Among my favorite television shows is “Moyers & Company,” which plays Sunday mornings on PBS. In a recent episode, Bill Moyers interviewed environmentalist, poet and farmer Wendell Berry. The complete interview addresses some of the challenges involved with agri-business and environmental issues. One of the lines Mr. Berry identifies himself with is that of “standing in front of a locomotive,” referring to the need for someone to speak out about environmental and conservation issues while fully expecting to be driven over by multinational concerns.
I draw an immediate parallel to our industry when I suggest the OTAs are having the same effect on hospitality as agri-business has on the family farm. Can we not equate the independent property to that family farmer, with commoditization of the industry being the net result? Or, for that matter, are brands that do not use advertising as a tool for differentiation doomed to a similar fate as the independent?
These questions probably oversimplify. Allow me to explain.
Looking for a hotel in a city I have rarely traveled to, I try to imitate the average buyer. My tools — TripAdvisor, Expedia and Travelocity — are exceptionally thorough and easy to use. They allow me to not only efficiently sort properties by rating, price and distance from my ultimate destination, but in doing so, they divorce me entirely from the properties themselves for total impartiality.
I never see a website (or electronic brochure) nor receive a recommendation from a travel agent or referral. During this research phase, I’m keeping my net presence at a minimum and limiting my digital bombardment. With the OTAs in hand, all property options are uniformly presented. If I lack familiarity with certain brand names (and avoiding biases/preferences gleaned from years of travel experience), my selection would be made as if any hotel experience did not count: star rating, price, distance and, ultimately, my booking.
So, why raise the alarm bells? Simple. Ask yourself if you want to be in the commodity business or the hospitality business. If the former is your choice, stand aside for someone who can do your job more cheaply and more efficiently. If you do nothing to value-add the proposition, then you are of limited use to the entity. And if value-added options are irrelevant, as they are in a commodity marketplace, then your function will inevitably become redundant or obsolete.
I believe we all joined the business of hospitality to be bona fide hoteliers. That involves a wide range of activities centered on the concept of guest-service delivery. The paradox then is why we succumb to the short-term pleasures of instant gratification through easy OTA bookings knowing full well that every customer these websites satisfies is one more nail in the coffin towards commoditization.
I see the intensity of revenue managers manipulating rates to maximize their respective property’s OTA success and worry out loud if the tipping point has already been crossed, at least for those hoteliers not in the upper end of the spectrum. I see more and more managers looking for ways to cut costs as a response to lower ADRs and reduced margins — all a result of competing primarily on price. All this, and I wonder: Am I too standing in front of the locomotive?
(Article published by Larry Mogelonsky in HOTELSmag on January 7, 2014)