OTAs Friend
or Foe?


The boom of online travel agencies (OTAs) is effectively changing the hotel-booking game for ever. Joost Vermeulen, regional manager Middle East and Africa for Booking.com, the winner of 2015’s World’s Leading Online Travel Agency Website by the World Travel Awards, unveils the secrets of this buzzing booking system


1. How can you assess the OTA activity in the Middle East?
At Booking.com, our goal is to help connect travelers from all of the world with their ideal stay in the most seamless and enjoyable way possible, and this holds true for the Middle East. Through our website and mobile apps, we enable people to discover and book their stays, empowering them to experience the rich cultures and history of the Middle East for themselves, thus driving valuable incremental international business for our accommodation partners in the area.
2. What is the cash value of this industry globally and in the Middle East specifically?
Global travel is currently estimated to be a trillion-dollar industry. With the continued growth the tourism industry has seen in recent years, especially in a destination like Dubai, it is likely that the Middle East will be an important region to watch in the years to come. It includes some important and markets that are full of potential for Booking.com.

3. What added value do OTAs bring versus regular hotel booking?
With more than 1.1 million properties, from five-star luxury resorts to homes, apartments and everything in between, an online booking platform such as
Booking.com offers consumers unparalleled choice in terms of selecting the place to stay. Not only are our website and mobile apps fully localised in 43 languages, but we also provide customers with numerous tools and filters so they can quickly find and book their perfect stay. If our customers ever have any questions or concerns, our customer service team is available 24/7 to support them, also in over 40 languages. This large choice and service is also backed up by our promise to price match: If our customers find a better deal for the same room online, we will refund the difference. For our accommodation partners, Booking.com is a highly efficient and cost-effective digital marketing platform, driving substantial volumes of incremental (international) business for them with a guaranteed ROI.

4. How can OTAs become a meaningful partner in the advancement of the industry?
We build great relationships with our accommodation partners all over the world, working closely with them on a local level via over 180 offices, to grow their businesses via our platform. As a digital marketing channel, we are both friend and valued business partner. Our role is to help the accommodation providers choosing to list with us to

remain relevant and to reach new customers in an increasingly mobile-dominated environment. Once a property signs up to work with us, we not only localize their information in 40+ languages, but we further optimize this content for all devices. Our marketing specialists are experts in identifying potential customers with the intent to travel and then bringing them to our platform to engage further and ultimately book. We also employ over a thousand engineers, developers, UX designers and data scientists to continuously optimize every aspect of Booking.com.

5. What challenges do you face?
The biggest challenge we face, and we truly look at this as an opportunity, is to keep up with the ever-evolving demands of our customers, both in terms of the types of stays and destinations that they are most interested in exploring, but also with how technology is shaping consumer expectations. From recent research that we have commissioned, 45 percent of travelers say that they plan to be more adventurous in their choice of destination in the coming year, and 47 percent would like to explore corners of the globe that none of their friends have been to. We are seeing evidence of a growing appetite to embrace undiscovered environments in an authentic way. To meet this demand, we are constantly bringing additional properties to our platform in new destinations. Consumers can now explore over 100,000 destinations, with 70 percent of those stays being something other than a traditional hotel, including everything from B&Bs, villas and apartments to more exotic options like tree houses, boats and even igloos. When it comes to technology, we are investing in and experimenting with the latest developments in artificial intelligence, machine learning and voice recognition technologies to find useful ways to empower travelers to express their own travel lifestyle.

6. What is the future of the industry?
Technology is fuelling a more demanding and impatient traveler, which is shaping the future of the industry. According to our research, 44 percent of travelers already expect to be able to plan their holiday in a few simple taps of their smartphone. Over half expect their use of travel apps to increase in 2017. Usage of smart, instant message technology that moulds to our preferences to solve every question and wish in real-time, will become second nature. Consumers want to be able to manage every aspect of their trips with a swipe of their finger. Our aim is to bridge this gap for our partners, investing in new developments like machine learning and

AI, so that they can continue to deliver the fabulous, in-person, human experiences that keep our customers coming back for more.


The battle continues

While hotels and OTAs are indispensable to each other, the relationship is a classic case of ‘can’t live with him/can't live without him’
In the last two decades, since the launch of Expedia, the exponential growth of OTAs has un-nerved the hotel industry. For hotels, they are giants, threatening to disturb the equilibrium they used to enjoy before the advent of the internet. With the continuous shift to online business, coupled with changing consumer behavior patterns, hotels are finding it difficult to cope up with the challenge not restricted to competition with the neighborhood properties any more. Far beyond that, they now have to capture and retain the attention of consumers who would spend an average of 20 to 29 days researching their trip before hitting the ‘Book’ button. Over half the population in the Middle East is between 18 and 34 years of age. They will visit over 17 websites, check reviews, exchange notes with friends and family before finalizing on where to stay. As the fight for a share of the pie heats up, with the availability of more inventory, hotels need to be visible at every touch point to capture the customer’s interest. On the other hand, OTAs invest a lot more than individual hotels. Two online travel giants, Expedia and Priceline, spend around USD 4 billion annually in Google search advertising. In the Middle East, about 38 percent of online bookings are made through OTAs. For hotels, OTAs can be a great opportunity to not only increase their visibility in the region, but also expand their market reach. With high internet penetration and increase use of smartphones, guests are more engaged in searching their travel planning online. Generally, the classic booking journey starts with OTAs i.e. guests visit online travel sites and book their preferred hotel. According to a Google survey, 52 percent of travelers will visit your hotel’s website after seeing you on an OTA. A three-year-long survey on the billboard effect by WIHP shows that over 20 percent of direct bookings occurred, after the guest found the hotel on an OTA.

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