Can virtual reality and 360° technology help hotel chains compete with online travel agencies?

Online travel agencies (OTAs) like Priceline and Expedia are facing a backlash from large hotel chains over their growing market share and steep commission fees. In a battle waged primarily online, traditional hospitality companies like Hyatt Hotels, Marriot International, and Hilton Worldwide are trying to reclaim business from the OTAs through wide-reaching marketing campaigns promoting loyalty programs, exclusive discount rates and deals, free Wi-Fi, and other perks and bonuses. Now, virtual reality marketing agencies think they can help.

OTAs have become a go-to resource for young travellers in particular: more than half of 18- to 34-year-old Americans prefer search engines to branded hotel websites, and they are generally less likely to participate in a rewards program. Millennials are also drawn to third-party sites’ range of date and location options, as well as the ability to package hotel stays with car rentals and air travel.

Led by Expedia and Priceline, OTAs drove almost $100-billion in global hotel bookings in 2016, the first year OTA bookings surpassed gross bookings through hotel websites. According to estimates from Kalibri Labs, OTA commission fees cost the American hotel industry roughly $4.5-billion between June 2015 and June 2016.

“The tension between OTAs and hotels is increasing because the OTAs have been growing market share,” Cowen analyst Kevin Kopelman told the New York Post. “Over the past 18 months, the OTAs have increased their market share significantly.”

Will the hotel chains’ marketing emphasis on value and service be enough to effectively ward off the OTAs’ challenge? Or will a new, innovative approach to attracting customers be necessary? Virtual reality marketing agencies believe they have the answer…

Digital marketing professionals live by the mantra “Content is King.” This basically means that great content – written, video, or otherwise – should be central to businesses’ online marketing efforts. If you produce content that is useful, engaging, and relevant, the thinking goes, users will be more likely to visit, return to, and convert on your website.

Forward thinking hoteliers, with the help of virtual reality marketing agencies, have already begun to leverage 360° and virtual reality technology to offer unique marketing experiences that OTAs aren’t able to reproduce. In particular, 360° videos and 360° three-dimensional virtual reality (360°/3D/VR) tours give customers a chance to explore, get comfortable with, and gain an intimate understanding of hotels’ lodgings and amenities.

360° videos have a significant advantage over traditional marketing campaigns: they allow audiences to experience and form lasting emotional connections with places, products and services. In the hospitality context, hoteliers can offer travelers a brief, immersive look at the atmosphere and facilities that make their location unique.

A 360°/3D/VR tour, meanwhile, is a complete, three-dimensional representation of a real world space in a digital environment. These experiences are generally produced with the help of a 3D camera that maps and reproduces spaces in astonishing detail. Users can explore the space by navigating from hot-spot to hot-spot on desktop or mobile devices, or in a virtual reality headset. There is no better way for a potential customer to explore a space and make an informed decision than with the help of a 360°/3D/VR tour.

These immersive experiences require a level of familiarity with and access to hotels that OTAs simply don’t have. For all the filters and search options that Expedia or Priceline may provide, they can’t offer the intimate knowledge that brand websites inherently possess.

Immersive experiences are also fun! Young people, the very same group that has taken to OTAs above brand websites, are among the web’s most discerning content consumers. Immersive, 360° experiences are fresh, forward-thinking, and memorable – which is exactly why virtual reality marketing agencies believe they can draw traffic away from well-established online travel agencies.



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