Essay About Equity Investment And Hospitality Industry

Pros and Cons for Preseentation
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ProsConsRestores the direct relationship with customers and puts Accor back in control of both pricing and their customer relationshipReduced dependence on OTAs, which have high fees and cause disconnection from customersOTAs cost the hospitality industry close to $3 billion each yearDisturbs the e-commerce in the hospitality industry and intercept Accor’s customers between searching and bookingCannot be completely free the industry of OTAs, but if the alternatives lowered their fees by even a few percentage points, it would have a huge impact on our bottom line over the long runCustomers could get the same rates they would on Priceline or Expedia—or even lower ones—plus all the benefits of direct booking, such as flexible room choices, loyalty program points, the ability to make custom amenity requests, and no cancellation feesRoom Key is a risky initiative. The equity investment would use a significant portion of the marketing budget.Accor would incur additional costs to develop new online infrastructure to communicate with individual properties, and to change its marketing messages to consumersThe hotels can accomplish Room Key’s pop up strategy itself.  It does not need an intermediary to attract customers who abandon its website. The technology to do that is readily available and not overly complicated to incorporate. Most hotel brands can track the URLs of visitors as they navigate the sites and gather enough information to tell whether they’re worthwhile customers to target. If they are, the hotel company can intervene at any point—even after they abandon our sites—with a pop-up message and suggestive sellingOnline travel agencies attract consumers because they spend big chunks of the revenue on mass-market advertisingOTAs compete to show consumers what they want as quickly as possible. Consequently, they provide a better booking experience.Room Key does not have the same ability as OTAs, and although pop-under ads are economical, they’re unlikely to generate lots of traffic.Low margins + Low Volume = Low ProfitabilityCharging lower fees = Less revenue earned