The hype around new online travel disruptors is so overblown

Skift grip

Old entrants like Google and hotel brands are likely to be much more disruptive to the future of online travel agencies than Chase, Uber and Travel + Leisure.

Denis Schaal

Travel online this week

“OTAs will still have a role to play.”

This sentence comes from a AllianceBernstein research note this week on “OTAS: In Flux”.

There is a lot of agreement with the research note. Online travel agencies are changing. As the note indicates, Expedia tries to make the most of the business-to-business component of its portfolio, and Airbnb refines how travelers search for properties, though hosts have complained about the clumsiness of Airbnb’s efforts.

But to say that online travel agencies will simply still have a role to play due to business shifts and the rise of new entrants is almost laughable. When I started writing about global delivery systems in 2000, I was repeatedly warned that their days were numbered. As with online travel agencies, global distribution systems are still around and are vital to the travel industry behind the scenes.

The major online travel agencies may lose share in the coming years, but they will continue to hold a strong position in the online travel market.

AllianceBernstein’s research note argued that investors in online travel agencies should be concerned about “new entrants”. In this context, he mentioned that the changes that Google done in organic search by providing free links to supplement paid links for advertisers in Google Travel “brought many new OTAs to market”.

The research note also cited potential breakthroughs by Hopper, Travel+Leisure, Hunt and Uber.

“Not all of these players are trying to tackle the full funnel, and OTAs will always have a role to play, but they risk having their funnel shortened,” reads the full sentence, including the excerpt we we quoted initially.

I agree that Hopper, with its plethora of fintech products and appeal to young travelers, is a relative newcomer that could disrupt Booking Holdings, Airbnb and Expedia Group – if any of them don’t acquire Hopper to ease any pains potential. (Although Hopper would be expensive given his significant funding.)

But don’t expect Travel+Leisure, Chase or Uber to make a difference in online travel, because they don’t have the focus.

The biggest threats are not new entrants, but old ones such as the aforementioned Google which is diverting more free traffic from online travel agencies – unless antitrust authorities intervene with meaningful restrictions – as well as earnings hotels that are making further progress in their direct booking strategies. .

At the same time, that other older entrant, namely hotel brands as an industry, has taken a chunk of booking share in recent years as many hotel websites now offer the lowest reserved rates. to members of their loyalty program, and they did effective marketing to drive home the point.

A recent Similarweb report found that from January to May 2022, hotels (-20%) and vacation rental sites (-12%) appeared in better shape than online travel agencies (-36%) compared to 2019 in terms of share of global accommodation bookings.

Hotel brands and Google are much more likely to disrupt online travel agencies than Chase, Uber and little-known online travel agencies such as HotelWiz and with free links recently found in Google Travel.

In the western world, at least, how many new entrant travel companies or sectors have really had a negative impact on the influence of online travel agencies on a global scale? (Of course, there were regional players who strutted their stuff.)

Facebook, who was going to be the next travel booking platform at some point? No.

Facebook Instagram? No.

Amazon, who tried and failed, and tried and failed again in travel, and started small with flights to India? No.

The Air Asia great app? Negative.

The main disruptive forces for online travel agencies have been Google, the emergence of Airbnb, and hotel brands that have taken back a share.

The big online travel agencies will come under pressure, but they will have an important role to play in shaping the future of travel for years to come.

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