The likes of Expedia and Booking.com can now command commission rates of 30% per booking, so it’s no surprise that hotels are seeking to ease their reliance on OTAs.
On the outskirts of this battle, technology firms are flourishing. While the hotels test new loyalty schemes to drive direct bookings, they are also turning to tech start-ups such as OTA Insight to help them gain a clearer picture of how their prices are displayed across the internet, to fine-tune their distribution strategies.
Knowledge is power
OTA Insight is a B2B intelligence platform that offers properties rate parity and online visibility tools. It was founded in Ghent, Belgium, in 2012 by Gino Engels, Matthias Geeroms and Adriaan Coppens. Coppens was previously a developer creating tools for stockbrokers to help them visualise market data.
Engels and Coppens joined forces during a hackathon, where the prize was a holiday to Hawaii. Unfortunately, their product – which aggregated data from TripAdvisor and OTAs – did not win, but it did spur on the solution’s development and led to the creation of the company. With Coppens’ background, Engels, who is chief commercial officer, claims the company is unique: “We started in data analytics and visualisation, not hotel pricing, and were the first to look at [hotel pricing] from an outsider’s view,” he says.
Engels and Coppens joined forces during a hackathon, where the prize was a holiday to Hawaii. Unfortunately, their product – which aggregated data from TripAdvisor and OTAs – did not win, but it did spur on the solution’s development and led to the creation of the company.
However, Engels recalls the difficulty of being such an outsider in the close-knit hospitality sector: “In 2012, we contacted InterContinental Hotels Group. They said: ‘Who the hell are you guys?’ In 2013 we then brought the product to market.” It proved a success, as eventually IHG began working with OTA Insight in 2014 after the likes of Citizen M, Carlson Rezidor Hotel Group, Hilton and Marriott signed up. Today, OTA Insight is used by 16,000 properties globally. Its latest signing, just weeks ago, was with Best Western Hotels & Resorts, which will use the platform across its brands, including Vib and GLo. It is aiming for 20,000 hotels by the end of this year.
The bigger picture
With tourism becoming increasingly unpredictable, Engels says the technology is useful for hotels – and cities – in the wake of major events. For example, by providing historical pricing data for a city that has suffered a terrorist attack, or geopolitical event, it can help hotels adjust prices to stimulate demand, based on previous recovery patterns.
Meanwhile, the hospitality sector continues to morph. Partly in response to the rise of Airbnb, merger and acquisition activity has grown as hotel chains wrangle with new ideas to claw back bookings. Accor, for example, has been buying companies, including onefinestay – and only last month integrated its other homestay brands Travel Keys and Squarebreak into the brand.
Engels says: “Accor wants to try things. It has that mindset, to see what works. It knows that not everything’s going to work [but] it’s on the front foot, trying to adapt to change.” Meanwhile, Google’s new Hotel Ads platform is “ramping up the costs of pay per click”, says Engels, who adds that OTA Insight simply helps hotels understand where audiences are coming from.
“Many hotels are on the back foot – they don’t know how to invest. They need to know which channels drive bookings and on what days of the week.” Winners and losers In response to these changes, OTA Insight recently released another tool called Revenue Insight that can now “show hotels if they are winning or losing business”.
Hotels can analyse revenue and online channel shifts in real time. For example, they will receive automatic alerts if there is a decrease in room nights coupled with insight into the reasons behind the shift, such as a lost corporate contract or major changes in OTA rankings.
“Many hotels are on the back foot – they don’t know how to invest. They need to know which channels drive bookings and on what days of the week.”
The launch comes as the company looks to expand further in US. It already has a support team in Dallas, but last year opened a sales office in New York. This expansion follows the opening of a new office on London’s South Bank, where 20 staff reside – alongside 30 developers in the founding trio’s hometown of Ghent.
Expedia and Booking.com continue to dominate the industry, but in fact their presence spurs innovation, including start-ups such as OTA Insight. OTAs may have the balance of power, but the next start-up that truly levels the playing field will find themselves winning much more than a holiday to Hawaii.