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Hoteliers, There’s No Room To Relax After Amoma Downfall

Hoteliers, There’s No Room To Relax After Amoma Downfall

Fornova’s work with hotels to shrink Amoma's inventory was one of the driving forces behind the downfall of the online travel agency (OTA). However, it’s not all good news for hoteliers, instead, you should be seeing this as a warning to do more to protect your inventory.

Working with many of the world's largest hotel brands, we have made five times more test reservations on Amoma between July and September this year compared to the same period last year, which suggests a clear focus by our customers to reduce leakage to the site and take back control of their inventory. And, although many hoteliers welcomed the demise of Amoma, which undercut hotels on price,  without action, hotels will continue to be at the mercy of wholesalers and uncontracted OTAs.

In reality, the downfall of Amoma is just the tip of the iceberg - it does not solve all of the hoteliers' problems as there are many more sites just like them waiting to pick up their inventory. Amoma was just one of the better-known providers.

In the last year, we've seen the larger OTAs also move into this market, buying inventory from wholesalers in a similar way and offering rooms at a lower rate than the hotel's best price. With globally recognized brands now operating in the same way as the likes of Amoma, the risk for hoteliers, and guests' consumer rights, is even greater.

The best way for you to protect yourselves from being undercut is by taking your distribution health more seriously and clamping down on your inventory being sold to these uncontracted sites by wholesalers. We're already seeing the larger chains intensely focusing on this challenge.

In my opinion, there are three drivers behind Amoma folding - not all of which are good news for hoteliers.

The first reason is the pressure they were feeling from the larger OTAs who, in the last year, have evolved to also become marketplaces sharing both the rate they've agreed with the hotel and the sourced rate from wholesalers, effectively undercutting the agreed rate.

That not only negatively impacted Amoma, but it also constitutes bad news for hoteliers and their guests. Just as with the uncontracted sites like Amoma, guests have fewer consumer rights when buying from these marketplaces, especially around cancellation, and the hotels continue to be undercut.

Secondly, Amoma had seen a significant reduction in its inventory. Through our software and guidance, hotels have been able to identify the wholesalers that have sold each room. They then took steps to stop their inventory being sold to Amoma and for us, it's rewarding to see our work delivering such significant results.

Ensuring rooms are reserved either directly through the hotel or a contracted OTA is the best outcome for both the hotel, which can secure its margin and for guests who have all their rights protected.

Finally, most hotels have moved away from static rates to become much more responsive to demand and, as a result, the inventory available to wholesalers has been reduced as the number of direct bookings and sales from contracted OTAs increases.

While there's no doubting that hoteliers around the world breathed a sigh of relief at the news of Amoma's demise, it is clear that that there's no room for anyone to become complacent in the drive to offer the most competitive room rate.

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