OTAs launching hotel brands: Opportunity or threat?

Online booking giant Ctrip has finally made the move into hotel management with the launch of hotel management brand Rezen Hotels Group. The aim of the launch, announced at the World Cultural and Tourism Forum in China, is to bring together high-end Chinese hotels under one banner and improve their performance with 'big data analysis' backed by Ctrip.

In some ways hotel management is a natural progression from the marketing and distribution already undertaken by Ctrip and other OTAs on behalf of the hotels they work with. Indeed, Peter O'Connor of ESSEC Business School suggested last year that rapidly rising franchise fees could lead hotels to abandon their chain affiliation in favor of simply handing the reins to their OTA partners.

The launch of Rezen Hotels Group is symptomatic of a travel industry in which the boundaries between suppliers and distributors, distributors and advertisers, grow fuzzier each day. The questions it raises for the Direct Booking Movement are intriguing; is this, for instance, a blueprint for how major OTAs could lend their powerful data scale to the benefit of hotels? Does it call into question the staying power of high-fee, asset-light hotel brands?

One thing for certain is that other leading OTAs will be watching Rezen's performance with interest. We may not be far away from a world in which Booking.com or Expedia acquire a major chain in the same way that Amazon acquired Whole Foods back in 2017. With the recent update to Google's trademark policy muddying the waters even further over who 'owns' the hotel product (new guidelines make it clear that advertisers can bid on a trademarked brand name if their page provides information on or a path to purchase for that brand), we may see more absorption of physical hotels by their digital distributors as hotels struggle to market themselves on their own terms.

Whether this trend is one for good or ill is something that remains to be seen. How do you see things playing out? Let us know at content@triptease.com - we'd love to feature your response in a future post.

About The Author

Lily is Head of Content at Triptease. When she's not investigating the industry or spreading the word that #DirectIsBest, she enjoys music, cycling, and obscure radio quiz shows.