be seeing normally. And when not there… other prices?
Let’s get though to the final price, including taxes.
Let’s now compare apples-to-apples by converting 2,200 Swedish Krona to US dollars:
Domestic vs. International Search.
To wrap up, final price including taxes:
- From the US: $234
- From Sweden: $267
Want to get more direct bookings? Start addressing who is actually stealing them from your website and booking engine.
But now the point being: is really $267 the right price the hotel is expecting to sell throughout all the OTAs?
Short and straightforward answer: YES.
And the reason I know it is Booking.com.
So here we come to talk about what objectively has become a buzzword in the Hotel Industry: Metasearch Engines.
Even more so of a buzzword in the next future, when approaching post-pandemic times, because of the very reason I stated at the beginning of this post: lower travel demand, yet similar (or even higher) competition, also from all those Online Travel Agents responsible to distribute our hotel rooms.
However, MSE can be tricky at times, because the technology that is supposed to be supporting hotels’ distribution sometimes plays against the hotels.
In parity, but not in parity.
This is a typical example that I’ve seen thousands of times in recent years. And keeps repeating now.
Same hotel as above, same booking search, same everything. Let’s compare, for example, the direct price, as opposed to other channels.
An effective distribution strategy would entail the same rate, despite the number of OTAs.
Definitely not what we are facing here.
But what’s the right price? Meaning the price hotel is expecting to see, because that’s the one they have applied across all Online Travel Agencies, for that date?
As we’ve seen in the previous example, $210 is the discounted rate EX comes up with, when the search comes from a country that is not Sweden, where the hotel is located.
The next bottom rate is displayed by Tripadvisor.
Isn’t it weird? A Meta bidding on another Meta.
Then Booking.com at $238. Let’s see…
From $238 to $265, the difference is simply taxes included (on Google) vs. excluded (on Booking).
Let’s see the final price including taxes:
One of the many good things of Booking is that they always display the price in local currency, just below the one in the selected currency.
$267 = SEK2,200
The exact value we’ve seen in the example before of Expedia, searching from Sweden.
This is then the right price. The rate the hotel is expecting to see and received for bookings for this date.
Which, by the way, is also the direct booking price:
And here’s why an Online Travel Agent like Booking will often times win the value-perception battle over the direct channel: taxes included or excluded, depending on where the booking request comes from.
When looking for hotels and seeing a room price of €100 or $100 with no indication as to where taxes are included or not, EU travellers perceive that rate being inclusive of taxes.
Opposite to that, US travellers, for example, perceive it as exclusive of taxes.
Neither in Google nor in any other Metasearch platforms are tax details displayed in the first place, just like in the screenshot above.
In parity, but not in parity.
You see how your whole Hotel Distribution Landscape can be destroyed, simply based on this tiny little yet extremely important nuance?
Perception, in fact, plays a key role in Distribution, too.
And Metasearch engines are Hotel Distribution Channels, other than Marketing channels.
Even though what we just went through with EX and Meta may be new to many hoteliers, what follows is definitely a new entry.
And by new-entry I don’t mean a new OTA. Yes, Snaptravel is a new OTA, but the news stands in the way Snaptravel operates, which is quite interesting.
The new Amoma?
Same search and screenshot as before, Snaptravel was there among all other OTA websites.
If the parity rate is $238 net = $267 gross, Snaptravel is clearly below parity.
Let’s have a look by clicking the Visit site button.
You might be wondering where is Snaptravel getting hotels’ rates from, considering no hotel on earth has any sort of contract with them.
I first saw this OTA back in November 2020, keeping a constant eye on them ever since, specifically looking at the URL structure, which sometimes may reveal some information.
In there, I’ve always found the URL parameter provider having value = ean.
Likely, EAN stands for Expedia Affiliate Network, pretty self-explanatory name.
Basically it’s the program through which EX sells its hotel database to anyone who needs it.
Do you want to create an OTA site and earn a fee per booking, aka commission?
Nice, but can you imagine the hassle, technical and operational, to create your own hotel database, contractualize each and every one, having them upload rates and availability onto the extranet that you will have created in the meantime?
Then you will need to create an API/WebService so that ChannelManagers and Central Reservation Systems can connect to.
Costs for your technical infrastructures are already skyrocketing, and you haven’t even started to market your new OTA.
Instead, connect to the EAN and you’ll have all Expedia hotels listed and ready to be sold in your site. At no fixed costs, just split the commission earned with EX.
However, this is the boring part.
The interesting part, as said, stands in the Snaptravel’s approach.
As opposed to what most other hotel websites and travel sites that show a bunch of rooms and rates with their respective prices, Snaptravel’s first goal is to lock users in.
Get the deal either via Facebook Messenger or SMS, in order to get the special price.
So why specifically SMS or Messenger? Why not, for example a custom chatbot or tool? Why not Whatsapp?
Very simply, because Messenger and SMS allow Spaptravel to do Retargeting. For FREE. Whilst all other channels are very limited at doing so.
SMS: as soon as travellers opt-in with their mobile phone number, no one and nothing can prevent Snaptravel to send further SMSs to that user, in case for example he decides NOT to book. This is Free Retargeting.
Messenger: very few know that Messenger has a 24-hour window after the user initiates the message with a business, in this case Snaptravel, to send any follow-up (retargeting) messages.
And, more importantly, very few operators accept the fact that the vast majority of hotel online bookings do not happen in the first place.
There’s a reason why it’s called Booking Journey. Guests, before becoming so, are simply potential guests.
They need time. And that’s exactly what Snaptravel does.
In fact, I opted in for the Messenger option. And here is what I got:
The blue Get Started is a default message that indicates that I initiated the conversation with Snaptravel, by clicking the call-to-action Get Deal on Messenger in the landing page before.
Immediately the Snaptravel chatbot sent me a proposal for the dates that I searched and the hotel I was interested in (miracles of technology and definitely an interesting strategy).
(You might have noticed this is a different property, in fact, initially I didn’t plan to show this Messenger part, so I did it at a later stage with a random hotel… but the process is the same, no matter the hotel).
So here’s the whole conversation divided in 3 parts:
Part 3, which is the interesting one, is the Free Retargeting message, within the 24-hour window I mentioned earlier, starting from the moment the conversation began.
Notice, in fact, the dates and times:
Lead Generation: You Can, too.
Well done, Snaptravel!
Don’t get me wrong, I’m always in favour of direct bookings, direct revenue, direct guests.
In fact, this is something you should do, too: lead generation.
Before claiming for macro conversions, represented by online bookings, we must not forget the evolution from Lead to Prospect to Customer.
Especially with the leisure target, running marketing campaigns whose objective (or micro conversion), is generating leads, is by far the best marketing approach you can jump onto.
Many people think that generating leads is more expensive, as you might end up paying for marketing campaigns to acquire leads that do not turn into bookers later on.
This though is part of the game as, at the same time, many more of those leads will do convert into customers.
Ultimately, rather than higher costs (including cost of distribution), you’ll end up getting more direct bookings, better revenue, higher occupancy rate, happier clients. That’s what an effective direct booking strategy is about.
If you don’t do it, your distribution partners will, on your behalf: Snaptravel docet.
All the distribution systems we have are our weapons to deliver our properties, our rooms, our services, our quality and are an intrinsic part of any good Hotel Marketing Strategies.
However these weapons, if not controlled, may turn against us, impacting our channel mix, revenue and online bookings’ health.
Neither hotel booking engines nor websites can’t do much to prevent disruptive situations like the ones we’ve seen today, as none of them can control what dozens of other booking sites do, to provide leads and prospects with a better booking experience, which is ultimately part of the Guest Experience.