Six professionals reviewed the new consumer practices that once gave rise to rivalry between the sector's key players. On this occasion, hoteliers and OTAs discussed the need to collaborate, experiment and innovate in order to create their own market place.
Where are we today in this great battle for market shares?
Paul Mulcahy, Mövenpick: "Booking and Expedia account for about two thirds of our OTA bookings worldwide, and in the USA the figure is probably 90%. There is clearly market dominance in terms of online bookings. That said, the 90% in the United States represents only 22% of total bookings in the United States. There is still a lot to do and I think we need to move away from this direct versus indirect distribution dispute. It is important to return to per channel profit to make forecasts because there is undoubtedly business to do be done with OTAs when the time is right.”
A quick word from OTAs?
Peter Verhoeven, Bookingcom: "Booking and Expedia are important actors, but as Paul [Mulcahy] said, a good share of bookings are done through very different channels. We're still optimistic. Much more can be done. Online penetration is gaining ground more quickly, mobile is still very important and many innovations are happening. The competition is here! Even if they say there are two major players, I can name three or four competitors who may not be very present today but who can be tomorrow.
Who are you thinking about?
P. Verhoeven, Bookingcom: "For example, the Chinese when they think hotel reservations, they think Ctrip and not Google. It's a completely different way of working. When you watch TripAdvisor, Trivago and Google Hotel Ads, they play differently. When we talk about competition, we talk much less about direct or indirect, but which players have access to a large consumer base and who can quickly diversify their offers?
From the operator's point of view, are there changes in market shares?
Alexandra Quesne, Best Western France: "We'll go back on what we said last year. Last year we talked about a battle, but it's not a battle anymore. Today, there is room for everyone. We can clearly see that Expedia is taking over certain market shares and that Booking offers other products that allow our hoteliers to reach other markets. Now, independent hoteliers or chain hoteliers have other ways to be in the battle through applications, chatbots, loyalty programs or by the way the brand is led and the different brands that are developed.
Christophe Michau, Expedia: "Indeed, we are not talking about a battle. I think the market is large enough for everyone to have their place. As an intermediary, we need the hoteliers. If we don't have a hotel, we don't do much. Our marketplace offers customers many things: not just the hotel, but planes, cars and activities. It all comes in one package. There is a certain demand and a certain clientele that will find it more difficult to pass through an operator that does not always offer the complete trip. A lot of the products we're developing now are going to be for both chains and independent hoteliers. How can we help direct traffic to the website of the independent hotelier, for example? There are more and more products because it is the customer who decides where he wants to book. Whether we like it or not, we try to build loyalty, but it's really important to be able to support cross-platform activity between all the players.
What does it add or take away? What's not working?
Paul Roll, Maison des Champs Elysées: "The hotel business is a product. I think that over the last ten years the hotel business has been happy to see a drop in the cost of distribution and a series of illusions that have changed the properties. What we learned from all this is that there are big operators coming in. Today, we can see that the product, the supply, is regaining its value and that the hotelier is looking at his battles, everyone is saying to themselves: in any case, I will give my supply to the one who will give me the best conditions and the best materialization rate. Apart from technological developments, we are seeing an awakening of all its incumbents who had lost a bit of control. They were called tour operators, clubs, brands or others. They have found patterns of loyalty, which are not loyalisations on the property, but rather on their brands. I think that we are at the beginning of an extremely moving and extremely interesting period in which the hotelier looks at all this with a smile saying: I cast wide and whoever will be the most sympathetic, the most economic and the most productive, will be my friend for the day."
Karim Soleilhavoup, Fédération Internationale des Logis: "On the other hand, there is still a battle for the value and margins of independent hotels and restaurants. Logis accounts for 42,000 rooms, and we sometimes forget it. It is a subject of collaboration because we know, for example, that between being listed as an independent hotelier versus a Logis hotelier, there is a different and far superior conversion. And thus that there is real collaboration between distributors and brands in the interests of hoteliers and their profitability."
How can you successfully personalize your offer?
K. Soleilhavoup, Fédération Internationale des Logis: "At Logis, the principle is that each guest is different and each hotel is also different. So this non-standardization has been in our DNA for 70 years. We do a lot of work to personalize and adapt the service. At our properties, it is not uncommon for a businesswoman or a businessman to stop and ask for a dish that is not à la carte. It is all the pleasure of the Logis hotel and restaurant to make this experience absolutely unique."
How to keep this promise of personalization that is becoming more and more important?
Paul Mulcahy, Mövenpick: "I think that as an industry we have been too caught up in the fight with OTAs. The magic happens at the property. The more we can recognize our customers, the more we will make them want to come back again and again. At Mövenpick, we launched a project to transform a commercial system. This means that all properties have the same technology. If you have the same configuration for the PMS, then you have a customer profile. If you have a customer profile, then you can do the appropriate CRM and set up an appropriate recognition. One thing that is easy to forget is the cultural aspect. It's one thing to have the system, but when you start providing information at the property, you have to make sure everyone is focused on the guest. This is a change because hotel professionals are often stationary in their jobs. I think it's fundamental to look at and review the whole organization and the services provide to us as we begin to give customers recognition."
C. Michau, Expedia: "The way we see personalization is with the use of our data. We obviously have Big Data that we transform into Smart Data. It's a question of knowing how to use it to deliver a relevant booking experience. The way we measure is really simple, and focuses on the click. Does what we provide work? Obviously, if there is a click, it means yes. If not, we will adapt, we will repeat and we will offer something different. It's really around this test that we can learn what we need to provide to the customer."
Why is F&B a missing continent in the world of OTA and digital distribution?
K. Soleilhavoup, Fédération Internationale des Logis: "At Logis, we have a conviction. It is that today, the customer does not come just to sleep in a hotel. He also comes for the stay and this stay necessarily includes the dining experience. We have a tradition of preparing food on site with local and seasonal products. This indispensable to us. We must not forget that Logis hoteliers-restaurants are first and foremost restaurateurs-hoteliers. Like all good investors, they invest in restaurants because it accounts for the majority of their turnover. Turnover by hotel customers, but also by local customers. That's probably the revolution we need to make in our industry. Clients are local first. Neighbours have a hard time getting through the door of our properties to enjoy the food and then recommend the property to people who would come to the area.
And the geolocation of services on Booking?
C. Michau, Expedia: "Upstream of bookings and thus stays, there is a huge interest on the behalf of guests to know what is happening at or around the hotel. We are developing this activity. We have many cities where we offer activities, but also bike rental in hotels. I think the dining part should not be underestimated. This is a large part of our offer, but we see more and more hotels loading up on packages. There are lots of hotels that have problems filling tables in the evening or at lunchtime, so they experiment with that. Can it draw in customers who otherwise might not have come to the restaurant for lunch or dinner? This offer brings in additional clientele, do I channel it or not? A lot of hotels have been added to the city of Madrid. We did a test and hoteliers were very happy to get a breakfast proposal."
How does it work with the customer during the reservation?
C. Michau, Expedia: "The customer can see what packages are available. Once he has made his reservation, we can alert them about options or things they can do through messaging. During the stay, we can understand what is the most appropriate. Thanks to data, we know when it can be interesting for what type of clientele."
How can messaging be used to optimize performance and generate bookings?
A. Quesne, Best Western France: "All the conversations we can have with the client: before, during and after the stay inform us. Recently, I was in a hotel, I arrived in my room and I was sent a text saying: do you want to have dinner at the restaurant tonight? So it comes down to what we just said, we can even promote our restaurant offer. PMS and data also help to understand the customer and his expectations. Technology allows us to get back to the basics of our business. Especially independent hoteliers are taken every day in various and varied functions. But hospitality remains one of the reasons why customers come. They want to sleep well and have a good experience."
Should we break taboos and work with digital actors?
P. Roll, Maison des Champs Elysées: "I want to come back to the previous point. I think hoteliers and restaurateurs are two different jobs. Today, it tends to be those concepts that nearly dissociate catering from accommodation that have succeeded. This combines with a French context in which difficulties recruiting and securing restaurant staff are becoming real issues. As far as the fellow hoteliers are concerned, it is obvious that any arrival of a new operator will be welcomed with open arms and a dose of skepticism. Overall, we found that the wider we cast our net, the better we fill our facilities."
P. Mulcahy, Mövenpick: "For me, this is a return to basics. I will be open to digital actors, but I also think that we must be ready for the next disrupters. So far, I think OTAs have brought some common sense and efficiency to an industry that was very decentralized. Maybe the next ones aren't about efficiency, but something completely different."
P. Verhoeven, Bookingcom: "As far as competition is concerned, there will be new arrivals - and competitors. We do not have five, ten or fifty year contracts with hotels. We must act every day. We have to innovate every day to access inventory. So we're very aware of that and I think that's what sometimes keeps us up at night. Every day, the hotelier would choose what he thinks is the right choice for optimizing his ROI. That's perfectly fair. It is up to us to innovate against it. Challenge taken. That's what we try to do every day."
C. Michau, Expedia: "We connect with all our hotel partners and consumers. We try to make the booking as easy and painless as possible so consumers can find what they are looking for. But it is also an experience that we deliver. Our work doesn't stop at booking! Often we offer customer service and that's why we have thousands of employees around the world who help consumers.
When do you apply this process?
C. Michau, Expedia: "We do it at any time during the stay. That's what guests want. If they have a problem on the spot and want to solve it with the hotel, that's fine. But sometimes they come to us and that's why one of the new products we've launched is called real-time feedback. As soon as you register, we send you a notification on your mobile phone that says: Did you like your check-in? How's your room? How is your location? It's something very easy and instantaneous where the hotelier can react as the guest responds."
P. Roll, Maison des Champs Elysées: "I think the most interesting operator on the market is Airbnb. Attacked in the cities, they are forced to seek new sources of income. By necessity, it will be a newcomer. They have a rather powerful tool, an approach, an image and a discourse that says: the hotel must be small and different, without really evoking the subject of brands. We feel an opening on a market that was not theirs and on which they need to find stability. Amazon will continue to expand interventions for Airbnb, but it is more than that. I think that’s the one that needs to be looked at more closely. We fought Airbnb and today, we see him almost as a potential partner. We have a real problem of conscience. But at the same time, business is business. We need to tidy up our principles, continue to grow our business and improve our profitability."
Should we be concerned about the use of voice in distribution?
P. Verhoeven, Bookingcom: "Will the role of the voice become important in reservations? Absolutely. If you use Siri now and say: Paris hotel. It will find you some reservations. Of course the voice will become more and more important. All technology players that have a huge customer base who are serious about innovation, have a culture built around it and are not pure-players of hospitality, can enter the industry. Amazon is definitely there. As much as Google and Airbnb. There are many technological players, but only those that are full of innovation will emerge and last. If you have a broad customer base, it helps. If your culture is innovative and you have enough experimentation in your culture, you have the ingredients to succeed.
C. Michau, Expedia: "It's not about worrying. It's about when to do it. We work a lot with Amazon and we are already experimenting. It's a new way to interact with technology that can affect the customer experience."
How can we optimize the return on investment?
A. Quesne, Best Western France: "It is complicated to answer this question in a general way since we have 300 independent hotels under Best Western. We really work case by case. When the teams visit hotels and the hotelier explains this problem to us, it depends on: does the hotel belong to an owner with a long-term perspective or are these owners who want to make cash more quickly? Depending this logic, we will orient the ROI and the way they distribute differently. We really listen to each hotelier. In order for our business to go ahead, we must be aware of everything that is happening. Listen to our market and continue to listen to our customers."
P. Mulcahy, Mövenpick: "It depends on the economic model. We are in the management field and our job is to maximize the owners' return. The day we don't, we won't have owners. That's why we keep coming back to implement the right systems to help anticipate and respond quickly to changes. Different types of companies have different turnaround times. For example, if you want MICE business, it can take six months."
K. Soleilhavoup, Fédération Internationale des Logis: "There is an important element to comment on: education, training, awareness-raising and support for hoteliers, especially independent hoteliers. I am quite struck to see that Macron legislation was passed in 2015 and that today, less than 20% of independent hoteliers post lower rates on their own website. This is the work we do every day with Logis consultants. Working very closely with independent hotel-restaurant owners who probably do not have the same culture of innovation and technology. It is up to us to accompany them in the interest of their daily income and margin."
P. Roll, Maison des Champs Elysées: "I think that during this unstable period there are two keys: the first is the product. Be in a position where someone comes knocking at your door rather than knocking at other doors. The second is to have eyes and ears that are attentive to what is happening around us and to be opportunistic. I think anyone who is not opportunistic today is in danger of starving to death."
Do you have a good practice to share with the audience to optimize your distribution?
P. Mulcahy, Mövenpick: "What I would advocate is total income. Like most things in life, it's easy to say, but it's hard to do because you have to have the right systems, the right revenue management in place, the right GM. For me, this is the fundamental goal we must seek to achieve."
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