AAHOA's challenge to OTAs

The Asian American Hotel Owners Association can expect an uphill climb when it takes on the online travel agencies at their own game.

C.K. Patel, AAHOA’s chairman, mentioned during a panel at this week’s International Hotel/Motel & Restaurant Show in New York the association will launch an OTA of its own to compete with the likes of Expedia, Travelocity, Priceline and others. Patel said the platform would be up and running by June but didn’t want to give any of the other details. Details will be announced during AAHOA’s annual conference June 15-18 in Las Vegas. Calls and emails to a few other AAHOA members that I use as contacts were fruitless as they declined to provide any details.

Regardless of the details, it’s a gutsy move by AAHOA. Because the association’s members control about one quarter of the 4.8 million hotel rooms in the United States, there is some credibility to the AAHOA OTA idea.

But it’s not going to be easy to make an impact for several reasons:

• Start with the billions of dollars of marketing funds mainstream OTAs pump into branding each year. AAHOA doesn’t have deep enough pockets to be anything more than a blip on the radar of online hotel marketing.

• Many of AAHOA’s member properties are branded. That means the hotels must live up to corporate level agreements for providing room inventory to the current OTAs. If AAHOA’s trying to simply get a piece of the pie rather than put current OTAs out of business, it will work fine.

• Like any organization, AAHOA has different factions and there are power struggles. My sources tell me the idea of an AAHOA OTA is not dividing the association, but there are some members who aren’t fond of the idea.

All in all, it’s good to see an entity from within the hotel industry try to regain some control over room inventory. The OTAs are not all bad—their purpose of selling more hotel rooms is a good one. However, a lot of their advertising portrays hotel owners and operators as untrustworthy souls who are out to screw everyone. In the 15 years I’ve been covering the industry, I haven’t seen more than a handful of those types of owners.

The OTAs only sell inventory that has been approved by hotels. And yes, despite adamant pleas from the third-party providers, they do twist arms to ensure owners provide inventory at a certain price point.

The hotel brands have yet to stand up and grab control of room inventory on their licensees’ behalves, so it’s up to associations such as AAHOA to make an attempt. I’m not entirely optimistic they will succeed, but I’m rooting for them to help bring balance back to room distribution.