By Sean Finnan, Avvio Chairman
Hotels must embrace innovative technology to enhance their guest experience from start to finish if they are to win back direct bookings.
Nearly nine months after joining Avvio, I am convinced that effective technology holds the key to hotels’ success with too many hotel businesses presenting archaic poorly designed websites that are confusing, slow and make it difficult to book. This drives people to the OTAs which make the booking process quick and easy.
Cutting edge technology could assist hotel businesses in rebalancing the relationship with the online travel agents (OTAs) which have dominated online bookings in recent years. Hotels must focus on creating a seamless online guest experience if they want to win back more direct bookings from the OTAs.
This means creating dynamic responsive websites, booking engines and marketing campaigns that tailor their information and offering to each individual guest, responding to their interests or needs.
Thanks to increasingly sophisticated machine learning and artificial intelligence (AI), this is now possible as we can accurately track user behaviour and interests. Websites and booking systems should no longer be a blank slate but a proactive sales and marketing tool, directing the relevant information towards the appropriate audiences.
The OTAs have dominated the hotel booking market because they have built websites that make booking a quick and easy process. They curate and present the useful information and great deals to the potential customer when it is needed increasing the conversion rate and upselling many additional services.
Hotels must learn from this.
In Europe, Booking.com alone now accounts for 50% of all hotel bookings. While OTAs bring in huge amounts of business and extend many hotels’ marketing reach far beyond their in-house capacity, they also claim hefty commissions of up to 25%, stripping the hotels of most of their profits. Too many hotels have allowed themselves to become locked in the past leading to an unhealthy dependency on OTAs and urges them to take proactive steps to redress the balance.
We should, however, not demonise the OTAs as they do bring in a massive amount of business but equally, once commission is factored in, the profit margins for hotels can be reduced to almost zero but far too many hotels have not modernised. Admittedly technology has advanced at a rate many businesses have struggled to keep pace with but hotels cannot allow themselves to get lost in the past any longer.
The technology is here and it can help hotels thrive if used cleverly.
Finnan brings experience from several top positions including former UK chair at multinational IT and business process services company EDS, running the European outsourcing business at IBM and working as commercial CEO for the UK business of HP. He has long been involved with the influential member representative industry body Tech UK and is a former president of the organisation.