Lodging Recovery: 4 Years Away, OTAs vs. Suppliers, Google vs. TripA and Other Good Discussions

Check out the blog over at uptake.com for some good thought-provoking discussions following the PhoCusWright conference down in Orlando.

Yen does a nice job of explaining Bill Carroll, Chris Anderson and Jake Fuller's analysis of the lodging cycle and the opportunities for the OTAs. In a nutshell, look for another 4 years of pain for hoteliers and substantial continued opportunities for OTAs.

Solid musings on the potential GDS IPOs along with HomeAway, Kayak and ITA - should be a big year in travel IPOs

And what would a travel discussion be without thoughts on google and tripadvisor?

Catch all the details here including my thoughts on OTA vs. supplier.com innovation and growth. The reply below is in response to Yen's thoughts around the growth of OTAs during the last economic blip - good supply helps but innovation is critical as well:

I think the question is as much around supply vs. demand as it is innovation vs. the lack of it. Hotels.com and Expedia built their businesses just as much around great pricing as they did around great websites, content and functionality. The chains and airlines fought back and brought their sites (somewhat anyway) up to snuff. But, particularly for airlines, they have relied on booking fees charged by the OTAs as a crutch to create differentiation. With those fees now moot, is it any wonder why consumers, for the same price, aren’t booking where a better booking experience happens – the OTAs? No wonder OTA air segments are way up – which obviously feeds the hotel and car lines of business. The innovation pendulum has swung squarely to the OTAs from the suppliers. Just look at Orbitz Price Assurance for air and hotel or Travelocity’s Guarantee or Expedia’s packaging product to see how the OTAs are changing the game. The suppliers are nowhere in these customer friendly areas. Will the airlines fight back with more negatives (as they are sooo prone to do) by restricting seat assignments or frequent flyer mileage accumulation to their own websites? (Remember when hoteliers did this?) Or will they match the innovation of the OTAs and really attempt to compete? We’ll see next year."

Opentable.com: No reservations for the IPO or reservations about an IPO?

On Friday, Opentable.com issued a press release indicated that they had filed for an IPO. Apparently not daunted by the current financial malaise, Opentable wants to go public.

While we applaud them for their fortitude, it seems a curious time for such a bold move given not only the current situation in the financial markets but also the state of the restaurant business.

Restaurants are hardly in an expansion mode - just in New York City alone, we see a lot more restaurants closing than opening. Stories abound of restaurants reducing menu prices: value meals are the latest fad at four and five star restaurants in NYC as the economy continues to sag and consumers cut back on spending. This is going way deeper than just Bennigans closing down.

If restaurants really believe that Opentable can actually drive incremental demand (the oldest line in the travel industry, by the way) then maybe there is hope that participation drives customers faster than it drives costs.

And what about growth prospects beyond just adding more restaurants in existing markets? The only business more fragmented than the hotel industry has to be the restaurant industry. So, every new market that Opentable expands to requires feet on the street explaining the model and getting restaurants to sign up. And just how far down the food chain can Opentable go? Does a Friday's in Grand Junction (where I involuntarily ate last week) really need to be on Opentable? I doubt that people in Grand Junction are clamoring for online reservations...

So, in a down economy, with less people eating out (and therefor using Opentable) and less restaurants taking reservations (they pay a fee to Opentable) is this really the time for an IPO? We bet there wont be many reservations for that table.