Over the past few weeks, the travel industry has been rocked by some high impact shock announcements.
First came the news that the Malvern Group, parent company to the LateRooms and Superbreaks brands, was going into administration.
Then came the demise of Amoma.com. While this is obviously sad news for the company’s employees, I suspect few hoteliers will mourn its passing – Amoma has proved a constant source of headaches over the years for those trying to ensure online rate parity.
And then this week we saw the collapse of Thomas Cook; the British travel agency founded in 1842 and original pioneer of the package holiday. News of Thomas Cook’s undoing has been looked on more sympathetically and it is a great shame to see one of the UK’s great travel institutions go under.
WHAT WERE THE CAUSES FOR COLLAPSE?
While Brexit may not have helped Thomas Cook, their troubles started long before – with the rise of the internet as a method for travel booking taking over from the traditional high street travel agent.
Similarly, Amoma and Malvern ran into issues because of stiff competition from the big OTAs and online price comparison sites.
All three cases feed into a larger story – a lack of innovation or ability to move with the times resulting in the consolidation of power into the hands of a few big travel brands.
LateRooms, for example, was hugely successful 10 years ago but over time struggled to find its position as the bigger OTA brands (booking.com in particular) outpaced them. Amoma’s business model of sell-cheap, low-commission just proved unviable with the rise of metasearch sites and price comparison becoming more commonly used when booking online.
Thomas Cook, sadly, struggled to adapt and compete in the fast-moving digital space while being burdened by the costs of real estate, physical assets and volatile market conditions.
WHAT DOES THIS MEAN FOR THE FUTURE OF TRAVEL BOOKING?
Change can bring new challenges.
While at first sight, hoteliers might see the end of Amoma as a positive, it could simply mean that the challenges of online rate parity have just moved into a new realm. Indeed, with Booking.com having launched their Booking.basic feature in the last year, we’re now seeing not-intended-for-public-sale wholesale rates appearing on the world’s largest OTA; that must be a cause for concern. The deep-rooted industry problem that allowed Amoma to undercut hotels’ own rates remains and the battle for parity and industry change, continues.
And with booking.com holding more of the cards, it is going to prove challenging for hoteliers to push back and defend their rates.
Meanwhile, Google has recently launched Google Trips, giving more prominence to Metasearch and their “Book on Google” features – so travellers could book a stay at a hotel without ever interacting directly with a hotel or travel agent. (Worth noting that “Book on Google” was largely done in conjunction with Amoma, but now features rates from Travelocity and Orbitz – it will be interesting to see if these sites fair better from this partnership).
It’s understandable why Booking.com and Google have made these developments – they are simply seeking to offer the best solution they can to their customers; although it does feel like this sometimes is at the expense of their partners, the hotels without whom they couldn’t operate.
AN OPTIMISTIC VIEW…
While it would be easy to be pessimistic and take the view that travel booking is ever-increasingly profiting booking.com, Google et al at the expense of the operator, at 80 DAYS we take a different view.
A sea of sameness means even greater opportunity for innovators to stand out from the crowd, and for hotels to truly engage with their customers through branding, content and targeted marketing campaigns.
We may not be able to beat the OTAs at their own game but we can make a real difference in helping travel businesses connect with their customers.
And at the end of the day, it’s a service industry and so customer service must sit at the heart of any success story.
If your travel business is looking to engage more with existing & potential customers, we’d love to chat!