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Will Facebook take on TripAdvisor and the OTAs? Newsletter #12

Will Facebook take on TripAdvisor and the OTAs? Newsletter #12

Will Facebook take on TripAdvisor and the OTAs? Newsletter #12 December 24, 2015


In Newsletter #12: Will Facebook take on TripAdvisor and the OTAs? | Insights on hotel technology from citizenM | The mobile front desk

Insights from citizenM on the state of hotel technology.  

Hospitality Net | citizenM's Lennert De Jong on Hotel Tech


Why it matters: Very interesting interview here from Lennert De Jong, one of citizenM’s commercial directors, on what hotels can do to get a handle on the technology landscape. citizenM, for those who do not know, have set the pace with technological innovation. Founded on a motto of “affordable luxury for the people,” citizenM is more commonly known today for its technology and innovation standards, becoming the first hotel to go online-only for booking and leveraging the latest in mobile technology (that’s right, you won’t find their phone number on their website).

Two answers Mr. De Jong gave on the state of hotel technology resonated with us in particular: (1) Fragmentation in technology, he says, is pervasive and universal, and that’s something we’ve experienced as well. In his view, there has not been enough consolidation taking place, especially in the boutique world (although Starwood and Marriott, to their credit, have been progressive on this front). Hotels are using many systems for each type of technological interaction and this is presenting challenges to the operational efficiencies and data extrapolation needed to improve business. (2) When asked how to address this (and other) challenges, Mr. De Jong points to the need to be “more open to innovation.” We spoke at HITEC 2015 about the growing need for the industry to work more closely with startups, and while we’re obviously biased here (!), we think this makes good sense. Startups are by their very nature laboratories of innovation - a collection of nimble problem solvers working to solve complex (and sometimes simple) problems that exist in industries. Startups are open to experimentation more than anyone and look at the breakthroughs we have seen. Only six years ago you would have asked how to spell Uber or Airbnb if referenced it in a conversation, but now look at them. Technology, in all industries, is moving at a thrilling pace, and hotels that are open to innovation stand the best chance of success.  


Give your hotel the Apple store treatment.
Samsung Insights | Mobile Trends in Hospitality: The Mobile Front Desk

Why it matters: It’s still early for the mainstreaming of the mobile front desk, but as this trend picks up, we have to believe it's an innovation that will endure. The “deskless” or “untethered” employee has been the topic of much of our writing over the last year. We like to draw the analogy between this newly mobile hotel staff member and Apple retail store employees. Where else can the same employee meet you at the door, serve all your needs, check you out and walk you back out the door to pick up the next customer? All the while requiring no desk, no help and picking up a hefty amount of your disposable income in the process? What’s not to envy about this as a business owner? With happier customers and a more efficient and revenue producing machine it’s a win-win.

No surprise, your hotels can work the same way. Your staff can also use mobile technology to serve the guest where he or she feels most comfortable. As the report asserts, 71% of hotels are motivated to use mobile technology to enhance the “customer experience and satisfaction.” Indeed, who wouldn’t prefer checking in at the bar over a stiff drink after a long international flight rather standing in line in the lobby?


Facebook: A future giant in reviews and booking?
McKinsey&Company | Facebook & the Future of Travel 

Why it matters: Facebook is already a powerful channel for marketers. It’s becoming increasingly visual and experiential - having moved rapidly from predominantly text-based communication to photos and video (since June this year, there has been an average of more than 1 billion video views on Facebook each day), and the company is also investing heavily in the future of immersive content, like augmented reality and virtual reality, technologies a few of the larger chains have started experimenting with for travel marketing. And with its scale, Facebook can already do a lot to lure people to travel; letting marketers target the right people at the right time, in the right place, on the right device, and with an unprecedented level of personalization. So too, Facebook’s recent moves as a platform for businesses supports this marketing optimization maneuver as well, by providing a centralized and structured home for travel companies and hotels to communicate with future customers and guests.

But this interview only hints at Facebook’s potential role in travel. Because of the powerful role social influence plays in decision making (across all categories, but particularly big ticket items and experiences), Facebook’s biggest role in travel is probably not as a marketing channel, but rather as a natural competitor in the review space to TripAdvisor and even, following in TripAdvisor’s footsteps down the stack, as a competitor to the OTAs. TripAdvisor became the largest user ecosystem in the travel space (with 375 million unique monthly users, over 205 million reviews and an average of 160 contributions per minute) due to the outsized role recommendations play in purchasing decisions. Recommendations from friends and family - alreadythe single biggest influence in travel and hotel choices, are becoming increasingly digital, made in real-time and at scale, and happening largely on today’s social platforms, of which Facebook is king. Data already shows 50% of all travel bookers visited TripAdvisor at some point in their search. How many of those travel bookers also visited Facebook? We’d bet a lot more than 50%. And here’s the kicker - TripAdvisor’s rise to prominence came on the back of Facebook, driven by the company’s integration with Facebook’s social graph in 2012. What will happen to TripAdvisor when Facebook doubles down as a review site? And what will happen to the OTAs when it makes its moves into bookings? Just as Benedict Evans likes to say Facebook didn’t hire former eBay/PayPal exec David Marcus to Messenger just to add stickers, we doubt Facebook hired former Expedia exec McCabe to just spruce up the company’s travel marketing.