WTM London continues to be a crowd-puller and a great networking platform and this year is no different for us. During the four days of the event hundreds of hoteliers, travel technology professionals from all around the world gathered at eRevMax stand TT550 to witness the launch of LIVE OS and I personally got chance to interact with them to discuss more about recent trends in the hospitality industry.
Here I find these are top three trends which are influencing the global travel industry at this moment.
Online Travel Leads the Way
Online travel channels (OTAs) continue to outpace other distribution channels, and the two giants Priceline and Expedia dominating the show by no small margin. According to a PhoCusWright estimate, close to 50% of the total OTA bookings are controlled by them. For Europe, the figure is even more skewed, with the duo controlling over 70% of the market. With smartphones and tablets in nearly every consumer’s hands today, bookings from this channel is growing faster than any other channel, and currently accounts for 12.5% of overall bookings. By 2017, Euromonitor predicts that more than 30% of online travel bookings by value will be made on mobile devices. The emergence of mobile as a serious channel has also forced the hospitality industry to focus on a seamless experience for travellers as they switch devices on the road to purchase. The OTAs have been frontrunner, and with big hotel chains also joining in, it’s only a matter of time before the personalized marketing strategy becomes the norm for the hospitality industry.
Smart Travel is the new regular
As the travellers’ personal preferences are changing constantly hoteliers are also incorporating new technologies to transform the travel experience of their guests. Hotels are now investing on the big data analytics to identify future trends and changing preferences of customers. Analytics also provide a better sense of direction for the hotels to segment guests according to booking trends, behavior and other factors in order to reveal their likelihood to respond to promotions and emerging travel trends.
The understanding guest preferences, purchase behavior like frequency, length of stay, booking channel and profit potential are critical for hotels to increase the brand loyalty and upsell opportunity of their most valuable guests. Global hotel chains are already experimenting with personalized pricing based on customers’ online activity, preferences and predictive analytics. One of the challenges hotels face today is the dependence of multiple systems which produce own reports. A single platform, offering integrations of all technology solutions, and actionable intelligence based on data is the future.
CPC to CPA
Hospitality industry is constantly evolving - this year we’ve seen big players have changed their business models. Now the travel giants are shifting from CPC (Cost per click) to CPA (Cost per action) model and this is welcomed by the hotel industry due to its cost effectiveness. Recently, TripAdvisor announced Instant Booking feature – now consumers can book their accommodations right from the TripAdvisor site without leaving the booking window. Google has also followed in the same footsteps of TripAdvisor, killing its metasearch site Google Hotel finder. Earlier last month, the search engine giant launched Google Hotel Ads Commission Program allowing hoteliers to take full control starting from a guest’s search process to the completed booking contrary to the OTAs. As in this new meta-OTA model, hotels only have to pay to Google after a successful booking this will help hoteliers to increase their revenue and lessen dependence on online travel agents.
Global Travel is Booming
Though the economic condition across the globe is uncertain due to rising geopolitical unrest, a potential US interest rate rise, oil price volatility and the Eurozone crisis, growth of travel industry were remain the same. In 2014 international tourist arrivals was 1.1 billion up by 4.3% and by the end of this year the figure will be slightly down. Despite recent economic slowdown travel expenditure is rising, with the Asia Pacific region predicted to see the fastest growth in inbound expenditure over the next five years.
The global hospitality industry has become more competitive in last five years. Organizations which are responding quickly to the technology led opportunities are creating new revenue streams and driving higher profits than ever before.
Image Credit: WTM Trends Report
**With inputs from PhoChusWright & Euro Monitor International
Claudia De Leo is the Sales & Marketing Manager at eRevMax. She can be reached at email@example.com