Ques : What does OTA's do?

How Accor should manage its relationship with

these channel members?
Online Travel Agencies (OTAs) :
Online Travel Agencies (OTAs) are online hotel reservation marketplaces that offers hotels and
users a third party booking service as an alternative to hotels own booking services. Hotels sign
up with OTAs and OTAs facilitates the users with their decisions of travelling destinations by
providing them all the related information regarding the hotels in which the customer wants to
stay. In return, OTAs charged a service fee from the hotels.
OTAs buy lots of key words which helps the hotels to gain new customers because the more
customers would search about a hotel reservation, the more are the chances that they would
end up booking through OTAs (due to their higher rankings). OTAs are powerful reservation
services but their service cost is high. They are currently charging 25% commission from hotels.
There’s a new OTA named as “Room Key” but it did not market its service like the other OTAs
did (Expedia, Priceline, Booking.com) instead it targeted the visitors who denied their search
without booking a room and gave them another chance via a “pop-under” ad which again took
them to the Room Key site. Room Key was a new entrant so it was charging less commission
(10%) and was growing rapidly in the online hotel reservation marketplace. Hotels and OTAs are
dependent on each other so a balanced relationship between the two is essential.

Accor’s Relation With OTAs:

Since Accor wants to explore a new digital frontier, OTAs could help Accor a lot in gaining new
customers and as they get those customers, they could retain them and then make them book
rooms through Accor’s direct online channels as in this way the customers will be able to get
the loyalty points which they won’t get if they book from third party site.
Accor should negotiate with OTAs on the prices that they should charge them less commission
and in return Accor would provide them with valuable customer data that OTAs could kept in
their directories.
Along with their current distribution strategy, Accor should also focus on the opportunity of
“Room Key” as it is a growing online service, charging less commission and huge number of
people are visiting it, around 14 million unique visitors per month (by September 2012).
Accor should offer its customers a different booking experience when they are booking from
Accor’s own website/mobile app than booking from OTAs. In this way, they would be able to
generate sale from both of their channels. (e.g. different design of the website and some added
features).