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Forbes
4 days ago
- Business
- Forbes
Why Should Hotels Think Like Retailers And OTAs Like Media Companies
Sanjay Ghare, Founder & CEO, Vervotech (A Constellation Inc. company), Investor in Travel startups. Hotels and online travel agencies (OTAs) have for long remained in a traditional mold, with hotels offering rooms and OTAs helping them sell these rooms. But now, as travel has become increasingly digital and consumer-driven, traditional roles need to take a back seat. In my opinion, rethinking their roles through a commercial lens could help hotels and OTAs drive more loyalty and increase customer lifetime value (CLTV) as traveler journeys become more nonlinear and highly content-influenced. Let me take you through my thoughts in greater detail. The Need To Move Beyond Transactions Earlier last month, I had the opportunity to visit a beautiful property situated on the highest hill in Tamil Nadu, India. While the hotel offered spectacular views and recreational spaces, it did not significantly enhance my overall experience. Despite everything being functional, nothing felt curated or polished. I was hoping for a more local experience, more personal touches and maybe some guides to explore beyond the room. That's when it struck me that even the most stunning properties can fall short of providing a rich experience if they don't consider personalizing the guest experience—or, in simple terms, making it immersive and providing value beyond a luxury suite. All this got me thinking that if hotels thought like retailers and designed personalized journeys, based on traveler preferences and data-driven insights, they could provide a rich experience tailored to their guests' expectations. OTAs are not far behind. Today, with an abundance of automations, APIs, and tools, OTAs have access to traveler insights, and yet most stop at the bookings page. But what if they acted like media companies and engaged travelers with local experiences and culture-rich local content? Take Travelxp, for instance. Travelxp is using AI to connect discovery with action, significantly enhancing the travel experience through automation, personalization and offering everything from binge-worthy shows to personalized holiday packages, flights and hotel bookings. The company has seen a 30% increase in customer retention and a 15% boost in conversion rates for hotel and flight bookings, thanks to AI-driven initiatives. It is no longer enough to think of yourself as the service provider. Borrowing ideas from industries that have nailed the game of winning customer relationships might not be a bad idea. In fact, it might be the best one! Why Should Hoteliers Adopt A Retailer Mindset? What I mean when I say hotels should think like retailers is that they should go beyond offering rooms and focus on building loyal and lasting customer relationships through personalized offers, merchandise and promotions. While many promotional management systems (PMS) already offer these tools for analyzing pricing and demand, the secret to the retailer mindset lies in using them strategically. It's not about simply adjusting prices but aligning the offers with guest preferences—just how a retailer would tailor the storefront to suit every customer. The focus must always be on relevance, not availability. Another aspect is strategically guiding customers through all the services they offer, such as a spa, golf course, restaurant, clay shop and workshops. Think IKEA—how it has nailed the retail experience, making every visit a cherished memory for its customers. When you walk into any IKEA, you walk through the aisles of different corners of a house and the small product placements along the rows. Rooms are decorated like a movie set, with arrows lining the floors directing customers through a maze of product displays, guiding them to cover more ground and showcasing how the products would look in their own homes. You don't have to think—IKEA does it for you. You may think that you don't want to spend $100 on a Japanese-inspired kitchen counter, but hey, you can get a knife block priced at $10. And that's how IKEA makes sure you never walk out empty-handed. Personalization is the driving force behind an excellent customer experience. Like retailers, hoteliers can leverage this approach by analyzing the guest journey from hotel search to post-stay feedback. They can identify pain points to craft tailored packages and promotions that include targeted emails based on guest preferences, loyalty points based on booking history, luxury add-ons, discounts for longer stays and other personalized offerings. OTAs Have The Audience, Now They Need To Tell Better Stories Media companies have some of the most loyal followings, thanks to content that resonates with their audiences. OTAs can do this too! For instance, they can create curated travel guides for different types of travelers, such as solo travelers, couples, parents with toddlers, teenagers or groups of friends. They can showcase unique destinations and feature stories about local, guided experiences. Apart from content curation, OTAs can foster online traveler communities and traveler forums. The goal is to engage in travel discussions and increase visibility, brand awareness and, ultimately, brand loyalty. Like streaming platforms that leverage data analytics to recommend content based on our viewing preferences, OTAs should also dig into traveler analytics to personalize recommendations for destinations, budgeted accommodations or travel activities. It can also involve rewarding loyal customers with exclusive deals, discounts and priority access to new travel offers. The focus should always be on bridging the gap between travelers and their perceptions of you as a service provider. Actively engaging with your audience on social media platforms via polls, quizzes, contests and travel stories can help position your brand as a contributor to the community and foster a sense of belonging with your brand. The Lines Are Blurring—And That's Not A Bad Thing In an industry where the real value is placed not on transactions but on experience, rethinking traditional roles can make all the difference. Hotels that add value to guest experiences through tailored offerings can go from a one-time stay to a repeat preference over time. OTAs that inspire, inform and build relevance before the traveler even starts planning their travels can become more than just booking platforms. As the concept of travel evolves with time, only brands that blur boundaries, experiment and stay relevant will stand out. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
Forbes
27-06-2025
- Business
- Forbes
India's Hotel Dream: Why Tech And Demand Are Driving The Story
Sanjay Ghare, Founder & CEO, Vervotech (A Constellation Inc. company), Investor in Travel startups. From my experience, having observed the global travel industry for decades, I can say that India's hospitality sector is not just experiencing growth—it is demonstrating an upward trajectory whose base was prepared by many stakeholders. This story has many heroes; I'll discuss each in greater detail. Before I move to that, the reality of the day is that India's accommodation industry is expected to reach an INR 1 trillion valuation ($11.7 billion) by the end of this financial year, with projections extending to INR 1.1 trillion ($13 billion) by 2026-27, supported by a CAGR of 10.5%. This trajectory is not accidental. It is a cumulative outcome of growing domestic demand, conscious effort from the government and an obvious tech ecosystem in the country that has fundamentally changed the dynamics of the industry. The Demand Story: A Multichannel Push What often remains under the radar in most external analyses is the significant impact of the "New Indian Traveler." Domestic tourism is no longer merely a contributor; it has become the primary contributor, accounting for a substantial 50% of incremental revenue in the hospitality sector. This internal demand base provides a strong resilience, protecting the industry from the volatility of global economic or geopolitical upheavals (wars, sanctions, pandemics, etc.). While international tourist arrivals have also shown a strong recovery, reaching 9.24 million in 2023 (per the latest government data available), the sheer scale of domestic engagement has been the key highlight. Also, the industry's thoughtful diversification into other high-value segments—meetings, incentives, conferences, and exhibitions (MICE), spiritual tourism, and medical travel—has also played a critical role. The MICE sector alone is projected to more than double from $49.4 billion in 2024 to $103.7 billion by 2030. Additionally, India's Medical Value Travel sector, valued at $7.69 billion in 2024, is also attracting millions of foreign patients, with projections indicating a market size of $16.21 billion by 2030. This multi-segment approach ensures the market remains attractive for investments and revenue channels remain fairly stable. 'Ease Of Doing Business' Dividend: The Sovereign Push As I mentioned earlier, the government has consciously tried to create favorable policies. From an investor's perspective, the Indian government's role is no longer just limited to regulation; the industry now sees it as a proactive strategic partner. Over the years, they have cultivated an environment conducive to investment and growth. The policy permitting 100% foreign direct investment (FDI) under the automatic route in the hotel and tourism sector is a clear signal of intent to create a conducive environment for businesses in the industry. The move eases the investment process by removing the requirement for prior government approval, given investments adhere to established regulatory norms. It has been instrumental in attracting capital for infrastructure development and improving service standards to meet global expectations. The Digital Backdrop: The Role Of B2B Solutions And OTAs One part of this growth story that cannot be undermined is the country's sophisticated digital ecosystem that supports the operational efficiency and expansive market reach of India's hotel industry. B2B solutions—including global distribution systems (GDSs), bedbanks, central reservation systems (CRSs), channel managers and mapping solutions—all have played a significant role. These technology players support travel agents, aggregators and tour operators with the centralization of travel content distribution, management of real-time pricing, and automation of complex domestic and cross-border transactions. This digital infrastructure is critical for hotels to manage complex distribution networks and revenue streams. Online travel agencies (OTAs), while often seen through the lens of commission structures, play an undeniable and extremely crucial role in distribution. Without them, this demand can't be realized. Platforms like MakeMyTrip, EaseMyTrip, Cleartrip and Yatra dominate the Indian OTA market. They function as primary "discovery engines" within the travel ecosystem. Obviously, their substantial marketing budgets, which are usually much larger than those of individual hotels, ensure exceptional visibility for hotels on major search engines. The Next Phase: AI, LLMs And Depth The current growth trajectory is definitely impressive, but in my opinion, it is merely a warmup to the next phase, which will be bigger and better and will be defined by intelligent automation and a prominent shift toward conscious travel. While the adoption of advanced AI in the Indian hotel industry remains limited to foundational systems, its transformative potential is yet to emerge. Over the next five years, as I see it today, the industry is poised for a significant deepening of technological integration, with large language models (LLMs) at the center of everything. You can foresee LLM-powered concierge services that predict guest needs, customizing everything from room temperature to dining recommendations based on deeper analysis of past preferences and their real-time behavior. Generative AI will facilitate dynamic content creation at scale for marketing and guest communication, enabling highly customized, personalized guest interactions. All of it together will lay the foundation for the next generation of growth, which will be massive. Conclusion India's hotel industry's growth story thus far is more than a numerical milestone; it is rooted in execution and a well-thought-out strategy to generate sustainable demand. The INR 1 trillion valuation is a telling testament to the effort that has gone into generating robust domestic demand, a strategically enabling and supporting government, and a rapidly evolving technological ecosystem in the country, along with the technology entrepreneurs who have dared to see the big picture. As AI, particularly LLMs, becomes more deeply embedded in the ecosystem, the industry will be open to the next levels of personalization, operational efficiency and sustainability. India is not just a market; it is a compelling case study of how strategic foresight, policy alignment and technological adoption can come together to create magic in terms of demand and growth in any industry. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
