Most success stories, be they personalities or businesses, involve someone or some entity reinventing itself to stay relevant.  Everything from Apple to Madonna.

I think the writing is on the wall and online travel agencies better do something rather quick to stay relevant in the eyes of traveling consumers.  And it’s not new technology, it’s a shift in their attitude and thinking in regards to their place in the buying cycle, their place as content providers and even their revenue models.

I, for one, have been using the method mentioned in the following San Francisco Business Times article for some time now:

“The Orbitzes and Hotels.coms of the world continue to be useful for price shopping, but more and more customers are going straight to the source to make reservations.”

Why book a United airline ticket and a Hilton hotel on Expedia when I’m “guaranteed” to get the best price by booking directly with the supplier.  I have to punch in my credit card number twice?  Big deal.  Plus, if I’m part of the suppliers loyalty program I can usually get some bonus points/miles by doing so.  Expedia does have some great shopping tools though; so I use their site, but they don’t get my business.  Add to that a collection of “Travel 2.0” sites that are in the works and suddenly using agency sites to shop price starts to lose its draw as well.

The San Francisco Business Times piece quotes Chip Conley of Joie de Vivre Hospitality as saying:

“Third-party sites ‘have to go out of being a Wal-Mart and low-price leader and become more of the Consumer Reports for hotels.’”

Well, I don’t think that’s necessarily the best answer either.  There are a few good travel review sites out there now and I don’t think there is room for many more on a macro level (niches, however, yes).  The newest trends on the internet are collaboration, community driven content, etc.  Those are the angles that the agencies needs to be thinking about.  The challenge is turing that into a real revenue model, however, even if the hotel and air reservations go away (or play second fiddle).

Right now the agencies are pushing packages as something that the suppliers can’t offer and of which they may still hold a price advantage.  This seems like a band-aid solution to me.  It’s only a matter of time before the supplier sites are packaging too and undercutting the agencies once again.  There are no easy answers for the agencies, and they tend to move as fast as a herd or turtles.

Another interesting bit from the article linked below is Conley’s analysis of how the agencies got into this predicament, which I think puts it in terms that any of us working in online travel in the late 90’s already understands (I made my living selling inventory that the hotels considered distressed; and I once stayed at the Bellagio 3 nights for $70)…

“The travel downturn came at the same time (third-party Internet sites) tried to build their business, and they were able to rocket to the moon overnight,” Conley said. “Everyone was looking for a travel deal, and they thought of these web sites as the place to get the best price.” Hoteliers have made sure that is no longer the case, and have invested to improve their own company web sites.

Read the entire article here:

As business clicks, hotels unplug from travel sites - San Francisco Business Times


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