Why Hyatt Is Checking Out of Expedia. Will Other Hotels Follow Suit?steemCreated with Sketch.

in marketing •  3 years ago 

Recently, online travel agencies (OTAs) like Expedia have been increasing their market share and charging hotel partners increased booking fees. By July 31, Hyatt Hotels could be leaving the Expedia platform because of the fee increase.

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In a recent report from the New York Post, analyst Kevin Kopelman claimed that “over the past 18 months, the OTAs have increased their market share significantly.” He added that “Hoteliers like Hyatt pay fees of 15 percent to 20 percent of a room rate to OTAs like Expedia.”

If Hyatt goes through with the threat, its listings would be removed from not only Expedia.com but Orbitz, Hotels.com, Hotwire, and Travelocity.

The feud between OTAs and hotels isn’t new. It has been brewing for years. Priceline and Expedia’s value has been increasing in recent years due to travel reliance on technology-enabled booking. Hotels have also been feeling the pressure to increase booking rates and sales as vacation rentals become more popular among travelers.

According to a recent Bloomberg report, the American Hotel & Lodging Association (AHLA), an industry group whose members include Hyatt, as well as Marriott and Hilton, intends to lobby the Federal Trade Commission. Their campaign argues that online travel companies are becoming monopolistic, since Expedia and Priceline own a significant market share with rental sites like Booking.com, Kayak.com, Travelocity and more under their belt.

The problem is that many people rely on OTAs to find and book lodgings. Unless there is an incredible incentive, fewer people are going to go directly to a hotel or other accommodations website to book directly. This is why Hyatt and others are launching and developing their own loyalty programs, which offer lower room rates and perks for guests that book directly. They are also increasing their marketing efforts in hopes to increase the number of direct bookings.

Whether or not more hotels will leave Expedia is unknown. However, it does raise the question as to what property managers and owners can do to control more of the market share in their own business. Loyalty programs could be one tactic. It is even more critical to create one-of-a-kind guest experiences that distinguish your properties from the competition. It is also important not to rely on one specific OTA for listings.

BookingTeam.com takes a more holistic approach and shares rental listings to all the most popular sites while taking care of everything for the host and guests of the property.

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  ·  3 years ago (edited)

Here is a crazy idea why doesn't the Hotel pass that 15-20% saving on to the customer in the form of lower room price on their own website. This would not only take back market share but ensures they can out price hotels still paying the fees to the OTA 'monopolies'. Every time I check the hotels website and compare the rate with the OTA website it is still cheaper on the latter even with the surcharge fee included.

This travel sector including; airfare, lodging, and rental cars is extremely price sensitive and consumers flock to the lowest price like moths to flame. Until hotels ensure that they offer a lower price than a 3rd party re-seller they will continue to lose share.

Great idea. In fact, we have a similar option. On our site, guests can book direct and pay about 10% less than on the booking sites. It's a common practice and becoming more common each day. :)

Ya ofcourse. Great info. Shared thnx alot

It'll be interesting to see what the other hotels do! Hyatt has always been a great leader, but with these recent changes, who knows what will happen

What no one ever really addresses wholistically is how technology is changing everything: how we work, where we work, how we play (go on vacation), how we communicate, even how we learn (our brains are being rewired with the heavy reliance on technology). Of course technology is transforming how businesses operate. But the government is not going to be able to regulate us out of this technology revolution, nor should we want them to. It is up to us as individuals, communities, companies, societies to flow with the changes and figure it out day by day.

Decentralisation is the next huge thing :)

capitalism... Expedia should be careful though, there are a lot of alternatives. e.: youre homepage looks very inviting!

That means there's a opportunity for someone else! I respect Hyatt's decisions, they have to draw the line somewhere.

Thanks for sharing.

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Hyatt buying everything, smh.

Hotels should market their offers to join these new loyalty programs directly to potential customer's smartphones. And if the customer signs up via this method they should get a few extra rewards than from just signing up online. This type of relationship building would keep their customers off the OTA websites as long as the hotel has a facility in the town the customer is visiting and there are good rooms available.

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@bookingteam.com Smart move by Hyatt! I would do the same if I had to as a business enterprise. You always gotta do what's right for business. or you'll sink

  ·  3 years ago (edited)

They are greedy, they need to share the market and scale back. Hotel price on their website are ridiculous. They are essentially providing you with a BED and a SHOWER. How can they be asking for half of some people's monthly rent at $400 per night? This is coming from someone who has stayed at a lot of hotels. With comic con this week in San Diego, hotel prices have soared to extortionary amounts. It has cause me to move back my contract job until the following week when the events are over.

good post, nice thought

thanks for sharing

very nice post. Well writen..

nice post

I am not a big traveller myself but somehow I enjoy reading each oh your post, well done :)

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If expedia is not suitable for business then another player might take its place, As far Hyatt is concern, they can survive without expedia and more hotels might not follow them @bookingteam.com

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Thanks :)

Great piece of information, thank you!

can i call it as HAYAAT?

...good to know the waves of the future!

very nice post

Cool business post ..

that explain the difference on their prices....

with that amount of fee i think more hotels will pull out to that association....

instead of paying those travelbookin. why not invest on their marketing...

If the hotels pull out of Online Travel Agencies, demand in AIRBNB will skyrocket as they will be one of the only place where guest can compare price / location / amenities easily. Even if hyatt follows through, I doubt many of the other hotels will follow suit.

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thanks for sharing

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Thank you for lovely post ..... :) :)

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This is very amazing, is this also true in indonesia ...? I hear your answer @bookingteam

Breaking news- Hyatt signs up for Air BNB

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I hear rumours that a new site is on the way offering all vacation rental types including hotels, vacation apartments, houseboats, rooms, couches, bed and breakfasts and best of all NO COMMISSIONS AND NO FEES TO OWNERS OR VISITORS which will result in $100's saved on every single booking.

It's happened in almost every other market except the vacation rental market so we are overdue for a shake up.

The entire 1st page (10 entries plus 4 sponsored) of every accommodation search for any destination carried out on Google is controlled by just three companies.

thanks for the update.. good news for travelers..

Have a great weekend!

are you real bookingteam? :D

Expedia? It's all about TripAdvisor. Don't forget FunJetVacations from Milwaukee!

I have good experiences with Agoda, waht do you think about this website?

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