Exclusive Views: What these strategies be enough to keep the millennials bookings?

During the last year, there wasn’t a single week that we didn’t read or hear of yet another global hospitality brand who is aiming to get more direct bookings.

Accor’s CEO Sebastien Bazin was the first to talk about “Getting the business back from the OTA’s”. His move, was followed earlier this year by Hilton’s CEO �" Christopher Nassetta. Starwood and Marriott followed suit and this week the last Lodging Giant �" IHG made its move.

The basic principal for all of the above mentioned brands is simple:

Linking up between their respective loyalty programs and exclusive rates that will be available only to their loyalty program members.

Over the past decade, OTA’s were grabbing market share from hotel companies. TripAdvisor, Expedia, Booking, Hotels, Travelocity, Priceline, Hotwire Kayak and Orbitz are just few of the big names that most of us immediately recognize.

During the last five years with the emergence of the “Sharing Economy” new players joined the game. Brands such as Airbnb, HomeAway are changing the face of somewhat sleepy, conservative and somewhat complacent hotel Giants.

A few weeks ago, Accor’s CEO Sebastien Bezin has said in an interview: “It’s foolish and irresponsible to fight against the sharing economy” Supporting his statement Accor bought into two ‘sharing Economy’ companies: “OneFineStay” and “Oasis”.

In 2012, some of the world's largest hotel groups with brands such as: HILTON, Hyatt, IHG, Wyndham and Marriott made a miserable attempt to tackle the OTA’s. They created a joint hotel search engine called Room Key.

During the past 4 years, OTA’s market share continued to grow on the account of direct bookings. Let me name some of the reasons I identify as key to the success of OTA’s over Direct hotel bookings:

• OTA’s offer an easy to book ‘one-stop-shop’ experience over hotel brand sites
• OTA’s are the equivalent of ‘mega-stores’ offering multi �" choice rather then a single brand store 
• Most OTA’s have recognized at an early stage that the customers want flexibility and they offer in many cases free of charge ‘last-minute’ cancellation policies 
• Some of those OTA’s offer exclusive rates that beat the ‘Best price’ policy that lodging brands offer in their own hotels. In some instances, prices of OTA’s were lower then brands own ‘Friends and Family’ rates. 
• OTA’s recognized that the younger generations �" what many call the Millennials, prefer lower rates over fruit baskets and upgrades.

Amazingly, some of the big global hotel brands were actually the ones who helped the creation and the huge growth of the OTA’s by supplying them with ‘last-room’ availability, ‘best-price guarantee’ and direct linkup to their own In-House reservation systems. In a strange way, hotels became depended on the OTA’s distribution, and in the process giving up on their own brand identity.

During the last 12 months’ global brands are fighting back, trying to win back their lost clients and loyal customers. Trying and succeeding winning back some control of their own room inventory.

According to Marriott’s President & CEO - Arne Sorenson on of Marriott’s key reasons to take-over Starwood Hotels was Starwood’s loyalty program �"SPG.

Will all of that consolidation, M&’s and aggressive marketing towards loyalty clubs members work?

That needs to be seen in 1-2 years’ time.

I have some doubts. The key reason for my skepticism are the Millennials.

According to a recently published research written by Richard Fry and published by PewResearchCenter, the Millennials (age 18-34) have surpassed Baby Boomers as the US largest leaving generation. They number now 75.4 millions surpassing the Baby Boomer Generation (ages 51-69) with 74.9 millions and Generation X (ages 35-50)

Which brings me to two big questions: Is the Millennial generation brand loyal?
Do these guys shop and spend their money the same way other Generations did?

I do think that some of the most senior executives in the lodging industry are far too busy developing strategies that were good for ‘Yesterday’s travelers and holiday makers’.

What we all need doing is to understand the Millennials state of mind, way of thinking and get them on-board and find out what ‘makes them tick’.

Let me ask you, Are the guys who love to stay in Generator Hostels or Meininger will stay in the future in SHERATON, HILTON or Marriott and be members in the loyalty programs?

Here is a link to my writing from May 2014.

The millennial generation �" their favorite retail clothes shops and consumer buying behavior.

Just food for thought …

Joseph - Yossi - Fischer the CEO of Vision Hospitality & Travel - international lodging & Travel Solutions

This is strictly an exclusive feature, reprints of this article in any shape or form without prior written approval from 4Hoteliers.com is not permitted.