In 1996, Microsoft unveiled Expedia, a revolutionary concept to empower customers in their travel search and booking. It was the start of the online travel agent (OTA) era, which has grown in strength into a multi-billion-dollar industry. In just two decades, hundreds of OTAs are flooding the market.
Although hotels attempt (often in vain) to recapture a slice of the direct booking market share through special packages, gifts upon arrival or loyalty points, OTAs reign in the field. In fact, according to Travel Daily News, OTAs are projected to account for 41% of all hotel bookings by 2020, with over half of all millennials currently booking their hotel through an OTA – driven by a desire for convenience.
Why customers use OTAs
Whilst the benefits of OTAs are undeniable – free cancellations, user friendly navigation and variety of choice in one place, to name a few – are customers really getting the best value for their money? The market shift has weakened the control of hotels who face an unstoppable force – a double edged sword in the success of ongoing sales.
This monumental market shift also altered how people search, surface and reserve hotels. For example, with choice of free cancellation, multiple bookings are common as people prefer to make a last-minute purchase decision. A study by Expedia revealed that 90% of millennials spend time searching for a deal before deciding on a final booking.
A new way to search
But there’s a market solution to save users hours of trawling the internet for the best hotel price, and it’s called Pruvo – a free online service which tracks hotel prices and alerts users if a cheaper offer becomes available. “I used to conduct my own research to monitor price fluctuations among OTAs and often discovered that the price I’d book was not the cheapest deal,” says Doron Nadivi, COO of Pruvo. “Customers quite often favor a specific OTA and often miss out on a better deal as they are unaware of price drops after confirming their booking.”
Pruvo asks customers to forward on their free cancellation booking and, once received, gets to work on monitoring the web for a lower price. “Our technology works by tracking OTAs whilst seeking hidden deals that are not available to the public,” states Nadivi. Since its launch in mid-2016, Pruvo has saved 40% of its users an average of 12% on the cost of their hotel price. “The hotel industry differs to other markets where it’s typically cheaper to purchase directly with the source, such as in retail, but price parity between OTAs and hotels has forbidden hotels from offering lower prices.”
However, despite the promise that OTAs offer the biggest saving to your wallet, millions of travelers are still missing out on a cheaper cost for their hotel room. “Persuasive advertising has led many to believe that the major players, such as Booking.com and Trivago, offer the best value, but due to continual price fluctuations, no one OTA is better in price than the other,” explains Nadivi. “Many of our users are surprised to receive notification of a cheaper price alert, even if booked on the most renowned platforms. It’s about re-educating the market to understand how OTAs operate, with our objective focussed on navigating around price parity to ultimately benefit travelers.”