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What the Expedia-Orbitz Deal Means for Your Hotel (Travel Tuesday)

What the Expedia-Orbitz deal means for your hotel

I’ve been planning to write a brilliant, insightful, yet surprisingly funny post explaining why Expedia’s purchase of Orbitz will only lead to higher prices for hotels and consumers for a few days now. I referenced this intent, for instance, in this week’s Hospitality Marketing Link Digest. Then, today, I noted that the outstanding Vikram Singh had beaten me to it, offering his own brilliant, insightful, yet surprisingly funny post that does just that.

Further, I completely agree with Vikram’s conclusion that hotel marketers and distribution professionals must focus heavily on taking control of your online distribution to control costs, increase guest satisfaction, and drive greater revenues. In fact, I may have mentioned that a time or two. Or three. Or four.

It’s possible that antitrust issues will derail the deal, but between the fact that the combined “Expe-Orbit-Ocity” (thanks, Vikram, for that), may “only” control 16% of the market by one measure, and the current political environment in Washington, I wouldn’t bet on that.

How You Should Respond to Expedia-Orbitz-Travelocity Deal

For all that, this deal should represent the least of your worries in the longer-term. Attempting to compete head-to-head with Expedia, Orbitz, and Travelocity—separately or combined—is a bit like entering a Formula 1 race riding your childhood tricycle. Expedia, according to recent SEC filings, spent $2.8 billion marketing its offerings in 2014, and another $686 million on technology. Yikes. Vikram suggests that’s like bringing a knife to a gunfight. Compared to those numbers, I’d argue it’s more like bringing a spoon than a knife, but the point remains the same.

The answer, clearly, isn’t to try and outspend these guys. I mean, let’s be fair for a moment. Assuming you had $2.8 billion to spend on marketing, would you even want to spend that much? I suspect not.

Instead, you want to play to your strengths and highlight Expedia’s—and Priceline’s and TripAdvisor’s and everybody else’s—weaknesses. Expedia has come right out and admitted that these recent moves represent a defensive strategy against their greatest threat: Google. That’s who they’re really afraid of, and Priceline and TripAdvisor have admitted much the same. Their fear highlights a roadmap for your success.

What is that roadmap? Well, here are a few ideas to get you started:

  1. Mobile. It’s abundantly clear that Google’s gone all-in on mobile. You must do the same. With the unbelievable growth of mobile in travel research and booking over the last year, you cannot compete at all if your guests can’t find you, browse you, and book you on their smartphones and tablets.
  2. Content. How many of you have received offers from Google to have local photographers take photos or video of your hotel’s interior? I’d suspect most. And how many cars does Google have out there, continually updating its maps and StreetView images? Lots. Why? Because Google gets that local content provides it a clear differentiator its competitors can’t touch. You can do the same, without the expense, by focusing on selling your local market. Partner with your CVB, restaurants, and other local businesses to create a compelling story about your locale that the OTA’s and even Google can’t match. Yes, Google, Expe-Orbit-Ocity, TripAdvisor and the rest can have more content. But can they match the local flavor and the key insights that your people provide? Not likely.
  3. Data. From Google Analytics to Google+ and just about everywhere in between, Google continually increases the data it collects about customers. The trend is clear: Own the data and you own the customer. In fact, Google has built its entire business on this principle. Focus on growing your customer database, then use that data to foster deeper, more relevant conversations with your guests. Measure which promotions and messages resonate with which guest segments, then deliver targeted messages to those segments. Lather, rinse, repeat.

This list is, of course, not entirely complete. Developing the right strategy, partnerships, and execution to effectively compete with Expedia, Google, or anyone else while not blowing a hole through your budget takes time, focus, and discipline. But it should begin to point you in the right direction. You should give me a call if you want to talk more about how to make this work for your hotel.

Conclusion

The bottom line here is clear. Consolidation is upon us and likely isn’t going to end anytime soon. Every time a big OTA (or Google or whomever) snaps up a smaller competitor, you’re going to face higher costs and bigger challenges in the marketplace. But the right response isn’t to bury your head in the sand or think you simply can’t compete.

Instead, focus on building the right brand story for your market and hotel. Make that story available and accessible on mobile. Offer the right content to your guests across devices and channels. And collect the right guest information to develop a deeper, more meaningful relationship with your guests.

Let the others bring knives, spoons, water pistols or what-have-you to a gunfight. You can then just sit back and enjoy the show.

Interested in learning even more about the future of hospitality e-commerce and marketing via the social, local, mobile web? You should register to receive a special report I’ve produced in conjunction with hotel marketing firm Vizergy, “Digital Hotel Marketing in a Multiscreen World.” Developed specifically for hotel and resort marketers, the lessons can help your business adapt to the changing guest environment. You can get your free copy of the report here.

And take a moment to review the slides from my recent webinar, “Digital Marketing Directions 2015: Three Key Trends Driving Your Hotel Marketing Next Year” here:


(And, yes… you can hire me to speak at your next event, too).

Finally, you might also enjoy some of our past coverage of the social, local, mobile web and what it means for your business, including:

Tim Peter

Tim Peter is the founder and president of Tim Peter & Associates. You can learn more about our company's strategy and digital marketing consulting services here or about Tim here.

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