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Opinion: is a hotel chain Expedia’s next target?

Howard Kemball - EDITED

Leading Asset Manager, Howard Kemball, asks ‘what’s next for Expedia?’ in the wake of the company’s planned acquisition of Wotif Group.

I work with five hotel operators and across nine well known hotel brands. Over 20 years ago, the major hotel operators in Australia disregarded the use of Wotif as a mainstream channel due to its ‘distressed inventory’ status.

In other words, the operators thought they could do a better job than a third party with the possible exception of airlines (GDS) and travel agents generally

In a very short time, Wotif in Australia and Expedia, Booking.com, Priceline across the globe have become bigger than the hotel operators’ own sites, because:
-They’re faster;
-They compare prices; and
-Their marketing budgets are huge.

Compounding the issue is the fact that most operator websites are:
-Clunky and slow;
-Static instead of dynamic;
-Product instead of destination oriented;
-Verbose instead of pictorial or animated.

Most global operators haven’t come to grips with the fact that the Meta sites are bigger, stronger, faster and richer than they are. They believe that brand and loyalty programs are the key to offsetting this onslaught but unfortunately for them (and thus hotel owners and investors) are starting to overtake hotel sites with their own branding, marketing and even loyalty.

Who knows, maybe Expedia’s next investment target is a major hotel chain or even an airline.

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