Major overhaul of hotel booking sector after CMA action

People booking hotels online can now do so with more confidence following a CMA (the UK’s Competition and Markets Authority) probe of the sector.

The Competition and Markets Authority (CMA) has secured changes from the majority of hotel booking sites operating in the UK. 25 firms*, including big brands like TripAdvisor, Airbnb and Google as well as major hotel chains, have now agreed to change how they display information where needed and have signed up to the CMA’s sector wide principles for complying with consumer protection law. These principles include not giving a false impression of a room’s popularity and always displaying the full cost of a room upfront.

Most have already made any necessary changes. Accor, IHG, Hilton, Marriott, Radisson Hotel Group, and Wyndham Hotels and Resorts requested more time as they will need to introduce specific technical updates so that UK customers are always shown the full cost of a room upfront when searching for hotels abroad. The CMA will now be closely monitoring to ensure that these firms make the required changes in a timely manner.

Today’s announcement comes after the CMA took enforcement action against 6 other companies – Expedia, Booking.com, Agoda, Hotels.com, ebookers and trivago – for serious concerns it had around issues like pressure selling, misleading discount claims and the effect that commission has on how hotels are ordered on sites. The CMA was concerned that some of these practices could mislead people, stop them finding the best deal and potentially break consumer protection law. All 6 firms formally committed to clean up their sites and have now made the agreed changes.

CMA CEO Andrea Coscelli said:

People booking hotels online can now do so with more confidence thanks to the CMA’s action. Major websites and big hotel chains have agreed to clean up their act if they’ve been using misleading sales tactics, and have signed up to sector-wide consumer law principles on how to display important information to customers.

The CMA will now be watching to make sure that these major brands, used by millions of people in the UK every year, stay true to their word. We will take action if we find evidence that firms are breaking consumer law.

If the CMA finds that any sites fail to make the appropriate changes or becomes concerned that people are being misled, it will not hesitate to take further action. 

As well as continuing to expect all booking sites and hotel chains to abide by its sector-wide principles, the CMA is pushing for compliance with consumer protection law in the travel and tourism sector globally. As part of this, it is co-leading an international project with other consumer enforcement agencies, which aims to tackle these issues on a global basis.

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That’s where your money goes

Expedia bookings up 11%

Expedia posted healthy revenue and earnings growth for Q2, 2019. Revenues for the quarter increased 9% to US$3.15 billion, beating analyst estimates. Expedia’s core travel agency business yielded the largest increase in gross bookings, rising 11% to US$23.3 billion. Gross bookings on vacation homes rental platform Vrbo only grew 2%, but revenue itself increased by 17% to US$347 million.

AccorHotels’ Chief Disruption Officer on “start-ups”

Interesting views of a major hotel company on start-ups through Thibault Viort, its Chief Disruption & Growth Officer. However, what I am beginning to notice that the much used word “start-up” most often means a scale-up. All start-ups have a proven record of profitability and benefit from the investor’s money or a large buyer’s infrastructure to grow even bigger. Stop using the word start-up when actually it is a scale-up!

AccorHotels is a world-leading travel & lifestyle group with over 4,500 hotels and resorts across 100 countries. The hospitality industry is rapidly evolving and is one of the sectors most impacted by the advent of digital pure-players. As digital innovation accelerates, AccorHotels seeks to be agile enough not only to anticipate future changes and customer needs, but also to be at their forefront.

 “BUSINESS ACCELERATORS”

The group’s recent acquisitions bring leading edge distribution channels (Gekko, VeryChic), new services (John PaulResDiary, Fastbooking/AvailproAdoria) and new spaces to stay, play & work (onefinestayNextdoor). These tech-based companies accelerate the “Augmented Hospitality” strategy of the group which is to extend relevance to guests and hoteliers by providing new products and services beyond the hotel stay.

Such acquisitions are business accelerators that allow us to gain time and be ahead of the curve by reinforcing our digital capabilities and personalization expertise, ultimately improving every dimension of the guest experience and hotelier services we provide. Through them we create frequent & highly personalized touchpoints and use data-driven insights to create value for guests and strengthen loyalty.

 KEY STRATEGIC ASSETS

On top of over 1800 talents, including leading entrepreneurs and sought-after sales & tech talents, we have acquired cutting-edge know-how in luxury private rentals, premium loyalty, upscale flash sales of unsold stock, business travel and web marketing. We have significantly expanded our customer and market footprint and now benefit from a multitude of state-of-the-art distribution channels and proprietary technologies, allowing us to provide a range of services through products that cover the full spectrum of hoteliers’ needs on the market in a unique way: from website design to direct online distribution and via OTA’s including traffic acquisition, metasearch and revenue management tools. These tools allow hoteliers (whether under the AccorHotels’ franchise or independent) to reach online travelers more efficiently and cost-effectively.

 BUY, INVEST, INNOVATE

We invest in start-ups which, having reached a level of critical level of maturity, could benefit from AccorHotels to catalyze their growth. We select them based on their capacity to grow into international leaders in their industry and to allow us to create and further develop new businesses and opportunities in the travel & hospitality sectors. We specifically focus on how new technologies and innovative strategies that can address the ever-changing needs and demands of guests and hotel owners: How can we create new touchpoints with our guests? What do our guests want? How can we surpass their expectations in the future? Why aren’t they booking with us? Why don’t they return to one of our hotels?

The Disruption & Growth team works hand in hand with each of the businesses to identify and facilitate opportunities within the group and make the right connections. Our goal is to ensure that they evolve autonomously both within and outside the AccorHotels ecosystem allowing them stay close to the outside business world too.

Last year we acquired VeryChic, an upscale flash sales platform with a client base of 7 million members in France. We are currently supporting them to develop rapidly in Europe. Their platform has been connected to the AccorHotels reservation system and to Availpro, a leading booking engine and channel manager that we also acquired a year ago. This has already increased business volumes for our hotels by 18M €. VeryChic recently launched “VeryChic Tonight”, an innovation which allows hoteliers to benefit from the traffic of the platform to distribute last minute stock and guests to obtain reduced rates on available rooms. VeryChic Tonight is one example of how the group can become a “business accelerator” for our newly acquired businesses and vice versa.

 “Through open innovation we partner with talented entrepreneurs positioned at the intersection of hospitality & technology. We bring leverageable businesses to AccorHotels and co-build with internal partners to maximize their growth. On top of creating new revenue sources we gain new expertise and are able to adapt quickly to new usages & new generations of customers.”

Booking Holdings acquires HotelsCombined

Booking Holdings has entered into an agreement to acquire hotel metasearch site, HotelsCombined. Based in Sydney, Australia with a strong presence in APAC and thousands of active affiliates worldwide, HotelsCombined will report into Booking Holdings’ leading travel metasearch brand, Kayak. Booking Holdings didn’t reveal the price tag.

A handful of analysts and industry players estimated it paid between about $250 million and $300 million. If true, that range would probably represent a very small amount above the company’s likely annualized revenue. HotelsCombined did not disclose revenue. But it did claim to have facilitated $2 billion in hotel accommodation sales globally in 2017.

Through its subsidiary Revato, HotelsCombined lets properties participate in its metasearch engine attracting direct bookings. This comes at a stiff 14% commission rate. With the new ownership of Booking Holdings hotels will face even more competition in the metasearch engines from Booking.com. So properties pay a premium in commission to be listed amongst the direct competition of OTA’s – which will surely see Booking.com’s results in the first slot. This and a core audience of price-sensitive shoppers may not be such a good deal for property owners to attract direct bookings.

Booking.com axes Rate Manager

Booking Holdings, formerly the Priceline Group, is not alone looking to expand its net into rental cars, flights, dining, tours and activities and more. Speaking at EyeforTravel Europe about the company’s latest Fareharbor acquisition, Todd Henrich, SVP Corporate Development, confirmed that the aim is “to create a hub where customers can come to get everything they need”.

Along with Expedia and Ctrip, Booking.com is one of three global heavyweights to dominate the hotel booking landscape. So, the shift in name from Priceline to Booking is, perhaps, a sign of the firm’s strategic direction – to focus sharply on controlling the booking across all travel verticals, rather than being diverted by helping hotels to price their rooms better.

This could also explain the firm’s decision to axe Rate Manager, one of the core products of BookingSuite, a set of revenue management and PMS tools which Priceline launched in 2015 to help hotels manage rates.

As a bit of background, when it launched in 2015, BookingSuite was viewed as a clever ploy to capture more revenue from small independent and boutique hotels. The idea was that the new division would build a hotel website free of charge, and cream off a 10% commission for any direct booking made through the new site. Then it seemed like a win-win situation. For hotels without deep pockets, it was better than having to fork out anything from 15-25% in the commissions  being charged for reservations made through the OTAs. Booking.com, on the other hand, faced with its biggest clients, the gorilla chains, going all out in the direct booking war, saw an opportunity to grow its business.

It wasn’t the only one to spot a hotel tech opportunity. In late 2016, Expedia launched Rev+, its own revenue management solution for hotels. At the time, Cyril Ranque, President of Lodging Partner Services at Expedia Group, told EyeforTravel that there was a shift in thinking “from being a pure distribution platform to a being partner and enabler for the travel consumer and the entire travel industry”.

Why now?

So, why axe Rate Manager now? Aside from the fact that, as BookingSuite’s note to partners earlier this year states, “we haven’t seen a sustainable level of demand in the market to encourage further investment,” could a continued focus on hotel tech, given its intensified focus to create a travel ‘hub’, as Henrich outlined, be viewed as non-core? After all, hotels are becoming ever better educated about how to drive direct bookings. And many (though still not enough!) are questioning the validity of handing over their data to powerful OTAs, just to have their pricing strategy controlled by somebody else!

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Meanwhile, Booking.com is facing growing pressure from bodies in like the UK Competition and Markets Authority and the European Commission. The CMA is currently investigating the OTAs pressure-selling retail tactics, while the Commission is looking into market abuses from the likes of Google. So, Booking.com is likely considering the risk of continuing to forge overly cozy relationships with hotel partners, which it might later be accused of favouring in search!

Rumours and opportunities  

The rumour mill of BookingSuite’s ‘imminent closure’ has been in full swing. In a press release announcing Van der Valk Hotels & Restaurants’ decision to implement the IDeaS revenue management system (RMS) to optimise and improve efficiency at 19 additional hotels, the group’s commercial manager, Christina Hobbel, is quoted saying: “BookingSuite’s pending withdrawal helped us focus on the need to invest in a more powerful analytics system.” After conducting an extensive market review, Hobbel believes the move bring “us closer to total revenue management and will take our demand forecasting and pricing decisions to much higher levels”.

So, while the closure of Rate Manager, which one hotelier described as one of the “only booking.com tool that was useful for hotels with limited resources, and for fair compensation,” may be a blow to BookingSuite’s existing partners, RM technology providers like iDeaS, Duetto or Rategain stand to gain.

In the meantime, as its letter to partner states, BookingSuite will continue “to focus on other existing solutions as well as developing new ones to best meet the needs of our partners”.

For how long, remains to seen. EyeforTravel contacted BookingSuite which has not, as yet, confirmed or denied its “imminent closure”. But as of July 31st,  its hotel rate manager will be no longer.

From: EyeforTravel

Traveler interest in home-sharing seems to be waning

For all the chatter of Airbnb stealing scene time away from hotels, traveler interest in home-sharing seems to be waning.

According to MMGY Global’s Portrait of American Travelers study, which surveyed nearly 3,000 US adults that have taken at least one trip over the past 12 months, just 33% of respondents are interested in sharing economy accommodations, down from 41% in 2017 and 37% in 2016.

Comparatively, 75% express interest in large branded hotels, while 66% are interested in suite-based properties and 61% want limited-service branded hotels.

Millennials are the age bracket most interested in home-sharing at 46%, followed by Generation X travelers at 31%, baby boomers at 22% and mature travelers at just 14%.

Some 20% of respondents say they used sharing economy accommodations at least once during the past 12 months, down from 22% in 2017, with 14% using Airbnb and 5% using VRBO or HomeAway.

Interestingly, though interest and usage are down, 27% of travelers still intend to book home shares in the future, up from 19% in 2017 and 18% in 2016. Millennials are the most likely to seek out alternative accommodations in the coming months (42%), followed by Gen Xers (22%).

According to the survey, the top three reasons travelers dislike home-sharing are because they don’t want to share vacation accommodations with strangers (71%), they prefer the locations of hotels (66%) and they don’t believe the quality of home shares matches that of hotels (50%).

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