Indira Gandhi International Airport, New Delhi

At last week’s Explore 24 conference in Las Vegas, Expedia Group Senior Vice President, Hotel Market Partnerships, Hari Nair, spoke exclusively to HM about opportunities for hoteliers in the US$2.3 trillion travel market.

We know Expedia Group has valuable travel insights. What are you seeing in terms of the global travel outlook?

The global travel market is currently worth US$2.3 trillion and it will probably be somewhere in the region of US$3.2-US$3.5 trillion in the next four or five years. There is a lot of room for everybody. But if you break it down in terms of the players – OTAs, travel agencies, hotel websites and other players – all of them will be growing at a rate of somewhere between 6-10%. OTAs at the higher end of the range, 10%; hotels’ own websites, somewhere in the 8% range, but a really robust rate of growth. If you look regionally at North America versus Asia versus Latin America and EMEA, those same numbers, you will see Asia growing at almost 13% – very fast, high growth, lots of intra-Asia travel – Europe and North America growing at almost half the rate because they’re the most mature markets.

Expedia Group SVP, Hotel Market Partnerships, Hari Nair

There’s a growing population in India who are up and coming. Indians – and I can say this with confidence because I am Indian – will typically travel to places like Bangkok, the Philippines and Vietnam first before they start going to Australia, and then go to Europe; the Americas is too far, it’s very expensive.

Then if you take a look at lines of businesses, you look at car versus activities versus flights versus hotels – hotels is, by far, the biggest category; it’s the most fragmented. Therefore, the growth rates for hotels will also be in the 6-8% range, whereas activities, things to do, will grow at a rate of almost 10%.

We can go to a hotel and explain this is the travel landscape over the next couple of years, tell us what you need, and it’s quite likely that we have a solution based on what their objectives are. If you want to attract a specific type of traveller, we have tools where you can provide an offer that is specific to an American traveller, for example, that no one else will see. We can segment points of sale and you can offer something that is available for all or just for some.

What are you hearing from hotel partners at the moment? What challenges are they facing?

We work with hotels all around the world. We collect data from them in terms of how they engage with us, but we also have a team of account managers that work with hotels. The number one thing that we hear from hotels, particularly in a post-Covid environment, is that cost of operating a hotel has gone up, therefore, there’s pressure on the bottom line. Number two is the cost of talent has gone up. In a world where remote working is a thing, you are paying top notch dollars to get talent. To be a housekeeper or to be a bellman, you need to show up, you can’t do that from home. So, when you combine these two things, hotels are thinking, ‘How do I optimise revenues? I don’t have the manpower to manage all these channels.’ That’s what we hear.

The second thing we hear – and we’ve seen it, it’s one of my biggest revelations here at Explore 24 – is hotels have largely considered us as a consumer-facing business and have underestimated the power of our B2B arm, not understanding that we power 60,000 other companies. Travellers travel in a variety of ways; some go directly to hotel site, some come to our site and then there are some travellers who are very loyal to other companies – and the fact that we power them is a completely new revelation. I think the opportunity for us to help our hotel partners is in making it easy for them this web of complexity through our data, insights, and tools.  

What about the Australian hotel market in particular?

Australia is a really interesting and important market for us – Expedia acquired Wotif a number of years ago – and I think Australia is one of those few geographies where we have a really good mix of both domestic and international travel. And usually, hotels want to have a fair measure of both. They want the quick getaways or staycations – and Wotif is able to do that – but at the same time, they want that long-haul customer who is going to travel long, spend more, stay longer, fewer cancellation rates, and so on and so forth. We have the ability to give our partners the best of both.

Our big thing for our hotel partners – not just in Australia, but everywhere – is be very clear to us about what your objectives are, because it helps us give recommendations. Everything else falls under two buckets. Number one is offer and value, meaning make sure you’re available, that your rates are competitive, and that you’re giving something to our loyal members. Number two, where hotels need the help, is traveller and guest experience. Once we have delivered the customer, are they being treated the same way as a customer who came directly to the hotel’s website? In the last two years, we’ve been very purposeful about educating partners on the importance of doing that, and not discriminating based on what channel has been used [as it can impact reviews].

How do you support those hotels that encounter bad reviews or that are not performing well on that front?

Most travellers, not just on our platform but in general, mean well, so something must have really gone wrong for them to be upset and make it known to the world. They want to see hotels make an effort, and that is where we are helping properties by recommending the specific areas that have can be improved based on guest feedback.

The cost of operating a hotel has gone up and that has resulted in hotels putting up prices. At the same time, there’s not enough staff and there might be a reduction in services. That is where we continue to educate our hotel partners, saying it is okay if you’re taking away services, but be transparent and make it known that the pool closes at 5pm. Don’t have the content say it’s open until 9pm because you didn’t make the change. Then of course you’re going to deal with a pretty irate traveller.