COVID Disruption
Former President at Hotels.com
inpractise.com/articles/covid19-travel-disruption
Why is this interview interesting?
- Potential impact on leisure and business travel
- Competitive positioning of OTA’s post-coronavirus
Scott Booker
Former President at Hotels.com
Interview Transcript
Do you think we’re going to see a change in consumer behavior, less so in leisure, but more corporate travel?
I might be out on a limb, on this one, but when I was running Hotels.com, in London, we had people all over the world. I was using Zoom, way back then, because we had to, in order to have productive meetings. You just couldn’t travel all over the world, every week. We may have been at the forefront of doing video conferencing and so forth. Now that we’ve been forced to do this, I think many companies are going to start thinking about, why do we need to travel as much? We can be almost as effective by doing a video teleconference. Yes, my feeling is that business travel may diminish a little bit, from this, just because it’s now proven that we can do video conferencing and be effective at it.
I was pretty shocked about the size of the corporate travel market. I think it’s 30% to 35% of the total revenue in the space. This could be a structurally lower sized market, for travel, globally?
It’s certainly possible. Remember, too, that the corporate travelers are also leisure travelers. They’re part of your most repeatable business that you have. If that diminishes a bit, it could have lasting ramifications for the travel industry.
How do you view hotels and how they would react, post-crisis? More the position of OTAs and the bargaining power between hotels and OTAs, post this situation?
I’d start off by saying that this time period is unprecedented. This the worst kind of event that you could ever imagine, in over 100 years. Having said that, I did go through the financial crisis, in 2008, 2009, 2010, while I was running Hotels.com or in that business. What I saw happen during that time period is, one, all travel companies reduced pricing, to try to entice people to come back. You should see a lower pricing strategy that comes forth, from a travel perspective and a lot of discounting that happens during that time period.
Secondly, I do think there might be a little bit more reliance on OTAs, when it comes back. This happened in the financial crisis, as well, where the OTAs had a lot more money and skill and agility, to go after more consumers through SEM and Meta and so on and so forth. They just had more marketing muscle, to make that happen. I do think that’s likely to happen. There might be more reliance on OTAS, to help drive business. Those are the two main things that will happen that I feel pretty strongly about.
Do you think that could increase the take rate for the OTAs, given that the independents will be looking to just shift rooms and everyone discounting, to fill occupancy?
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