Hotels vs. OTAs: Which Way Does the Scale Tip in 2020

Online travel agencies such as Booking.com and AirBnB have transformed the way we view hospitality. The wholesale approach to booking a room has become so commonplace that if you ask any member of Generation Z (born in the late 1990s) how they go about booking a hotel room, they will probably answer with “Why not get an AirBnB instead?”.

To juxtapose online travel agencies with small or medium hotel chains and independent hospitality providers isn’t reductive. Yes, said brands are the primary business providers of OTAs, but it’s the fact that the youngest generation of consumers does not even view the two as separate entities shows how deeply OTAs have changed hospitality. In the mind of the new generation of guests online travel agencies are the hospitality industry.

The online marketplace for hospitality providers has greatly inflated over the last decade or so. The new breed of hospitality brands which emerged, focused on renting out individual apartment spaces and studios, flooding the market with cheap and unique accomodation experiences became a strong competitor in the hospitality industry.

Then COVID-19 hit. And this brand of hospitality came to a screeching halt. With fewer and fewer people willing to travel for any purpose whatsoever, the custodians of these establishments have been forced to sell off many of their properties as upkeep and mortgage payments would not allow them to continue.

This created a drought in OTA driven business, as the unique and quirky locations that drove guest prospects to these sites were slowly dropping off the radar. Furthermore once travel resumed, guests had a shift in priorities. They no longer looked for establishments with a zany and adventurous vibe, but instead demanded proof of safety the measures taken by hoteliers.

It’s for the first time in a while that guests seek out direct correspondence with the hotel, before booking, rather than just relying on the distributing site. Guests do research, read reviews, and are quick to back off if someone criticizes the hotel’s social distance practices.

Independent hoteliers and medium hotel chains have been brought back into the conversation of their services, and they’ve had the time to prepare for it. Most seasoned hoteliers have focused their attention to building up their own database by employing integrated hospitality software which allows them to optimize their operations, by tracking bookings, making data-driven predictions for the best room rates, preventing overbooking, and keeping track of auxiliary services.

If a guest wants to book a room with an independent hotel they now have the opportunity to do so, while using the same methods applied by OTAs. They book directly through the hotel’s booking engine, download the hotel’s self-service app, enter their info and pick up their key card from the check-in kiosk upon arrival.

All of these steps are familiar, yet none involve an outside distribution channel. But OTAs are not dead in the water, rather they’re catching their breath and adapting to this new hospitality environment. Online travel agencies are still the most effective marketing for hotels, although the way the service operates at the moment, many hoteliers are opting out.

If OTAs drive down room rates for the sake of generating any kind of income, independent providers will simply remove their services from the platforms that undermine their business model. OTAs will eventually adapt and change to fit this new model of hospitality but in the meantime hoteliers are in an unprecedented position to take home as many direct bookings as possible and establish themselves as brand names in their own right.

Yet this level of advancement would not have come into being if independent hospitality providers had not adapted to OTA practices. Some of the most notable hospitality changes are technological in nature.

Property management systems have become the backbone of any successful establishment. The hotel’s PMS is the main link between distribution and staff, as well as between staff and management. Integrated systems have allowed for software developed by different companies to come together so that hoteliers can have a comprehensive view of their database while not having to give up solutions and services that work for them in favour of different ones.

With such technology at its disposal it’s easy for small and medium hotel chains to list their services independently, while also focusing their attention on building a better and more personalized guest experience. This is the old school way of approaching hospitality, rendered through new means. Instead of having staff ask guests if they need anything prepared for their stay in advance, guests can simply type in their request in the self-service app, and it would be ready for them upon arrival.

The myriads of “picturesque apartments near the Senne” listed on AirB&B have traditionally relied entirely on the atmosphere of the location, with little to no actual hospitality past a note saying “ clean towels in guest bathroom”. The downfall of such establishments is the lack of human touch that traditional hospitality providers pride themselves on.

It is for this reason that guests choose to avoid non-traditional establishments during the pandemic. Regardless of how they word it, many of these establishments have only sprung up in existence in accordance to the growing demand for them. But just because someone owns a few apartments with favorable locations does not make them a qualified expert in hospitality. In many ways running a traditional hotel chain is infinitely more challenging than doing the same but with a dozen apartments.

Hoteliers have hospitality protocols and years of experience in the business, allowing them to effectively adapt to the current climate, providing guests with safe stays and experiences tailored to their wishes.

With many of these disruptors gone, or at least temporarily defunct, traditional hoteliers have been allowed the opportunity to perform their duties in the way they have always been intended: with the utmost care for the health and happiness of their guests.



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About Clock Software

Clock Software is a global provider of cloud-based property management systems (PMS), integrated online distribution, online & kiosk hotel self check-in solutions and mobile & in-room guest engagement systems with customers in more than 65 countries.