An exclusive Hotelemarketer.com interview with Michal Wrobel, one of the co-founders of Treovi, a recently launched hotel distribution initiative that is causing industry buzz with a unique value proposition for hoteliers…an end to OTA commissions!
[JJ] Treovi has been actively driving buzz in the industry with its promise to eliminate OTA booking fees…can you tell us a little more about your project and what hoteliers and consumers can expect?
[Michal] At Treovi, we believe a disruption was needed in the hotel reservation industry. I think the first question we have to ask ourselves, is: what is the main driver of OTAs? It is the commission system, which is related to a business model that has absolutely nothing to do with web 2.0 and Internet today. OTAs simply used the system that applied to physical travel agents and put it online. Similar happened for classified ads. Now, users can place their ads online for free… same change should have happened in hospitality online. It didn’t. In fact, it even got worse, the position of OTAs is now more and more controversial regarding the tools they use to drive bookings. We can’t really blame them, this is business, although some of the methods they use made hoteliers feel as being hostages of a system they are fed up with. Currently, online products and services available to the travel industry are deliberately reinforcing the old commissions system. We believe it has to change, and one simply can’t do it without disrupting the whole business model. This is what Treovi is about. Hoteliers are able to sell their room nights for free. Forever. We provide them with a fantastic “extranet” interface – we call it hotelier admin panel. We also provide something called “Treovi Hotel Profile” to which a hotel can setup a custom URL in the form treovi.com/hotelname (where hotelname is the chosen by the hotelier), and on which you can book directly a room, without using our search feature. Consumers can expect great interfaces, social media integration, and a lot of surprises. I will come back to that later. Upcoming soon are the mobile app and optional products and services, based on a freemium model.
Here’s another great guest post by the team at Mirai Espana, this time by Pablo Delgado and César López. This post examines how 3rd Party Retailers / OTAs capture business intended directly for hotels…and how to approach / fix the problem. Also evaluated is the value OTAs CAN add, i.e. via generic and destination level searches.
How Online Travel Agencies (OTA) or 3rd Party intermediaries get the customers that are searching for you on the web
PART 1: The problem
In Continental Europe, hotels with registered trademarks can prevent intermediaries from using their brand names in Google Adwords. Doing this means that more users end up on their own websites. In spite of the advantages, most independent hotels don’t take the necessary steps to benefit from it.
Did you think you were first in line? Others are cutting in front of you.
Your 1st place is barely visible
Here’s a cheeky look at what’s wrong with so many hotel websites out there…most of these issues are elementary and fixable…all that’s required is some forethought and keeping users top-of-mind.
Click here to open the infographic in full size (to download, right-click on the link and use Save As)
Leave a comment and let us know what you think about these pet peeves…and share your own!
A great guest post by Piotr Majdan from Mirai Espana, that takes a deeper look at the performance of TripAdvisor PPC (not to be confused with Business LIstings) activity. Piotr had also published a case study on the ROI of TripAdvisor Business Listings as while back. These conclusions were derived by Mirai after investing €27,000 with 58 hotels:
Your direct rates, your hotel’s website rates, can now appear on Tripadvisor dealing face to face with intermediaries such as booking.com and expedia.com. Should you join this program? What can you expect regarding the required investments and the return you will obtain? Does this return affect your hotel’s position within your city’s ranking? After a comprehensive three-month study, we have got answers.
Tripadvisor’s CPC (Cost per Click) program will generate new bookings in most of the hotels’ websites, mainly for the best rated hotels, but it is not predictable when it comes to cost and can generally be expensive “commission wise”.
In any case, “high” commission is a relative concept and should always be compared with the margin you get through intermediary sites (IDS) or classical tour operators . It still might be worth it for many hotels. Here is how we got to this conclusion.
In May 2010, Mirai pioneered the testing of the Tripadvisor Business Listing. Once again, we are the first ones to explore the new opportunity given by Tripadvisor – their CPC program. The difference between them is that the former is based on a fixed fee and the cost of the latter is variable depending on the traffic.
Other companies on the market offer this service (sometimes with a set-up fee or monthly fixed payment) directly to their clients promising new bookings. Before doing so, we at Mirai, have conducted a test to check the return you can expect by participating in this program. We invested €27,000 in 58 of our clients and analysed the results.
So what is the CPC program and how does it differ from Business Listing?
Business Listing allows you to add a link to your website, as well as the contact information (Blue).
A great TED talks video by Sheena Iyengar that talks about the perils of too much choice. To quote from the video blurb:
We all want customized experiences and products — but when faced with 700 options, consumers freeze up. With fascinating new research, Sheena Iyengar demonstrates how businesses (and others) can improve the experience of choosing.
We all know what happens when you’re faced with too much choice…if you’ve ever stood in the local hypermarket aisle, facing endless brands of washing powder, you’ll know exactly what I mean. We all love choice…but do we really need 25 varieties of washing powder? Humans are great at processing 6-7 pieces of information at a time and at eliminating the choices we know we DON’T want.
This recent article on Forbes has sparked a fair bit of interest and controversy – “How Target Figured Out A Teen Girl Was Pregnant Before Her Father Did“. Essentially the piece is about how Target uses clever data mining techniques to discover (and sometimes predict) user behaviour and circumstance (as evidenced by the aforementioned case where they were able to predict a pregnancy…and recommend suitable baby products to the customer).
Seth Godin followed this news (not sure if there was a connection) with a great blog post about “the illusion of privacy” which made a great point…despite all the hullabaloo about privacy (or lack thereof) these days, perhaps what we’re most concerned about are unexpected surprises. This makes a lot of sense…after all, we only want so much “privacy” in our lives. Wikipedia defines the term privacy as “the ability of an individual or group to seclude themselves or information about themselves and thereby reveal themselves selectively.” We constantly reveal details about ourselves selectively in the hopes of rewards (think loyalty programs, credit cards, shopping cards), access to free services (think Facebook…or even Google) or a personalized experience. So what we’re really afraid of are people or companies that appear to know things you didn’t selectively choose to share…or perhaps didn’t realize they had access to.