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Hotel leaders split on online travel agent potential


BY JAMES WILKINSON IN NEW YORK

Global CEOs are split on the potential of Online Travel Agents (OTAs), with many confident that guests will look to book directly going forward.


Hoteliers believe direct reservations are the way forward

Speaking at the 33rd Annual New York University International Hospitality Industry Investment Conference earlier last week (June 6), Starwood’s President and CEO, Frits van Paasschen, said it was a market that was not as significant as some third-party intermediaries make it out to be.

“We generate less than five per cent through the OTAs as it is,” van Paasschen said on the ‘CEOs check-in’ panel. “The smart people who book go through the proprietary channels.”

Starwood’s CEO said he was confident the direct channels would continue to drive significant growth into the future – a similar outlook from fellow panellist, IHG’s CEO designate and current Chief Financial Officer, Richard Solomons.

“OTAs are a distribution channel that is there and they won’t go away,” he said. “But the best deal for guests is by going direct.”

Hilton Worldwide’s President and Chief Executive Officer, Christopher J Nassetta, was, however, more excited about the segment going forward.

“It is one more distribution channel (but) you can make money from that customer,” he said.

“Over the last five- to eight-years, we have been trying to manage OTAs to benefit us.

“While the cost of them is hotly contested, I think of it as a net – as a good thing – and it is how you manage it,” he said.

 
Air New Zealand’s premium economy and Virgin America

SpiceNews flew to New York with Air New Zealand and Virgin America. A number of flights on Air New Zealand’s Auckland-Los Angeles service are operated by new Boeing 777-300 aircraft, which feature the next-generation premium economy cabin, which offers futuristic seats, gourmet dining thanks to new induction ovens, a fine selection of wine, entertainment on demand and large pillows to ensure a good night’s sleep. Virgin America offers one of the best domestic economy cabins in the sky, complete with live in-flight TV and WiFi, and food and drinks on demand, which can be ordered from your seat. Virgin’s schedule connects well with Air New Zealand and while you’re flying across the United States, you’ll also pick up valuable Velocity Rewards points to redeem on Virgin Australia flights. For bookings, visit www.airnz.com.au and www.virginamerica.com

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