Post Covid 19 – Now is the Time To Review Your Retail Strategy!

Are OTA’s becoming even stronger post Covid-19?

Within today’s hotel online business mix, we all know that OTA’s are a key revenue driver. They successfully commoditized hotel rooms by price and category and many hotels are highly dependent on them with commissions up to 20%. Will this change when business is picking up again?

There is certainly the danger that hotels are being desperate for business, opting in for various discount programs and even undercutting their own rates helping OTA’s to become even stronger. However, we also see a shift away from OTA’s and believe it is now the right time to review your distribution and revenue management strategy to get finally a step ahead.

New travel technology provide new opportunities.

The hospitality sector is yet at another tipping point, where radical change can happen due to the dynamics of technology changes and open APIs making the connection of two different systems easier (2020 PMS Landscape, Skift Research). New cloud-based solutions in many different areas are gaining traction and momentum in the market.

For example new PMS, CRM or Channel Manager startups or a number of different “add on” technologies like upselling solutions, digital guestdirectories, online concierge services, review tools, etc. can become a strong support solution to improve the customer journey and strengthen the proprietary distribution channels of individual hotels.

A new generation of hoteliers want more.

In addition there is a generation change within the hospitality industry that will not accept legacy and not-user-friendly systems which require a high amount of training and/or are not intuitive. Whilst legacy systems are trying to re-invent themselves by reproducing their solutions to cloud based technology offerings, they have not been able to adapt to current consumer trends and adjust their systems accordingly. New technology providers are more agile and connect all systems via APIs, allowing for much more flexibility. Certainly this is good timing to re-evaluate your systems and make a fresh start, post Covid-19 (2020-How hotel technology can drive recovery, apaleo).

“Legacy vendors have for too long reaped the rewards without truly pushing the boundaries of what they could offer hoteliers. Now technology has passed them by, and they are playing catch-up” (2020 PMS Landscape, Skift Research).

Legacy systems are slow to adapt, but so are hotels.

Whilst legacy systems are slow to adapt, so are hotels. Many lack solutions for selling experiences online and there is typically a disconnect between the hotel website and booking experience. While on the website it’s more and more  about experiences, when it comes to booking an experience, websites revert back to a good old standard or deluxe room booking room experience. We believe this is a mistake and new solutions are being developed helping hotels to de-commoditize the booking process!

Hotel guests want more personalization!

Hotel guests are also calling for new solutions! They want to be able to book connecting rooms online, select their room features like garden view or high floor and do not want to be confused about inconsistent room types nobody understands. In particular younger generations do not get the complexity inherited from the hospitality distribution landscape and are more often challenging the status quo. Digital engagement and personalization are critical and important to improve perceived hotel stay quality overall. According to a study from Brandwatch with 8000 travelers, quality is one of the most important attributes for guests, for which they are willing to pay for. It goes without saying that without understanding customer expectations,  these are rather difficult to meet (2019, Brandwatch)

Feature based booking engines are on the rise.

Big hotel groups such as IHG and Marriott have understood the situation and announced that they are working on a feature-based booking solution trying to resolve this industry problem. Other big hospitality technology companies like Sabre Hospitality Solutions or RMS Company IDeaS also announced that they are looking into this way of selling and attribute-based pricing or personal online selling becomes a more prominent topic in the sector (2019, Phocuswire, Simone Puorto), (2019, IDeaS, Klaus Kohlmayer).

Be one step ahead of OTA’s and de-commodize your retail experience!

Besides consolidation and mergers of hotel chains and countries like France building their own OTA to increase negotiation power, reducing distribution costs and level the playing field, we believe it requires a lot more differentiation for hotels to gain more control of their own distribution. The World Hospitality Alliance provides not only individualised sales & marketing services, yet it also offers new technology solutions to break away from existing inventory and revenue management practices providing hotels with a novel solution to take control of their distribution! For example GauVendi’s vision is to empower hospitality providers to own and re-capture the customer retail journey by making own sales channels non comparable and proprietary to their offerings. We call it the GauVendi Purchase Experience Moment – Gaudium Venditio.

Reviewing your technology infrastructure and distribution strategy is an ongoing process. However, if you have not done this recently, now is the right time to explore all the new solutions that help you to prepare for a successfull future.

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