PhocusWire: What happens to rate parity when Airbnb is an OTA?

airbnb property

Last week, industry-leading news outlet PhocusWire examined how Airbnb threatens to disrupt traditional hotel pricing strategies, but what happens when the home-share giant is viewed in the context of an online travel agency?

In yesterday’s top story on their site, OTA Insight co-founder and Chief Commercial Officer, Gino Engels puts forth some key questions around rate parity and price competitiveness when Airbnb is considered an OTA, plus looks at how hotels need to navigate an increasingly complex distribution landscape.

You can read the full article on PhocusWire; here’s how it starts...

woman booking through airbnb

Airbnb continues to be one of the travel industry’s favorite topics, right up there with Google’s march towards dominance in the same industry.

Take, for example, Airbnb's massive investment in OYO, which gives it a stake in a potentially formidable competitor that also helps Airbnb hedge its bets in a growth market like India.

OYO’s budget focus is complementary to Airbnb’s upscale appeal, as Airbnb needs to serve customers from budget to luxury if it wants to become an end-to-end travel platform.

OYO generates most of its demand directly, much of it from mobile bookings, which aligns with Airbnb’s own strengths. As Airbnb integrates its acquisition of mobile-centric HotelTonight onto its own platform, there’s now even more inventory bookable on mobile.

OYO also runs its own hotels, leasing and franchising its budget hotels. It’s both a platform and a provider, a demand generator and a supplier.

As lines blur between platform and provider, there are some real questions around rate parity and price competitiveness in this brave new world.

Gino’s article goes on to discuss:

  • Apples-to-apples comparisons

  • Navigating new commission models - and more content to update

  • Spiking customer acquisition costs

  • The rise of disintermediation

Read the full article on PhocusWire.

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