OTAs & TPIs are smarter than us hoteliers

This is from a wiwih.com posting (Login needed):

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I am going to quite frank in my opinion here (And forgive me for the over generalizations):

1) Yes, TPIs are smarter than us hoteliers in the online space. They are more dedicated, more focused, and "hungrier". They invest in technologies to scrape sites for content and rates; they understand SEM techniques and how to game the search engines. They are numeric and analytical....

2) Despite travel being the top ecommerce industry online, hotel companies are not very internet savvy. Most sales and marketing people in the hotel industry come from the offline media. When it comes to branding online, we are comfortable. But when the discussion turns to search engines, spiders, pageranks, ROAS, tags, analytics, etc, many people have a hard time pulling it all in.

3) The large hotel companies/brands have done it by centralizing eCommerce as a corporate function and have the understanding and the willingness to spend CAPEX to put together a good system. Medium and smaller hotel chains and independents in many cases do not have the human resources and do not want to spend the capital. But this is obviously changing as you noted that you expect the ratio to be at 75:25.

4) Large OTAs like Expedia and Travelocity will always have the upper hand because they offer consumers the choice across brands in any particular destination. And they do have brand equity which consumers are comfortable with. So there will always be a share to TPIs.

I would guess that the TPIs will always be trying to innovate faster than hotel companies and take advantage of new technologies in order to retain or increase their share. This is good for us hoteliers as we do not have to spend money on R and D.

However, to effectively increase its ratio of direct vs indirect, a hotel company must adapt faster than TPIs innovate.
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OTA = Online Travel Agents (the other OTA is here)
TPI = Third-Party Intermediaries

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