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.
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.