Are zero-commission OTAs becoming a viable option for hotels?

  Posted in Online Travel Agents

OTA commissions

The open letter addressed to hoteliers reveals a lot about the motivations of the people behind the world’s first zero-commission online travel agent (OTA).

Posted on the homepage of Traveliko.com, the letter is signed by the company’s three founders, Bjorn Harvold, Martijn Dekker, and Yann Gouriou. The three men describe their business as a movement, specifically a “travel alliance for hotels”.

With career backgrounds in hotels, Bjorn, Martijn, and Yann say they were tired of seeing their profit margins eaten by OTA commissions. Their solution, Traveliko.com, is sold as a “…one-stop shop for hotels to get online and sell rooms and more at 0% commission”.

The website also offers help to hoteliers who feel like they’ve lost some control over their inventory and overall online presence. The open letter calls 0% commission a “game changer” and urges hoteliers to use the freedom it promotes to think bigger.

Being an OTA itself, Traveliko can appear at odds when voicing its concerns about online channels. However, the founders appear to have struck some balance between their anti-high commissions message and their pro-online distribution sentiments.

“We are more than just an OTA. Traveliko is consolidating the travel ecosystem and making online distribution less costly and manageable again”, says Bjorn, Martijn, and Yann. “As a member of Traveliko, you are part of the alliance and you have a say in what the future of online distribution looks like.”

The logistics of a zero-commission OTA: How does it work?

SiteMinder spoke exclusively to one of the Traveliko founders, Yann Gouriou, to find out more about the concept and understand whether there’s enough power behind the movement to take it fully mainstream.

We start by asking Yann about the logistics of the setup for hoteliers and what makes Traveliko different to other online sales channels.

“There have been a few attempts by some startups around the globe in the last few years. But none offered a free listing option with the equivalent features to what the traditional OTAs offer,” explains Yann. “Most of them offer subscription-based membership. Traveliko.com is the first fully independent OTA platform offering a free listing allowing hotels to sell online with same features as other online platforms.”

The option he refers to offers hoteliers a listing on the site for free with no minimum room allocation applied, channel manager integration such as SiteMinder, and up to 100 bookings a month (or bookings to the value of $1000 (USD)).

If hoteliers want to sell packages and use advance rate plan and promotional features, then the next tier is available for $14.95 (USD) – with the cap on monthly bookings increasing to 250. Further premium and VIP levels of membership are also on offer. Early adopters include the Rembrandt Hotel in Bangkok, Dusit International, and Centara Hotels.

Yann says the attraction for these properties, despite having more resources than independent operators, is to take back control of their distribution.

“In a very fragmented industry, occupied by many global and domestic players, hotels are forced to invest in technology to fight against their own distribution partners that control the market. While large chains might have sufficient resources to invest in the battle, small and medium size businesses, who represent the majority of the accommodation supply in the world, do not,” says Yann.

He believes Traveliko has come along at the right time: “At high cost, hotels slowly lose control of their inventory and distribution to the detriment of large OTAs, wholesalers – the emergence of our disruptive business model to rebalance online distribution is therefore a natural evolution.”

Hoteliers using Traveliko are able to make the most of the features they’ve become accustomed to on traditional online sales channels. Operators can package add-ons, upload videos, and provide information on amenities such as restaurants, spas, and activities. All this makes Traveliko a content rich platform and hotels are encouraged to maximise guest loyalty by offering some freebies and attractive member rates to Traveliko users. With the guest experience increasingly starting online, Yann says hotels that partner with his business should be putting guests first: “We’re all about adding value and offering a better experience to our users.”

Is zero commission the future of online distribution for hotels?

Yann and the team at Traveliko couldn’t be happier with the hotel industry’s response to their offering. Much of the support is thanks to the community of hoteliers that Traveliko is actively building. There’s a democratic approach to the development of features with hoteliers able to vote and have their input on the tool.

Hoteliers are encouraged to discuss new features on the platform, and if they don’t like how something is being done they can bring it up with other hotel members and everyone then gets to vote on the topic. Yann says they want to ensure hotels have the tools to get the job done, but he also wants hoteliers to use their collective voices to shift distribution into a new direction.

He says the uptake has been positive: “The response has been overwhelming to be honest. We have received encouragement and support emails from hotels from all over the world. We launched our zero-commission models a few months ago and already 1,700 hotels have joined the platform. We’re experiencing steady growth, but most importantly we are creating a movement that we hope will trigger effective changes in the industry. Our ultimate aim is to give control of distribution back to all hotels.”

The team at Traveliko are under no illusion that they have a long way to go as Yann explains: “We certainly hope that hotels will turn towards cheaper distribution channel alternatives, however the battle against the two giant OTA holdings is far from being simple as they dominate online presence. We offer the alternative – now it is up to the hotel to initiate the change.”

Yann compares the zero-commission OTA movement to the ‘farm to table’ campaign that the food industry promoted in recent years.

“There is enough weight behind our movement. Suppliers are tired of being pressured by dominant distributors and need to get together to make the change happen. If they are happy with the current status quo in the industry and enjoy seeing their profit margin being squeezed, then we cannot help them. We have built a tool for them – by hotelier, for hotelier – so that they have a distribution alternative, but we cannot force them to get onboard.

“To make the shift we need the support of the industry,” urges Yann. “This is a movement. You have a choice now. Choose to say no to commissions. Spread the word.”

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