Post on 24-Aug-2020
Big Data + big disruption Andrew Sangster
Editorial Director and owner, Hotel Analyst Group
Agenda
• Defining big data
• Demand management
• Where rooms are sold
• OTAs (and other channels) are the
retailers, hotels the product
• Viability of booking direct
• Conclusion
To define…..
Big Data:
• The processing of unstructured data
• It moves beyond relational databases
But in reality it means:
• Lots of data
• Can’t cope / process
• Not doing anything with it
Big Data is an accelerant on the flames of
the demand management fire
It matters in demand management
• Revenue management has seen the cheapest prices go
to the earliest and latest bookers – but why?
• Last minute bookers should pay more and
understanding behaviour better will help deliver it
• Cancellation policies give late bookers a free insurance
policy
• Total revenue (eg f&b, spa etc) is what matters
• Profit (GOPPAR) rather than RevPAR
Big Data will facilitate change in all the
above and then some
Big Data is having a big impact on all the
five stages of travel
• Dream
• Plan
• Book
• Experience
• Share
Who owns the guest at each stage
The big hotel chains are waking up and investing
The online journey has only just begun
Where do guests book
It’s still largely offline In the US:
Hotel website 19%
OTA 17%
Travel agent / GDS 9%
Direct to property 55% Source: Phocuswright
The online share in the US is 36% and in Europe it is only just behind
at 33%.
The OTA share in Europe is estimated at 20%
The focus to date has been on the
transient guest
• Corporate negotiated
• Group / conference
• Tour group
• Etc
Have yet to come online
in a meaningful way
OTAs are dominating in the online
transient guest segment
• The two biggest OTAs,
Priceline and Expedia,
spent US$4.2bn last year,
mostly online
• CSFB says OTAs make
US$6.00 per room booked,
hoteliers make US$2.80
OTAs are creating
demand far better than
hotels
Hotels are the product brands
OTAs (and other channels) are the retailer
The intermediaries have
the marketing reach and
the financial power.
In the long-run, how can
hotels win?
In the meantime, there
is substantial value to
be gleaned by keeping
as much direct booking
as possible
Book direct
Marriott has launched a
high profile campaign
But it drew fire including
from ASTA
Marriott has to balance
its book direct desire
with its need to keep
selling through other
channels
Change is coming in other channels
Examples
• Concur’s Triplink means
corporate guests can track
open booking
• BCD Travel’s deal with
GetGoing has created
RoomSource to offer 400k
plus rooms with corporate
and published rates
More and more is
coming online
It is ever harder to segment the market
And the big
unknown is what
will happen to the
direct to property
component
Peer to peer / sharing economy
• And Housetrip, Wimdu, 9Flats, Homeaway, Onefinestay,
Interhome….
• Barclays investment bank analysts reckon Airbnb is on course to be
as big as IHG in room nights sold within a couple of years
• Spain saw tourist arrivals grow 7.4% in summer 2014 but receipts at
traditional transient accommodation rising just 0.4%
• Airbnb charges 3% (guests pay 6% to 12% depending on length of
stay)
• Regulatory issues unlikely to halt the onslaught
Conclusion
The biggest challenge is
the future of hotel
brands – what are they
for?
Owners and operators
must pick the most
profitable route and
consider radical options
Thank you
www.hotelanalyst.co.uk
www.ha-dt.com
Look out for:
Prof Macy Marvel’s
“Hotel Distribution
Report”