Peter O'Connor - HSMAI Europe

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© Peter O’Connor, Essec, 2015 1

Online Distribution Is the chaos clearing or continuing?

Dr. Peter O’Connor Essec Business School

Distribution is a battle field!

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Ten things to think about…..

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10

Incredible pace of technological

change

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How Americans Use Their “Cell Phones” •  18 to 29 year olds more

likely to use their phones as personal computers, digital music players, cameras, gaming devices, social media or internet access devices rather than as a telephone!

•  No longer a talking instrument – now a lifestyle device.

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Ubiquitous and instant access to up-to-the- second

information

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9

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Our customer is changing!

Our customer has changed!

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The Post-Dot-Com Customer Chief characteristic of new consumer

is that they act differently, think differently, buy differently, and are early adopters of new technology.

In the past, consumers may have sought expert advise……

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Now they turn to the web…..

And the Mobile Web

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And Social Media

Disruption !

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Ineffective presence on

online / mobile / social

renders you invisible

Only two things matter!

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Question 1 How will people find your site(s)?

Question 2 Why should customers book

on your site (rather than elsewhere)?

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8

Search positioning remains the critical issue

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28

28 Number of sites considered

before making a travel booking

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Less than one third of consumers start

looking by searching for a

brand

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Gaining visibility is getting increasingly difficult

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What drives search?

Detailed Unique

Organised Topical

Content

See me live……

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See me live……

OTAs winning search battle

•  Dominating SEO results listings •  Booking.com incredible strength in

paid-search (particularly Google)

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paid-search (particularly Google) •  High X0,000 of Affiliate and White-label

deals, also heavily engaged in search

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deals, also heavily engaged in search •  TripAdvisor

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deals, also heavily engaged in search •  TripAdvisor •  Both Expedia and Booking forecast to

increase online marketing spend in European marketplace in short term

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7 Conversion

No point in getting them to your site unless you can sell to them

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Do you have sufficiently deep

content, written in a sales orientated

manner, to convince the customer to buy?

Will this encourage the guest to buy?

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Lack of merchandising = low conversions

rate = high distribution costs

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Both Macro and Micro level!

Why would I book the more expensive one?

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Merchandising works….

What can you do to encourage

your customers to book?

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Now!

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6

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OTA dependency a problem

0%

5%

10%

15%

20%

25%

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Brand.com

OTAs

OTAs Continue to Gain Market Power

2006 2010 Online Penetration 11.71% 21.71%

Online Direct Penetration 5.37% 7.76% Online OTA Penetration 6.34% 13.95%

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OTAs Continue to Gain Market Power

2006 2010 E2014 Online Penetration 11.71% 21.71% 34.66%

Online Direct Penetration 5.37% 7.76% 9.10% Online OTA Penetration 6.34% 13.95% 25.56%

Which Companies? Average Monthly European Visitors for selected European OTAs

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Awful Affiliates

www.SexAndBondageInLondon.com

Which Companies?

European Hotels US$ billion 2006 2010 2014 Total European Hotel Bookings 102.5 101.8 115.4 OTA European Hotel Bookings 6.5 14.2 29.5 Brand.com 5.5 7.9 10.5

Priceline / Bookings 1.3 7.5 19.9 Expedia 1.2 2.0 4.2 Orbitz 0.3 0.3 0.7 Other OTA 3.7 4.4 4.7

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The OTAs are coming to get you!

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Billboard Effect

Cooperation is key!

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5

Magnificent meta-search

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US$ 108 million in 2014

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The Evolution of the Customer Booking Path

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OTAs dominating!

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Promoted Hotels adding another distribution cost

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4

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Today’s consumer

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600%

The Move to Mobile!

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Mobile as a source of incremental bookings

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OTAs ahead!

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3

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People are talking!

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The testimonial is back!

If UK Internet usage was just 1 hour

September 20, 2011

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0 50 100 150 200 250 300 350

www.skittles.com

www.facebook.com/skittles

Thousands

Visitors, March 2012

Social profiles are outpacing branded websites

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Socially Connected

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Have some degree of trust

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Effective if you get it right!

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2 Understand your customer

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Why bother?

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Data is the new

oil!

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1

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Focus on the fundamentals

Need to manage all channels

(electronic & traditional) much more

closely.

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Prioritisation

Clear Strategy

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Dr Des O’Mahony, CEO and founder at Bookassist

New skill sets needed (Yield and revenue management, electronic

distribution, search engine placement, online merchandising and online selling - all

constantly evolving and changing)

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For a copy of the presentation, please email me on

[email protected]

Peter O'Connor - HSMAI Europe

Economy & Finance

Transcript of Peter O'Connor - HSMAI Europe