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Charlie Cowley
Charlie Cowley

July 28, 2022 - 4 min read

Three things OTA titans can learn from newcomer startups

Charlie Cowley

Co-founder and Head of Business Development

  • For a long time, setting up a travel business was no mean feat. Just getting access to a good selection of hotels, with competitive rates and availability, was a tall order. Selling them for a profit was almost impossible. But with a new breed of OTAs entering the market, things are changing. Impala’s co-founder and Head of Business Development Charlie Cowley explains what’s happening - and what the old guard can learn from the new kids on the block.

It wasn’t long ago that most hotel stays were sold from glossy brochures, and even today the high street shop still plays a big role in deciding where customers go on their holidays. But while the arrival of the internet has forever changed the way customers search and book, the global accommodation market is still dominated by a small number of big players.

That’s because technology - or rather, the lack of access to it - presented huge barriers to entry for newcomers. It’s part of what’s caused significant consolidation in the travel business over the last two decades, and what’s driven the balance of power - and travel market share - into the clutch of just a few mega-players.

But those barriers to entry are coming down. New Open Distribution technology, led by Impala, is democratising access to hotel inventory - on favourable commercial terms - so starting a travel business is much more appealing than it once was. That means a new wave of startup OTAs is entering the market. Newcomers like RemoteDream and Kobu are embracing Open Distribution. They’re taking properties to market in record speed and enjoying the ability to adapt fast - all while negotiating their own commercial terms directly with properties. There’s a lot the incumbents can learn from the vanguard. 

These are three of the most important lessons from my experience in talking to travel businesses every day.

You can be sure that someone else is out there putting the new technology to work.

Adopt new technology first, not last

We’ve all heard the cautionary tales of Kodak, Blockbuster and Xerox. But you’d be surprised how hard big companies with longstanding ways of working find it to embrace new technology. The smart ones adopt it first. The lucky ones adopt it late. The unlucky ones adopt it too late. 

Of course, there’s a balance to be struck between trying out any new product that comes through your door, and picking what’s right for you. But while big corporations get stuck in long meetings debating whether something is too good to be true, you can be sure that someone else is out there putting the new technology to work. An agile test-and-learn approach can go a long way to quickly evaluating the products and services that will help your business flourish.

Make sure your operations are set up in a way that prizes and enables betterment and progress.

Organise to challenge the status quo

With shareholders, customers and employees to keep happy, it’s understandable that leaders build processes and structures that are designed to deliver repeatable, predictable results. But one common issue I regularly come across is that everyone agrees that adopting a new technology could yield great results. But nobody is actually responsible for implementing it. Is it the connectivity team? The commercial team? The supply team?

So to longstanding businesses, my advice is simple: make sure your operations are set up in a way that prizes and enables betterment and progress. Because once you’re at the top of your game, there’s no shortage of entrepreneurs out there who’d gladly take your position.

Existing OTAs should consider how their product - rather than just their brand - will help them truly stand out.

Product muscle will soon outgun brand muscle

The experience is pretty similar regardless of where guests book today. Prices may vary by a dollar or two. Availability might fluctuate slightly. One site might organise its filters slightly differently to another. But ultimately it’s a search, filter, select and book process. This means that brand trust, loyalty programs and price become key decision-making factors for travellers.

Inject a bit of product innovation, though, and things change. Might parents pay a premium to guarantee interconnecting rooms? Will hotels offer better commission to agents able to connect them to ultra-specific guest profiles? As new technology opens up new product possibilities, existing OTAs should consider how their product - rather than just their brand - will help them truly stand out.

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