Budget and Mid Market hotels will continue to dominate India’s lodging space
Published on: Sep 2019
- Travellers are gradually shifting towards experiential and adventurous stays which are offered by homestays and hostels
- Expected to witness the highest growth
Hotel Aggregators Saw a 40% YoY Growth in GBV Terms During Q1CY19
Published on: Apr 2019
In Q1CY19, leading hotel aggregators have shown 48% YoY growth in Quarterly Booked Room Nights and 40% growth in GBV. One of the big levers of this growth has been the continuous efforts in onboarding new hotel partners onto their platform.
The last year has witnessed
- An increased focus of players on partnering with hotels in Tier-3+ cities to increase their coverage
- And heightened efforts to increase their share of corporate bookings (higher ARR through offering premium hospitality services) from the existing markets.
Additionally, increased spend on marketing activities to ensure sustained customer acquisition and improving on service quality metrics for customer retention has also driven this trend.
Also, the relationship of Hotel Aggregators with OTAs strengthened with several exclusive partnerships which enabled the Hotel Aggregators to list their sellable rooms on the OTA platforms. This actually helped Hotel Aggregators edge past the OTAs in recent months in terms of the total market share of the online hotels’ space.
Hotel Tech- Initial signs of turbulence in platform-hotel relations but fundamentally well-placed relationship
Published on: Feb 2019
The online travel aggregator space has seen strong growth in the last couple of years, as visible in strong partner and room inventory growth coupled with rapid growth in total industry bookings. Yet, once the high growth and honeymoon period ended, we were bound to see a transition into the initial turbulence stage. Multiple indicators show that this is indeed the case- hotel partners complaining of high discounts, business model shift to revenue share rather than minimum guarantees and platform’s growing focus on inhouse brand creation for quality and margin control. We have seen this story before in other sectors- all these are indicators of a sector shifting into turbulence phase.
However, a more balanced analysis also shows that despite the challenges, many hotel partners find significant positives in working with the hotel chains. For many of the partners, revenue have improved significantly while not eroding margins heavily due to strong tech efficiencies.
This tells us that hotel tech players can accelerate the shift to a ‘Stable Relationship’ (Stage 3) with partners by doing the below-
- Focus on continued cooperation and strong support to the high quality and highly satisfied hotel partners
- Let the lower value/highly dissatisfied partners organically leave the ecosystem, thus bringing up the overall quality of the partner base
- Ensure a balanced and steady rather than highly aggressive growth of inhouse brand to avoid direct conflicts with hotel partner