Tuesday, October 21, 2008

The fine line between the hotel industry and college football

While researching my article for our "An Industry Connected" package about the Internet's role in the hotel industry (coming in the Nov. 3 issue of Hotel & Motel Management), I wanted to learn more about the relationships between hotel companies and third-party booking sites, and from what I gather, it is very similar to college football.

You see, I'm a big Ohio State football fan. I live and die with every Buckeyes game. And everyone knows our biggest rival is the Michigan Wolverines—some would say it's the biggest rivalry in sports. They don't like us; we don't like them. But the business of college football changes the dynamic of the rivalry, at least from my perspective, and draws an interesting parallel to the role online travel agents play in a hotel's online strategy.

College football success lies largely in your team's competition. If the other Big Ten (Ohio State's conference) teams lose constantly and are considered weak by the media and by fans, then Ohio State, regardless of the team's quality, is then considered weak and none of our conference wins are viewed as impressive. In other words, Ohio State needs Michigan, its fiercest and closest competition, to succeed. That's why, other than when the Wolverines play against the Buckeyes, I root for the Wolverines to win. It's in my team's best interests in the long run.

This also seems to be the relationship hotel companies have with sites like Expedia, Orbitz or Priceline.

"Initially we looked at them as competition, especially after 9/11 because rates plummeted, but now it's more of a partnership because guests will book there and we need to be there," said Karmela Gaffney, managing director of advertising and e-commerce at Best Western. "We’d much rather have them book at Best Western than say a competitor. In some respects it’s a partnership. It’s a friendlier rivalry."

"Competition or partners? Yes," said George Corbin, VP of e-commerce at Marriott International. "There's a vital role to be played with [online travel agents] ... we want to be on the shelf wherever our customers shop. They can provide us with need-time business we wouldn't normally get and access to markets [we wouldn't normally have]."

"Initially, they were [competition]. People feared them taking away from their bookings, but they are our partners, and intricate to this whole online booking medium," said Isaac Gerstenzang, director of e-commerce for Destination Hotels. "You need to develop partnerships with them. It's just another extension of your hotel. Expedia has their loyal guests and if someone goes there every time, I want them to still come to my hotel. I would prefer if they came here, but Expedia and Travelocity have created a huge brand awareness for themselves."

Ultimately, a hotel wants guests to book through its site. That's why these hotels are pumping more money and time into their websites and online research. They want guests to think of them when booking a trip. They want guests to trust their site and their brand above all else. But true success comes from working with OTAs. These third-party sites book a ton of trips, and being partners with them, and becoming visible on another channel, furthers a hotel's business.

It's like rooting for Penn State to be undefeated UNTIL this coming Saturday—it's just good business.

(Go Bucks!)


Anonymous said...

Chris, Your parallels of hotels and third party booking sites is right on. Your general rooting for Penn State is also accurate, though it will be including this Saturday. We will be pleased to ruin the Buckeye Homecoming because, after all, WE ARE PENN STATE.

Chris Crowell said...

As it stands, I have no comeback. As much as I didn't want to, I will now be rooting for Penn State to take home the title.