Pros and Cons for Preseentation

Pros

Cons

1. Restores the direct relationship with customers and puts Accor back in control of both pricing and their customer relationship
2. Reduced dependence on OTAs, which have high fees and cause disconnection from customers
3. OTAs cost the hospitality industry close to $3 billion each year
4. Disturbs the e-commerce in the hospitality industry and intercept Accor’s customers between searching and booking
5. Cannot 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 run
6. Customers 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 fees

1. Room Key is a risky initiative. The equity investment would use a significant portion of the marketing budget.
2. Accor would incur additional costs to develop new online infrastructure to communicate with individual properties, and to change its marketing messages to consumers
3. The 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 selling
4. Online travel agencies attract consumers because they spend big chunks of the revenue on mass-market advertising

• OTAs compete to show consumers what they want as quickly as possible. Consequently, they provide a better booking experience.

1. 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.
2. Low margins + Low Volume = Low Profitability
3. Charging lower fees = Less revenue earned