Duff on Hospitality Law

As evidenced by the stories in this week’s Update, this past week was a relatively quiet week in online travel.  Not surprisingly, many of this past week’s headlines featured the recent report by Phocuswright suggesting that the online booking channel pendulum has once again swung back in the OTAs’ favor.   Enjoy.

• • How Do You Attract and Convert More Online Bookings?  Act Like a Retailer, Not a Hotelier.  A recent survey conducted by Travelport revealed that travelers, particularly younger travelers, want the same “simple, easy and supportive experience” they receive from every other online sector (other than travel).   So how do hoteliers address these issues?  Provide simplified and intuitive shopping experiences, easy support and transparency.  Other key takeaways from the 2000 consumer survey include (a) 59% of consumers report that getting exactly what they want is more important than price, (b) 84% of younger (18-41) consumers want human led customer support (so much for ChatGBT) and (c) 49% of consumers would pay more for travel to save on carbon emissions. 

• • TripAdvisor Releases Biennial Review Transparency Report.  TripAdvisor has released its biennial Review Transparency Report.  According to the Report, of the nearly 30 million reviews received by the online review platform, 4% of the reviews were determined to be fake or fraudulent in 2022.   TripAdvisor’s fraud detection process identified 72% of the fraudulent submissions before they were posted online.  TripAdvisor also reported that it removed more than 24,000 reviews as originating from paid review companies and imposed ranking penalties on more than 33,000 businesses for fraud.

• • OTAs Once Again Receive the Majority of Online Bookings.  According to a recent report by Phocuswright, OTAs are again enjoying the majority of online hotel bookings.  Prior to the pandemic (largely driven by hoteliers’ much-publicized direct booking efforts and robust loyalty programs and then favorable public perceptions during the pandemic), hoteliers were able to reduce their reliance on OTAs.  Now, during this post pandemic period, OTAs have taken back some of their lost share.  Prior to the pandemic, OTAs’ share had dropped as low as 49% of online gross bookings, but that number has now rebounded to 52%.  For reference, each percentage point can represent $1B in business (or $100M - $200M in commissions).  So why the shift?  Experts point to OTAs’ advantage in marketing (marketing investments have again ramped up post pandemic) and improving technology.  How a possible 2023 recession might again affect the two sides’ relative market share remains to be seen.