NASHVILLE, Tennessee — The relationship between hoteliers and online travel agencies had been fraught for many years, but that has changed since the start of the COVID-19 pandemic.
During the “OTA Update: What’s Changed Since the Pandemic” session at the 14th annual Hotel Data Conference, hotel and OTA executives spoke about how their working relationship has improved, what’s different now and the ways new technology is improving the guest booking experience.
Evolving Relationship
Highgate Hotels has been partnering with OTAs for decades, even when it wasn’t a popular position to take, said Kerry Mack, vice president of revenue and distribution. Certain hotels in certain markets are reliant on leisure business that hotel companies may not be able to get on their own.
OTAs “can bring a level of demand to certain periods that you can’t really target on your own,” she said. “We’ve always leaned in for hotels where it makes sense in those time periods.”
Learning that lesson before helped Highgate’s hotels not just in the pandemic-related downturn but in previous downturns as well, she said.
During the pandemic, Expedia has looked at how the booking channel could be an extension of hotels, said Ariel Robinson, who leads the firm's key partnership strategy and operations for North America. Early on, it needed to ramp up its customer service since it was fielding hundreds of thousands of calls and doing a lot of work on behalf of its partners.
One such area of support was cancellation policies, she said. Where it had flexibility with its partners, Expedia created a voucher program that allowed its hotel partners to keep the reservations on the books and guests knew they could still travel at a later date.
The voucher program meant the hotels didn’t have to refund the cost of what would otherwise be canceled reservations, Mack said.
“It was very helpful in the time of when we didn’t know what was going to happen,” she said.
Looking at the landscape, not much has changed in the past decade, said Ethan Hawkes, senior manager of strategic partnerships, hotels and experiences at Hopper. Google still has the monopoly in the search space, Expedia did extremely well compared to other OTAs, and Airbnb was disruptive but existed mostly in an adjacent space.
His company has grown revenue 30 times since before the pandemic with about $4.5 billion in run rate value of the data being processed through its app, he said. That has attracted a lot of interest from hotel partners who want to collaborate.
The traditional OTA playbook has the majority of its traffic coming from Google, he said.
“You’re often paying for those keywords, and as a result, you’re very pressured as an OTA to convert in that session, on that transaction, before the customer goes off to the hotel website or other OTA,” he said.
All of Hopper’s downloads have come through organic social media, he said. People are using the app to watch flights six months in advance, allowing the company more time to engage with users. That has resulted in more people booking with Hopper in the second and third years after downloading than in the first year.
The company’s business-to-business arm, Hopper Cloud, makes up about 40% of its business, he said. It’s working with hotels and their direct channels as white label travel offerings to expand the entire customer journey.
“We’re thinking about how do we grow the pie instead of slicing and dicing in different ways,” he said.
Better Booking Experiences
Travel is about the experiences, and guests are looking to book hotels that match the trip they want, Robinson said. If that happens to be a luxury trip, they’re willing to trade up knowing they’ll get a better guest experience upon arrival.
The previous core algorithm focused on price and availability, but going forward, Expedia is adding a guest experience factor that will look at pre-stay, post-stay, refunds, relocations and other signals.
That data is available to Expedia’s partners to give them an idea of their placement and how to improve in those areas, she said. It will also make those guest experience scores guest-facing to create transparency. The company plans to extend that to its other lines of business later this year into next year.
One thing Expedia offers through its hotel booking process is smart shopping with attribute-based pricing and selling, Robinson said. The OTA now clusters room types and allows customers to add options to their reservations, such as paying more to make their booking refundable or to add breakfast.
“We’re seeing a lot of engagement with some of the predictions that we’re putting in there based on booking patterns and a lot of trade up,” she said.
For booking flights, Expedia noticed a 94% engagement in seat selection after moving that option to earlier in the booking process.
“Just for our airline partners, they’re seeing a higher return on each ticket price just booking their seat selection earlier in the process,” she said.
Mack said hoteliers know anecdotally guests will make requests for upgrades and other perks pre-arrival or when checking in.
“People do want more, but they’re just not going to scroll through 30 options,” she said. “It’s really just a matter of how you display it.”
Once OTAs, including Expedia, roll out new technology that works, hoteliers will start to replicate it, she said.
Many of HEI Hotels & Resorts' properties have too many room types to scroll through, Jeremy See, senior vice president of revenue management, said. Now it has options to better sort through all the offerings instead of just low to high pricing. The company wants to offer a balcony and ocean view or golf course view and have the website show the right picture to sell the room.
The company has had some success in upselling to guests by sending an email three days before their arrival about upgrading room types, he said.
“It’s a big piece of what we’re looking at, that auxiliary revenue,” he said.