How the OTA landscape in Asia changed during Covid
IT speaks to the acceleration of technology adoption among independent hotels in the Asia region that despite a year of literally no cross-border travel, ZUZU Hospitality Solutions was able to double its customer base from 1,500 to 3,000 last year.
And while the start of the year remains dismal for cross-border air travel – according to AAPA (Association of Asia Pacific Airlines), its airlines carried a combined total of 1.3 million international passengers in January, just 3.9% of the same month last year – Dan Lynn, co-CEO and co-founder of the technology solution provider for independent and small property owners said these businesses are preparing for the future.
“There is greater reception from hoteliers, they are really serious about digitisation this time. This incremental long tail of travel is incredibly resilient, they are ‘cockroach’ businesses. With the right cost structures, and investing in the right things now, they can emerge stronger,” said Lynn.
ZUZU itself has also managed to scrape through 2020, cutting its costs by 50%. It decided to retreat from Australia and Taiwan and instead focused on markets such as Indonesia, Malaysia and Thailand.
With co-CEO Vikram Malhi and Lynn both coming from an OTA background – both formerly worked with Expedia – a key focus has been on helping their customers understand what OTAs can do for their business. “Working with the right kind of OTAs is critical.”
Covid has certainly changed the OTA landscape in Asia. “We’ve seen global OTAs adjust to tap local demand and local OTAs digging deeper into their home markets,” said Malhi, adding that it was important for independent hotels to understand these changes with access to data.
According to Q4 2020 data gathered by Zuzu, domestic players continue to capitalise on the closed borders, driving the shift towards domestic travel, to increase their market share.
Below are updated market share charts with highlights.
Given the changes happening in OTA channels as a result of Covid, Malhi said it was important independent hoteliers diversify their distribution channels to work with more, rather than fewer, OTAs.
“The more OTAs a hotel works with, the more chances it has to attract travellers across the globe. Given the time and effort required to add and manage OTAs, most independent hotels preferred to work with only a few OTAs that drove high volumes. But, with the changing OTA landscape, those demand volumes have quickly shifted underlining the need to work with a diverse group of OTAs.”
They should also actively manage OTAs. Said Malhi, “Think of OTAs as big crowded malls and hotel listings as stores in those malls. All stores are selling a similar product and competing for the same customers in the mall. The stores that will get more buyers are the ones that stand out in one way or the other. On OTAs this means ensuring a hotel listing has the best possible pictures, most accurate content, competitive pricing, attractive promotions and good traveller reviews. The hotels that are best at managing OTAs do these activities consistently and frequently on every OTA with which they work.”
And thirdly, hoteliers need to adopt technology to manage these distribution channels. “Not using technology makes it almost impossible to partner with, and manage, a diversified set of channels. At the minimum a basic channel manager and property management system is required to effectively manage all channels.”
Said Malhi, “It is clear that when the rebound happens, the resurgence will be stronger online. A lot of offline travel businesses has not survived. This tends to favour the big chains and it will be harder for independent hotels to tap into this recovery unless they get serious about digitisation.”
• Featured image credit: Vadim Sazhniev/Getty Images
