The billion dollar problem.
By: Charlotte Gossage
Tags: Startup, Dubai, Travel, Hotels In Dubai, Uae

The billion dollar problem.

The shift needs to happen. OTA’s (online travel agents) are here to stay but hotels are in such a wonderfully powerful position to take back some control. They have been for a while now as OTA’s have battled against each other but with Google’s hotel stealth move and Airbnb’s recent Hotel Tonight buy out, it really is an opportune time but the question is will hotels change (what could seem from the commission cheques going out) their lacklustre ways and get proactive and put the guest first again.

OTAs are starting to care about the guest more, it’s the most frustrating thing to see because it’s pure complacency on the hotels part and the lack of interest in putting some serious effort with an inevitably impressive ROI, yep we are talking about direct bookings and direct relationships.

It’s become clear that many hotel owners and leadership teams are not aware of the impact OTA’s are having on hotels bottom line and profitability. This is a problem. An average 4-star hotel in Dubai could easily be giving half a million dollars to the big OTA’s this year. In 2016 16 billion dollars went from hotels Worldwide to OTA’s.

Rotana recently announced a direct distribution partnership with Airbnb, a little vague but it would seem predictable to play it safe and work with the apparently “new OTA, travel platform” at most likely a lower commission rate, not exactly innovative or creative. I hope I am wrong and something a little more exciting than this. If hotels in Dubai think that this is the start of lower commissions, they should think again. OTA’s want to reduce marketing spend so hotels you could end paying more. OTA’s have got themselves into a bit of trouble in Europe too don’t forget, which means a costly end to the year if they haven’t adhered to changes by September.

We see something about direct bookings pretty much every day on Linkedin and hospitality although behind when it comes to innovating is full of new tech, some say it’s now a crowded space but there is clearly room for improvement and as a fellow direct booking advocate pointed out to me recently, as startups we should always empathise with hoteliers being bombarded with game-changing tech but often not seeing the promised results.

Hotels have though kept the same approach with their brand websites and most are simply room booking portals. This is where BookedHappy is tapping into the guest journey and sees huge potential to keep guests for those crucial seconds and convert to direct bookers. City hotels are in insanely exciting positions, endless opportunities on their doorstep, this opportunity has been missed and brand website landing pages get the lookers but far fewer bookers because the enticing, unique, innovation, creative value adds just aren’t there.

This is the shift, a new approach. partnerships, hotels working with local businesses more to give guests real extra value and show off what’s on offer right at the beginning of the booking journey. Exposure, revenue, footfall potential. Dubai Mall is busy, oh yes no doubt but is everyone spending like they could be? Simple ideas are often ignored, I guess this is why I am writing this article late on a Saturday night as I plan another week of trying to empower hotels to give their guests more, such a strange situation to be in. Hotels should never come close to being commodities.