Hotelbeds Executive Chairman Talks the Fallout of the Online Booking Battleground
Do hotels really need to be branded if online travel agencies are the most effective at selling rooms? Joan Vila of Hotelbeds thinks hotel chains could be forced to cut back on some brands that aren’t succeeding in the market.
Andrew Sheivachman, Skift
Most of the attention in online booking goes to the trials and tribulations of the major global hotel chains as they battle against each other and online booking sites.
But according to Hotelbeds executive chairman Joan Vila, the movement of hotel companies into adjacent verticals shows that consolidation and competition have slowed the growth of the hotel industry.
Speaking at the Skift Forum Europe in Berlin, Vila said wholesalers have growing relevance in a space where the long tail of hotels want to sell their products online without paying a brand to access their marketing and distribution networks. .
As growth slows, established hotel brands are turning to new lines of business.
“We have had many years of phenomenal growth,” Vila said. “But if you see the last [financial reports from travel companies], the growth decreases. All shareholders and companies are used to a very high growth rate, that’s what they expect. That’s why companies are rushing into new verticals like crazy. Who would think Airbnb would move into hotels, or hotels into private accommodations, or hotels into experiences, or airlines into alternative accommodations? Everyone wants to sell everything because it’s a source of additional growth.
Hotelbeds recently made headlines after it was sold by TUI to a private equity group and then sold its destination services division back to TUI for $136 million.
In the broader hospitality market, Vila sees a price race that devalues premium hotel brands for hotel owners and operators. Since price and convenience are the most important factors for consumers, online travel agencies may have an edge in the future.
“Loyalty programs are about discounts, price benefits, and moving to mobile has given OTAs a bigger advantage because for customers it’s a more valuable experience than going to a hotel brand,” said Villa. “We will see a battle because they are fighting over the end customer. the [hotel franchisees] doesn’t really need a hotel brand. Top ten groups only generate 30% of revenue [of the hotel industry].”
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