Demand Generation or Demand Shifting, it depends on who experiences it.
Do the OTAs generate travel demand in hospitality? Part II - Revenue Management Experts Point of View
Revenue Optimization — Viewpoint by Max Starkov
It is hard to argue with billions of dollars spent annually on marketing by the largest OTAs. One could certainly make the case that such a robust amount of travel-related content would spark travel wanderlust from even the most "home-rooted" consumer. Over the last 2 years we saw an increase in OTA share vs direct or brand bookings. This seems to indicate that while most brands halted or delayed marketing spend as a way to preserve cash, OTA's were able to take advantage and sway a customer to book on their site instead. Certainly, there may be someone who sees an OTA's commercial on their TV or device and is inspired to plan a trip they previously were not considering taking, but in reality, they were likely already in the mindset of traveling and inspired more by the featured destination than the concept itself. A person who was thinking of spending winter in Hawaii may see an ad for a resort in Costa Rica and consider a change of destination, but they were already in the cycle of planning a trip, even if in the earliest of stages. Or if not a Brand Loyalist, a consumer might see a featured discounted offer from an OTA and perform a search on their site to compare rates, but this does not constitute generating new demand. A more likely source of organic inspiration in today's purchaser base is social media. As the saying goes, "A Picture is Worth a Thousand Words", and in this case, potentially millions of new travelers.
So, whether there is new demand creation or shifting of the existing demand, there is enough evidence to suggest there OTA's have an impact in the hospitality industry. How we take advantage or that demand or how we yield it, it is up to us as commercial leaders to forge a strategy that improves our revenue growth in the most profitable way.
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