How Guest Targeting is shifting the OTA landscape

For years, Expedia, Orbitz, and Travelocity have been entrenched OTA players in a static hospitality landscape. With back-end connectivity to the GDS, these OTA giants represented a simple, at-home entry point for many travelers. Over time, aggressive marketing and rate parity have established OTAs as a reliable retail outlet for hotels, airlines, and rental cars.

But in the past 18 months, a seismic shift has begun to change the landscape for the online travel agencies. Foreshadowed by Google's 2010 acquisition of ITA Software, the rise of "big-data" represents the greatest challenge to OTAs in more than a decade Click to Tweet and is beginning to change the landscape for many of the largest online travel agencies.

Armed with data on preferences, interests and even search histories, big-data providers like Facebook and Google have built platforms by which hoteliers can offer highly targeted packages and promotions to small groups of retail travelers. The result looks to net higher conversions at a lower cost of sale for hoteliers, all while delivering a more satisfying retail experience for guests.

This shifting landscape could bring the eventual downfall of the parity-based model for OTAs. Just this week, Expedia CEO Dara Khosrowshahi confirmed to CNBC's "Squawk Box" show that Expedia is looking for ways to shift its offering to hoteliers away from parity towards a guest-targeting model. (Note: Khosrowshahi's comments about Expedia's future model begin at 2:20 into the video.)

In my opinion, the biggest challenge OTAs face in delivering a targeted guest model is the access to a larger guest dataset. While Expedia, Travelocity, and Orbitz capture travel search data, the legacy OTAs lack access to broader preferences that are game-changers for the big-data companies. OTAs will likely need to purchase guest data directly from their new competitors, Facebook and Google, Click to Tweet which will drive down profit and make the challenge even more pressing.

I believe that the pressure to build a more profitable, guest-targeted model may drive OTA consolidation. It's also quite possible that we will see the larger OTAs pursue big-data through acquisition of social media properties such as Pinterest or Gogobot.

Does this mean that Expedia, Travelocity, and Orbitz are about to fold up shop? Not at all. Although consolidation within OTAs is possible, the likely path for OTAs will be less emphasis on non-targeted results through the GDS and more focus on generating guest-targeted offerings at a higher margin.

How to Convert Social Media Followers to Buyers

Since the rocket-like launches of Twitter, Facebook, and Pinterest years ago, organizations have been asking the million dollar question in regards to social media, "How can we convert fans into buyers?"

Social MediaCountless books, seminars, blogs have been devoted to the topic of social media ROI, but (sadly) most seem to miss the most obvious point.

While I don't proclaim to have all of the answers, the answer to the question of converting social media followers to customers seems a rather obvious one:  The same way you converted your existing customers.  

From my perspective, there's too much status placed on 'fans' and 'fan counts' by most social media "experts". The people who "like" your brand are essentially giving your company a virtual high five. Click to Tweet They appreciate something you've done or a perception you've created about your products. They may or may not be your current customers. And – unless you work to convert your followers into buyer – they may or may not be your future customers.

In a traditional sense, your Facebook fans and Twitter followers are the digital equivalent of window shoppers. Click to Tweet Some of them know your brand well, they enjoy your products  and actively share their experiences with their friends.

But some  of your fans – a large majority – are standing on the sidewalk.  They like your window display, but it hasn't compelled them to open the door and try your brand. And this is where your business acumen and experience – more so than your social networking skills – come into play.

Social media is a tool for increasing your sales, not the solution. Click to Tweet

So ask yourself and your team: What do you do as a brand that brings potential customers in off the sidewalk?

If you can answer that question, then you can convert social media followers into buyers.