SaaS Travel Booking Industry – Hotels, Air BnB, and OTAs

SaaS Travel Booking Industry

The past few years has seen a fervent battle between Hotels, Air BnB, and Online Travel Agencies (OTAs) to become the dominant market force in accommodation bookings. Whilst Air BnB and OTAs have made a significant dent in hotel’s profit shares, they are starting to fight back in an attempt to encourage customers to book directly with them.

Their reliance on 3rd party booking systems, combined with the rise of Air BnB has created an increasingly ruthless market – hotel chains can no longer afford to pay sites like Priceline or Expedia a cut of their profits. OTA’s take a portion of the sale, usually around 10-20% depending on the site. The main issue the hotels face is that most travellers under the age of 35 prefer to use online search engines rather than booking directly, despite numerous campaigns that have been run by the hotels.

The Hilton, for example, ran a ‘Stop Clicking Around’ campaign that highlighted the ease of booking through the Hilton compared to shopping through comparison sites – it was widely considered to be the largest ad campaign in the 100 year history of the chain! Other firms are using loyalty programs to try to incentivize customers to book directly, offering 25% discounts to book directly, allowing customers to redeem points for amazon vouchers and offering free Wi-Fi or room upgrades.

Hotels have also decided to fight back by legally challenging the OTAs market monopoly. Bloomberg reported that the U.S. hotel industry have proposed to lobby the federal Government and Federal Trade Commission officials, on top of launching a marketing campaign highlighting “the Expedia and Priceline duopoly.” Yet despite their best efforts, hotels are losing this battle. In fact, OTAs like Flighthub (a Momentum Ventures company), have now surpassed direct bookings for the first time and their growth has shown few signs of stopping any time soon.

But the hotel industry is not just fighting against the rise of OTAs, the meteoric rise of Air BnB has had massive consequences for the hotel industry in general. There has been a swathe of lawsuits aimed at Air BnB over their unfair advantage in to being held to the same regulations that hotels have to adhere to, but nothing has really halted the onward march of the sharing economy. The American Hotel and Lodging Association (AHLA), a hotel industry trade group, has been increasing its lobbying efforts to try to get more regulation in place, but lawsuits and legislative processes like this can take years to come to fruition so hotels will need to find new ways to fight back.

With Air BnB adding Trips and Places, which allow you to book guided tours and meet other users, their market share and user appeal will likely continue to grow. Hotels are looking down the barrel of industry disruption that is sweeping every industry, unless they can adapt, they may never see their profits return.

By Josh Hamilton

Alex Vakulov
Ransomware Database Targeting The scourge of ransomware is undoubtedly the most severe cyber security concern for home users and organizations these days. It revolves around taking important data hostage and demanding money, usually hard-to-trace cryptocurrency ...
Rakesh Soni
Customer Experience: Living In A Connected World and Winning the IoT Race IoT and smart interconnected systems have already created an invisible aura of convenience, usability, and a rich user experience around us. However, when ...
Yuliya Melnik
DevOps Services Outsourcing The sooner you release your unique idea to the public, the higher the chance that it will receive the lion's share of the audience's attention. Delays in development can lead competitors to ...
David Loo
The Long-term Costs of Data Debt It’s no secret that many of today’s enterprises are experiencing an extreme state of data overload. With the rapid adoption of new technologies to accommodate pandemic-induced shifts like remote ...
Stacey Farrar
Document Migrations Require More Diligence Data creation has risen dramatically in recent years and shows no signs of slowing. According to analyst firm IDC, widespread remote work led to a spike of new data in ...
  • Plural Site

    Pluralsite

    Pluralsight provides online courses on popular programming languages and developer tools. Other courses cover fields such as IT security best practices, server infrastructure, and virtualization.

  • Isc2

    ISC2

    (ISC)² provides IT training, certifications, and exams that run online, on your premises, or in classrooms. Self-study resources are available. You can also train groups of 10 or more of your employees. If you want a job in cybersecurity, this is the route to take.

  • App Academy

    App Academy

    Immersive software engineering programs. No experience required. Pay $0 until you're hired. Join an online info session to learn more

  • Cybrary

    Cybrary

    CYBRARY Open source Cyber Security learning. Free for everyone, forever. The world's largest cyber security community. Cybrary provides free IT training and paid IT certificates. Courses for beginners, intermediates, and advanced users are available.