Threats to traditional OTAs?

With the advent of Alitrip in the Chinese lodging market; Amazon planning to come into the hotel booking space; the potential end-to-end travel experience Google is capable of offering; or TripAdvisor’s Instant Booking feature, the future of the travel industry could be driven by these retail and tech giants and not necessarily the traditional OTAs like Expedia, etc.

More competition means better pricing. But in the longer term, if these retail and tech giants are transacting room inventory at a magnitude larger than traditional OTAs and on their terms, the bargaining leverage of brands, and worse, independent hotels, will be even less than in the OTA world we now live. These giants need consumer engagement and hotel inventory. They already have the first part, and it may be only a matter of time before they can get the second.

Hotels may have to work with these giants to collaborate so they don’t become expensive discount channels. If the industry doesn’t engage them, they’ll find rates and inventory from other places – like Expedia – and become just another source for room nights.

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