Online Travel Agencies and Suppliers: the Seemingly Eternal Battle
By Blake Suggs Account Director & Integration Specialist, Range Online Media | January 27, 2012
No one would dispute that OTA's and Hotel Suppliers are irrevocably tied together, but over the years the love-hate relationship has gone through several evolutions, each of which has borne out a valuable lesson. Obviously the ultimate goal for a supplier would be to have every booking come through its .com. This hasn't happened, and it most likely won't ever happen. The primary reason? Today's travel buyers like to shop and see what's out there. With the economy as it is, more than ever, the ones that are making travel plans are taking every step necessary to shop for a rate that will allow them to stretch their dollar as far as they can. When there are fewer travelers, which is happening now, the tension escalates even more because the Online Travel Agency and the Hotel Supplier are fighting even harder for that dollar. Which goes along with the next point, travel is a large investment, and large investments necessitate research. According to YPartnerships, in 2000, 35 percent of travelers were already using the Internet for research, while today 66 percent do.
If you asked an OTA about what they do, they would tell you they're an online travel company that addresses customers' needs in every area of the buying cycle. They typically take ownership for setting the pace for Internet bookings, rich inventory content and innovative online services for travelers.
If you asked a supplier what an OTA is to them, their reply would probably be something very simple like, "They're a distribution partner that provides another channel for selling our rooms." It's a story of competing views, which are starting to merge … slowly but surely.
To understand the phases of the relationship between the Online Travel Agency and the Supplier, you have to understand the history. Yes these phases are generalized, but bear with me.
2001-2002: OTAs – who are these guys? The meteoric rise of the OTA was a surprise to most people, or at least to those who didn't work for one of them. They filled an immediate need by centralizing the entire travel buying experience. While working hard to become the travel agents of the future, they were also slowly killing off traditional travel agencies.
2003-2004: OTAs are awesome! Inventory providers – airlines, hotels etc – hit a bit of a stride with the OTAs during this time. They were growing their overall bottom line through distribution, but almost immediately the market became very crowded. The limited opportunities for distribution partners to control their own destiny through strategies like premium placement and off-site linking weighed heavily in the shift to the next phase.