OTAs vs. hoteliers in India: Working with the frienemy
Travel and hospitality industry can be attributed as one of the fastest growing businesses in the Indian economic ecosystem. With advancements in technology and digital media in the country, services providers are pouncing onto every opportunity in the market. But is there rivalry between Online Travel Agencies (OTAs) and hoteliers, or do they co-exist in harmony? Hospitality experts discussed the topic at Digital Market Asia’s debut Indian Digital Hospitality Awards and Conference 2015 in Delhi.
It may appear that OTAs are trying to eat into the market share of traditional hospitality and travel industry but several factors must be taken in to account when evaluating this ‘frienemy’ relationship between hoteliers and OTAs in India.
“Globally, OTA constitute almost 50 per cent of the hospitality industry, in India however, the share is between 10-15 per cent,” according to Dhiraj Trivedi, Director of Group Electronic Marketing at Park Hotels. Further, concerns related to handling big data in India are restricting the growth of OTAs, he added.
Nevertheless, Pankaj Ravish, Deputy General Manager-Tourism Portal at IRCTC pointed out a distinguishing attribute of OTAs that gives them an edge over hoteliers. “OTA can bundle services for each client whether hotel specific or city specific,” he said.
In this age of personalisation, big data can help OTAs to provide information to the consumer with options of hotels he likes or options in the city he is currently placed at, depending on his needs.
Moreover, unlike hotelier OTAs are accessible 24 hours and work as aggregators offering a huge variety of ancillary services to the consumers when he is planning is trip. They can provide information for services such as – pick up and drop, sight-seeing, spa services at the hotel, ticketing, etc, said Mr Ravish.
It must be acknowledged that the customer is consuming the services of the hotel at the end of the chain and the hotelier is the final supplier. Customer is accessing the OTA platform for the services of the hotel and OTA is transferring the brand of the hotel to the consumer.
As the Indian market is saturated with hoteliers, OTA serves as a platform which provides the consumer with all the offers on a single page, explained Mr Trivedi. “We are a facilitator and then give business to the provider,” reiterated Mr Ravish.
Also, OTAs are helping hotelier to gain conversation from Tier 2 and Tier 3 cities and with younger management and tech savvy hoteliers in the Indian marketing scenario, we can see the digital hospitality ecosystem transforming over the course of next few years.
Going forward, the main challenge for hoteliers will be getting direct traffic to its platform as most of it continues to be agency focussed. “Direct traffic costs less as content comes directly from the hotel but OTAs offer better engagement through their aggressive social media strategies and access areas where traditional media does not reach,” said Mr Trivedi. But they committed to keep 30-35 per cent of traffic, which are repeat consumer as direct traffic, he summed.
