While big chains such as Hilton, Marriott and IHG are out in force, continuing aggressively with their direct booking push, it is clear the OTAs are not willing to sit back and take it. We could even go as far to say there has been a considerable amount of retaliation. In the last year we have seen things bounce back and forth as the battle for bookings continues, with Expedia and Booking.com now making their counter moves.
To prove this point we randomly selected ten hotels in the US from some of the largest chains. We were checking their ranking position on big OTA sites, to try and establish if they were losing share and visibility. Observing data from February and then comparing it with June, we noticed that all of the hotels ranking on one of the OTAs had dropped considerably, with one hotel's ranking dropped by a dramatic 81%. This demonstrates that the OTA has not only moved the hotel further down the page, but has actually moved the hotel's position on their site by several pages. A further tactic to reduce visibility is "dimming" the property listing. Dimming is when they remove images or other features from a specific property so that it is less likely to be clicked on during an OTA-search.
CEO of Expedia Dara Khosrowshahi says, “The sort order in our marketplace is based on a number of factors. A very important factor is conversion, and what we find consistently is that to the extent that you don’t have the best content and the best price on Expedia or Hotels.com, conversion goes down and sort goes down within a marketplace.” He continues: "We think that we’re going to have plenty of hotel partners that engage very, very aggressively in our marketplace and give us the best prices, the best inventory, with terrific content, and we’re pretty confident of that."
So although several of the large chains are making significant moves and enjoying the immediate benefits of their lower rate tactics via loyalty programs, according to Expedia the OTAs will be suffering no major losses, as there are plenty of hotel partners to make up the difference. This may seem like a bold claim, but it's unsurprising when you consider the scope of the hotel industry. Collectively, Marriott and Hilton have around 10,000 properties between them. But booking.com and Expedia, the two OTA powerhouses, have almost 1 million hotels worldwide on their sites - meaning that Hilton and Marriott make up as little as 0.1% of OTA inventory. So despite a lot of noise on both sides, so far there has been negligible disruption for the OTAs. But it's early days, and we may yet see an impact on the power that OTAs currently have over hotels.