Legacy hotel brands like the Taj Group, the Leela and ITC Hotels are revamping their digital platforms as they seek to acquire more customers directly through their own distribution channels as against offline or third-party travel partners.

Industry experts said branded hotel chains are focusing on activating their own digital channels as it is not only cost-effective, but also helps them keep a tab on their loyal customers and enables them to control and manage their inventories better.
Both Taj Group and the Leela are working on relaunching their brand websites with a focus on making them more interactive and with better payment gateways. They are also planning to launch mobile apps for most of their loyalty programmes in the next few weeks.
“The reason behind our push for direct bookings through our own channel of websites or mobile phones is clearly the cost of doing business,” said Deepak Khullar, vice-president, sales and marketing, the Leela Palaces, Hotels and Resorts.
Experts said online travel agents (OTAs) charge hotels around 10-35% as commission for every booking done through them. As per estimates by global travel research firm Phocuswright, about two-thirds of the total online hotel bookings in India are estimated to be done through OTAs.
A recent ICRA report said though OTAs are a boon to the hotel industry, the high commissions charged by them are impacting the profit margins of hotels. The rating agency had suggested that hotels have to eventually focus on drawing more customers to their own websites as it can lower cost of customer acquisition.
Khullar said direct bookings help save on the commissions that the company pays for bookings through OTAs and also enables it to build a community of loyal guests. The company said the new website would reflect an e-commerce-oriented approach. Besides, it is also building mobile websites and apps in order to tap the growing shift of booking hotels on cell phones as compared to desktops.
Similar initiatives have also been lined up by the Taj Group. Last month, it relaunched its loyalty programme Taj InnerCircle, accompanied with a new website. It is currently planning to launch a mobile app shortly for its loyalty members.
“We are experiencing high double-digit growth in our web and mobile traffic. While the traditional offline channels still constitute the majority of our business, we see this balance shifting soon (and it already has in some of our markets and locations),” said Chinmai Sharma, chief revenue officer, Taj Group of Hotels.
The company is also planning to increase its distribution reach by connecting with meta search aggregators to drive more business through its brand websites.
Meta search aggregators are travel portals that act as search engines for various hotels.
Most of the luxury hotel chains are grappling with heavy losses and distressed assets in the past few years. While the Leela posted a net loss of Rs.415.84 crore for the year ended March 2015, Taj Group’s net loss for the same period stood at Rs.378.10 crore. For the same financial year, EIH Ltd, which runs Oberoi and Trident brand of hotels, posted a net profit of Rs.63.1 crore, a 41% decline from the previous year.
As per a 16 July report in The Economic Times, direct online bookings of Oberoi hotels grew by 30%, saving Rs.3 crore in commission. Cutting down on the distribution cost has helped it maintain its profitablity, it said.
ITC Hotels also said it will continue to strengthen its mobile assets like mobile website and applications while enhancing its presence in the social media.
“The organization constantly strives towards delivering incremental value to our online guests via our branded digital assets, towards making them the preferred reservation channels for our online consumers,” said B. Hariharan, vice-president, marketing, ITC Hotels.
Experts say hotels are realising that it makes better business sense to invest on direct online bookings and there is higher revenue potential in the space.
“Outsourcing to the third-party online partner has a cost attached to it which they can definitely save by doing it on their own. It also gives better control on how to manage inventories,” said P.R. Srinivas, director, hospitality, Cushman & Wakefield India, a real estate consultancy.
Chetan Kapoor, a research analyst at Phocuswright, said such initiatives by high-end hotels to strengthen their own digital platforms will help differentiate their brands from the clutter of travel sites.

Source: http://www.livemint.com/Companies/1BoW3WsEWWWWab7j3nSbzO/Hotel-chains-make-digital-push-in-a-bid-to-cut-out-online-ag.html