September 01, 2015

Hotels fight back against OTAs, seeking direct bookings


With the online giants consolidating and potentially tightening their hold on travel bookings, major hotel chains are offering a host of benefits to lure travelers to book with them directly: digital check-in, free meals, Wi-Fi and even the ability to choose a specific room.

The financial stakes are high. Cutting out the intermediary not only saves on commissions, but also puts the hotel chains in direct communication with their guests. That translates to building customer profiles of preferences and spending habits to help attract guests on future trips.

Competing against online travel agencies on price alone is not easy. A traveler might assume that hotels could offer lower rates to guests who book directly. But generally they are barred from doing so, both by their contracts with the online booking sites and by government regulators that enforce price transparency for published rates.

“Many times there is a rate-parity clause, which is designed so they can’t undercut the online travel agencies, and vice versa,” said Naved Khan, senior vice president for Internet equity research at Cantor Fitzgerald. “So this fight is not really about pricing. It’s about sweetening the pot with other benefits.”

Get the full story at The New York Times