The Phocuswright Conference 2019 preview - Hospitality in a perfect storm

Hotels and online travel agencies had lived in an often tense but fairly useful equilibrium with one another for many years.

Chains and independents secured bookings either by their direct efforts online and from loyal, returning customers or paid their commissions to OTAs to do their marketing efforts for them.

Sure, there were routine spats - some public, most private - between OTAs and their hotel customers over fees and contract terms, but the relationship of happy coexistence largely worked when rooms were filled and the market was growing at a level to support the ecosystem.

Elsewhere in the hospitality world, private accommodation was mostly a business that operated on the sidelines of the market, pioneered by the timeshare operators from decades ago and brands such as HomeAway (now Vrbo) and its kin.

Enter, a decade ago, Airbnb and now countless other brands that operate as marketplaces for travelers to find alternative lodging options and the wider hospitality world wakes up to both the opportunity and the threat.

Many chains have, as we know, understood that travelers simply want more options before them.

Accor bought into the private accommodation concept with a number of acquisitions (OneFineStay, for example) and Marriott followed suit.

Their friends/enemies in the online travel agency world have also followed suit - Expedia Group bought HomeAway for $3.9 billion in 2015 and Booking.com has an ongoing and considerable strategy to throw in as much private accommodation as it can muster.

These various strategies are playing out in real-time and could work for each participant. The traveling population, both leisure and business, remains huge and growing, not least with the rapid growth in the number of guests exploring the world for the first (or second or third) time from markets such as China.

But, inevitably, there is a lot more to contend with.

The extraordinarily well-funded OYO, despite the ongoing questions that surround it, is hell-bent on the expansion of its franchise model on a global scale and also wants to get a piece of action in private accommodation.

This emerging player's ambitions are running alongside that of Airbnb, which has evolved its own business to target hotels and no longer be seen as that market's enemy but, instead, go head-to-head with the OTAs.

It's an ecosystem that is not for the faint-hearted.

But what about the traveler? Lest we forget, guests and their booking habits and the expectations they have for accommodation are changing at the same rate (perhaps even faster) than the hospitality industry they support.

Technology, as ever, underpins this evolutionary shift in consumer behavior.

System vendors, whether they be distribution partners or guest service providers, are grappling with a sea change that is perhaps not yet really fully realized.

Personalization is a key component of this (a report from Amadeus earlier this year is a useful benchmarking tool of what the industry should expect), yet so much else - check-in services, retailing of ancillary products, etc. - is developing quickly.

Anyone who thought the hospitality sector was immune from fundamental change should think again.