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Could This Be An End to OTA Commissions?
Aug 14, 12 | 12:05 am
By Jitendra Jain
An exclusive Hotelemarketer.com interview with Michal Wrobel, one of the co-founders of Treovi, a recently launched hotel distribution initiative that is causing industry buzz with a unique value proposition for hoteliers...an end to OTA commissions!
[JJ] Treovi has been actively driving buzz in the industry with its promise to eliminate OTA booking fees...can you tell us a little more about your project and what hoteliers and consumers can expect?
[Michal] At Treovi, we believe a disruption was needed in the hotel reservation industry. I think the first question we have to ask ourselves, is: what is the main driver of OTAs? It is the commission system, which is related to a business model that has absolutely nothing to do with web 2.0 and Internet today. OTAs simply used the system that applied to physical travel agents and put it online. Similar happened for classified ads. Now, users can place their ads online for free... same change should have happened in hospitality online. It didn't. In fact, it even got worse, the position of OTAs is now more and more controversial regarding the tools they use to drive bookings. We can't really blame them, this is business, although some of the methods they use made hoteliers feel as being hostages of a system they are fed up with. Currently, online products and services available to the travel industry are deliberately reinforcing the old commissions system. We believe it has to change, and one simply can't do it without disrupting the whole business model. This is what Treovi is about. Hoteliers are able to sell their room nights for free. Forever. We provide them with a fantastic "extranet" interface - we call it hotelier admin panel. We also provide something called "Treovi Hotel Profile" to which a hotel can setup a custom URL in the form treovi.com/hotelname (where hotelname is the chosen by the hotelier), and on which you can book directly a room, without using our search feature. Consumers can expect great interfaces, social media integration, and a lot of surprises. I will come back to that later. Upcoming soon are the mobile app and optional products and services, based on a freemium model.
[JJ] Treovi is a curious name...is there a story behind the choice?
[Michal] It is original and it relates to travel, doesn't it? There is no particular story behind the choice, but to us it sounds better than bookhotelrooms, traveltohotels, hoteltrip, and similar, which are really generic.
[JJ] So what does the Treovi team look like and how did you come up with the idea? What is your vision for the project?
[Michal] Treovi was founded by four people. All of us are specialized in different areas: design, marketing, coding and programming, strategy and new markets entry, finance and hospitality. I think that answers the question how we came up with the idea. Anyone from the hospitality industry is aware of problems with the commission-based model, and thought at least once "what if selling rooms could be free?" We have a long-term vision, but of course it depends on how fast we will be scaling hotels. We are also focused on mobile travel, as it becomes increasingly important each year.
[JJ] Going commission-free and not passing along the cost to the consumer will mean you'll need to monetize in some way down the road...does this mean that while hotels won't pay commissions, they'll end up paying indirect costs like on-site PPC, display advertising and sponsorship in a bid for visibility?
[Michal] You made some right guesses there. We are going to introduce services that will be based on what you have mentioned, but not exclusively. Although one very important thing has to be highlighted here: all services will be optional. If a hotel doesn't want to use them, it will be able to sell its room nights for free, forever. We are going to introduce also several optional products, that we believe will change the way users reserve hotels online - and that will make them save money. We believe many new possibilities will appear from the moment hotels don't have to pay commissions on room nights.
Source: Hotelemarketer.com - The Hotel Internet Marketing Blog - visit the blog to learn, collaborate and share your own thoughts on the digital hospitality revolution.
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