Evolution of OTA vs Direct Marketshare

I ran across an article on Hotelmarketing.com by Neil Salerno that reminded me of a slide that I used in the recent OTA panel. The article was titled "Supplier direct hype: Who needs third-party travel aggregators?" - see link here.

"...it amazes me that there are still many hoteliers who reluctantly participate in third-party travel portals."

But that reluctance is due mainly to the fact that they are worried about the loss of control of their rate. Even if they don't work directly with travel portals, they put their rates to wholesalers who then resell to travel portals and any hope of rate parity goes out the door. Check Kayak.com and Sidestep.com and you see so many cases of OTAs selling cheaper than hotel direct. So they are worried that this would get worst.

That is understandable, but obviously, not engaging aggregators is not the solution. The hotels must tighten up their contracts with wholesalers and engage directly with the OTAs to cut out the wholesalers from selling to those guys. Not easy, but it is a start towards rate parity.

"I read another article which stated that supplier web sites are gaining more ground against third-party sites in overall market share; they state that like it’s a really big deal. Don’t these people realize that hotel supplier sites had nowhere to go but “up” in market share? They are now where they could and should have been several years ago; that’s nothing to celebrate. "

In M & C's case, we are still not there. We are only crossing the 50% mark for online between OTAs vs direct. Here is a repeat of the chart that I posted earlier:

(Click to see a higher resolution). Here is the original post.

So I do celebrate as we break 50% and start going to where the rest of the industry is heading. I celebrate because we are winning the war and clawing back marketshare that should be ours. There is a place for OTAs and there is a share that is fair. This "share" varies hotel to hotel depending on a hotel's brand, location, and infrastructure.

A few more of Neil's points:
- While the hotel industry was in Internet denial during the late 1990’s, third-party aggregators like Expedia, Travelocity, and the rest were already actively promoting travel on the Internet.
- Since the explosion of a new hotel Internet awareness in 2002, hotel suppliers have been playing catch-up on the Internet
- third-parties do what most hotel franchises cannot do; they aggregate or combine air, hotel, and car rental, and market them to all corners of the world.

Sounds good to me:


"Every hotel needs to be actively involved with all forms of electronic marketing to have a complete and balanced marketing effort... supplier sites and marketing efforts are improving, but that fact doesn’t lessen the need to work with all business sources, including third-party travel aggregators. Get business from as many sources as you can. "

Agreed, but the main issue at play is rate parity and revenue management. If a hotel is not actively using analytics to optimize its relationship with OTAs, then there is a higher risk in working with them.