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Source: Thailand Hotel News  Sep 19, 2019

Asia OTA Market Gears Up For War With Bidroom No Commission Entry

Asia OTA Market Gears Up For War With Bidroom No Commission Entry
Source: Thailand Hotel News  Sep 19, 2019
No-commission membership-based hotel booking platform,Bidroom is launching its services within the Asia Pacific region within the next few months via an aggressive campaign of signing up Asian hotels  as hotel partners that will be linked to their fast growing and multiple-award winning online travel platform.

Launched in 2014 in the Netherlands, Bidroom currently offers 125,000 hotel properties in 128 countries. For the past five years, Bidroom has focused on building its hotel stock in Europe and North America but has now decided to focus on the Asia Pacific market.

Michael Ros COO and co-founder of Bidroom commented in an interview with Thailand Hotel News “Bidroom works as an annual membership model, whereby hotels only pay a contribution after proven success.This substantial saving is shared with the online frequent traveller who will subsequently be paying a guaranteed lowest-available price. Bidroom is demonstrably cheaper than all known online travel agencies (OTAs). The result is also a significant margin of financial improvement for hoteliers.”

Hotel industry analysts say that smaller hotels can rely on OTAs for up to 85% of their bookings but at commission rates of up to 28%. Heavily-capitalised OTAs control the online hotel room market because they spend heavily on search terms. There is also often an illusion of online competition in the online marketplace. Expedia, for example, owns around 12 OTA brands while Priceline Group owns, Agoda, Ctrip, and, among others.

There are an estimated 5 million hotel rooms in Asia Pacific and, according to STR, the region has 471,000 new rooms under construction, a year-on-year increase of 28%. Hotel profits are already under pressure in Asia and Pacific destinations with new openings in arguably oversupplied destinations such as Thailand, Vietnam, Indonesia and Maldives. Reducing OTA commissions is therefore vital to hotel viability.

While online travel will continue its massive expansion, especially in Asia, the honeymoon period with OTAs using manipulative techniques is ending soon.Bidroom stands apart as a more profitable and fair-minded booking solution for hotels in the region.
Hotels and consumers are also getting more cautious about online OTAs with the closure and collapse of Amoma last week that resulted in thousands of hotels not being paid and tons more of consumers trying to get refunded for their paid in advance bookings. Many business models of OTAs are also being questioned along with the fact that many hoteliers are getting squeezed badly in the pricing game. Bidroom might actually turn out to be a savior for hotels in Asia where there is already an oversupply coupled with an extremely competitive priced market.