The only way hotels are going to stop losing out to online travel agents (OTAs) is by being smart, said the CEO of the Emaar Hospitality Group.
Olivier Harnisch made his comments during a panel discussion at Hotel News Middle East’s GM Leaders Conference, which took place at The W Dubai Al Habtoor City on 3 May.
“The only way we are going to beat the OTAs is not with money and resources as that would be a hopeless, hopeless endeavour,” he said.
“Just to put things into perspective the biggest hotel, Marriott has an annual online budget of 100 million, Priceline has 40 times as much and 20 times as many rooms, in terms of resources. We can’t beat them.”
The only way hotels can compete, according to Harnisch is to instill an attitude among guests, that direct booking through a hotel’s website is better.
He said the question remains, are the incentives there for guests to make direct bookings rather than using OTAs?
Booking needs to be more user friendly on a hotel’s website, an area where, Harnisch says, that OTAs currently have an advantage.
Richard Collins, general manager of Habtoor Grand Beach Resort and Spa, Autograph Collection Hotels said there is a clear necessity in the market for OTAs but they have created problems as well.
“There is a lack of creativity with OTAs. Sometimes revenue is having a look at Booking.com or Expedia and seeing that your next door neighbour has dropped by AED10, so therefore you must drop by AED10 too,” he said.
“It’s a wonderful opportunity to get first-hand customers into your company but one of the negatives is that it spreads a lack of creativity among hotel revenue directors.”
David Allan, general manager, Radisson Blu Hotels Dubai Waterfront and Dubai Canal Views, said that many hotels still hadn’t caught up with the OTAs and “we are still trying to push rates that aren’t necessarily of value to our customers”.
Rabih Feghali, director, business development, Roya International added: “We need to ask, ‘what is in it for owners?’
“Once you take out all the costs of a booking, including 20% to the OTAs, the owner is left with a slither of what they are entitled to.”
The GM Leaders Conference was presented by Rikan and supported by Platinum Sponsor, Du; Luxury Fleet Partner, Cadillac; Hotel of Choice, W Dubai Al Habtoor City; Associate Sponsor TSSC; Lunch Sponsor ResNet; Pulsar Foodstuff Trading and The Gourmet Olive Market, TCL, Lavazza-Eurocoffee, EP World, Electrolux, Assa Abloy and Isukoshi.