In a rather predictable move, multiple OTAs have blocked the budget hotel startups from listing on their respective websites. Sources have reported that Goibibo, MakeMyTrip and Yatra have blocked them and according to industry experts,the move is clearly aimed at safeguarding the OTA market share. With the kind of response & inventory volumes players like OYO Rooms and ZO Rooms are getting, they are clearly a threat to the hotel side of OTA business.
With heavy investors backing these budget hotel startups, they were taking burn to acquire new customers and were listing on OTAs at prices lower than original listed price of the same hotel. It is in order to acquire new customers and keep them coming back to the brand. This could have become a major threat in future as these brand could be controlling a large part of the OTA inventory by adding more partner hotels as they grow.
According to a news report by Economic Times, a MakeMyTrip spokesperson has acknowledged the same and has termed it to be a part of the ongoing experiments at the company. Cleartrip still lists these hotels and hasn’t been in any news around this development. The budget hotel aggregators must have seen it coming as Goibibo earlier caused some friction in listing their properties and made the process of listing relatively cumbersome. This was before they launched their own brand of budget hotels called GoStays. Yatra also launched their own brand of budget hotels under TG Rooms. Listing the rivals would also create competition for these brands.
According to the budget hotel brands, this move by OTAs won’t have any significant impact as the OTAs have been accounting for around 10-15% of their bookings. While these numbers appear to be a little optimistic to believe, it is clear that they won’t sit back and wait. Soon after this update, ZO Rooms introduced their festive offer with some really good hotels available for INR 99 to drive more direct traffic.
OYO Rooms recently raised fresh round of $100 million and has been using these funds to actively expand its network across multiple Indian cities and claim to be present in more than 100 cities. The other big player in this space, ZO Rooms, is present in more than 50 cities.
The budget hotel segment has certainly dominated the travel industry conversations for most part of 2015. With all the offers coming your way, this is perhaps a great time to plan your trips.
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