Hotels muscle up their online presence to counter aggregators’ onslaught

Driven by stronger online presence, loyalty programs and mediums like apps, to offer personalisation of service, hotels are going all-out to boost their sales through their own platform – giving a tough fight to growing numbers of online aggregators.

KUMAR SHUBHAM DIRECTOR OF SALES, COURTYARD BY MARRIOTT GURGAON
KUMAR SHUBHAM
DIRECTOR OF SALES, COURTYARD BY MARRIOTT GURGAON

The growth and penetration of online segment in India has been a phenomenal one, to say the least. Online aggregators have created a niche for themselves with varied offerings, attractive pricing and, most importantly, the comfort of comparing prices of various service providers at a single click of the mouse. What truly kicked-off in the mid 2000’s has grown to be a formidable force to reckon with.

And, despite the fact that hospitality has been the latest addition to the aggregators’ armoury, it has begun to change the dynamics of operations for brick-and-mortar players. A recent report commissioned by tech-giant Google testifies to this trend. “Consumer confidence to do online hotel bookings is on the rise in India, with an estimated 8.4 million Indians likely to book hotels online by 2016,” it reads. Given that the online hotel booking Industry will be worth USD 1.8 billion from the current valuation of somewhere around a billion USD, hotel operators are beginning to feel the heat.

Looking at it from the consumer’s perspective, there is a certain advantage that online aggregators offer. They display a wide-range of products which caters to every segment of traveller, allowing them to compare prices and choose the best deal for themselves. Then, a frequent traveller may or may not choose to stay in a particular hotel during his recurring visits, so the idea of downloading a number of hotel apps is a cumbersome one, too.

“People are able to compare. Online helps you get more information to make better decisions and do better planning for vacations,” Google India Industry Director Vikas Agnihotri had told PTI in a recent interaction, indicating how the ease of booking and confidence of choosing the most competitively priced product was fuelling this trend. The report also stresses the role of demographics, stating that users in the age group of 35-44 were the most tech-savvy when it came to booking hotels online.

Although, aggregators do help hotels in tapping into a larger pool of potential buyers, but the high commission levied by them – which can range from 15 to a whopping 30 percent – is squeezing profits for hotel operators, forcing them to take on the might of online players by strengthening their own presence in the online world. A number of branded groups have already put in place a vibrant website; some have even created dedicated apps to cater to their clientele. “As a group, we are always committed to meet the expectations of our customers. We have a robust online presence with a vibrant website and app that has very personalised service on offer,” said Kumar Shubham, Director of Sales, Courtyard by Marriott. “In fact, we have clocked an upward of 17-18 percent of the annual total rooms’ night revenue through our website, so it is an important aspect of attracting more business to us,” he added.

These apps are seeking to leverage through free upgrades, value-added packages, and doling out loyalty points. This behaviour is accentuated by the report published by e-travel marketing India which establishes that deals are an important motivation for customers to go online. According to their research 36% consumers make unplanned trips if offered a discount.

 Shubham, however, clarified that this trend had a profound impact on smaller brands and groups with lesser inventories than on hotels which had a large-scale presence and decent occupancy ratios. “If a brand has two hotels and 400 rooms, it is likely to feel the pinch of commissions than those who are running an inventory of say 3000 rooms,” he explained.

But instead of calling online aggregators competitors, Shubham viewed them as partners in increasing a hotel’s outreach. “Given that we generate an average of 7-8 percent of entire rooms’ night revenue, annually, from them; we see them as vital cog in our effort to enhance consumer experience and generate more business,” he reasoned. Noting that aggregators had more spending and marketing power than individual hotels, he said “their strength in terms of volumes and numbers is much higher. Their websites get lakhs of hits which is way more than any hotel’s.”

He further added that “our philosophy is based on building relations and as we are aware that aggregators are here to stay; they may even become bigger entities by joining hands, and therefore, may have a larger clout in the future. So, it is important to leverage those platforms.”

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