OTAs, new entrants dominate talk of hotel distribution
OTAs, new entrants dominate talk of hotel distribution
06 JULY 2018 7:29 AM

This roundup of content features articles focused on the changing distribution landscape and its effect on the hotel industry in the last six months.

REPORT FROM THE U.S.—The world of hotel distribution is a hot topic in the industry, and it’s a discussion that’s always evolving.

Hotel News Now has covered a variety of angles on the topic of distribution, including the pros and cons of listing on alternative-accommodation sites to the integration of loyalty platforms at companies such as Marriott International.

Here’s a look at some of HNN’s distribution stories that have published within the last six months.

Panelists speaking on a panel at the HSMAI Revenue Optimization Conference said the hotel distribution universe is in a period of transition, and technology will influence how hotels think about distribution going forward.

Lew Harasymiw, director of distribution strategy and connectivity for InterContinental Hotels Group, said it is critical for a company like his to invest in distribution technology, adding that many hoteliers “still function on spreadsheets.”

“We have this conversation every year, yet some still continue to use spreadsheets. … Now it’s about how we move to the next level,” he said.

As online travel agencies continue to grow, new entrants are coming into the wide world of distribution. A few experts provided tips for sorting through the crowed distribution landscape.

Sloan Dean, COO of Remington Hotels and a former revenue manager himself, said the so-called “duopoly” of Expedia Group and Booking Holdings has had a big effect on hotels.

“The consolidation is raising big concerns in the industry, and there needs to be further regulation to eliminate deceptive practices and inform customers,” he said. “The (Federal Trade Commission) needs to do more.”

There are a wide array of third-party intermediaries such as online travel agencies, global distribution systems and metasearch engines in the world of distribution. Hotel News Now compiled an infographic of the biggest players in online hotel distribution.

The top OTAs include Booking Holdings, Expedia Group and Airbnb. Amadeus, Sabre, Travelport and TravelSky make up the global distribution systems category, and Google, TripAdvisor and a few others occupy the metasearch space.

Airbnb is now open to boutique hotels to list guestrooms on the platform, and there are a few pros and cons that come along with this.

The Guesthouse Hotel in Chicago has been listing on Airbnb for years, as the property has undergone changes over the years, transforming from vacation rental properties with a hotel attached to it to just a hotel, according to Daniel Cauley, a revenue manager at the hotel.

The hotel has seen success in posting on Airbnb, Cauley said, but revenue “is more of a supplement than a driving factor.”

“It’s an inexpensive way to get bookings versus Booking.com or Expedia or other players,” he said. “And it has a pretty strong following among the people who use Airbnb, but I still view it as a niche market. A lot of people are just not going to book (a hotel) on Airbnb.”

The process of transforming a branded property into an independent hotel is not an easy task, and there are several risks associated with the process, including working with OTAs to keep occupancy high at a new independent property.

Raymond Martz, EVP and CFO of Pebblebrook Hotel Trust, said branded hotels moving to an independent will have to work with the OTAs, but that’s not necessarily a bad thing.

“We don’t paint them as a big, bad villain … they’re certainly an expensive channel, but they have their place in the world,” Martz said.

One thing to keep in mind is that a new hotel on a channel like TripAdvisor will take a while to show up on the first few pages of the website, Martz said.

“You go through a period of not only do you have a new hotel that no one knows (about), but now it’s not even on TripAdvisor … it may take a few months for it to appear back to where it was,” he said.

It’s been a long road to unifying loyalty platforms since Marriott acquired Starwood Hotels & Resorts, but Marriott officials said the company is getting closer to the unveiling of a wholly unified loyalty platform.

Marriott President and CEO Arne Sorenson sat down with Hotel News Now in March for a video interview to talk a bit about the joint loyalty platform.

“Obviously, we’ve got three communities we want to make sure we’re focused on: the guests being the most important, but we’ve got our hotel owners, as well, and of course Marriott’s own involvement in this program,” he said. “What we think we can do is deliver even more value to our guests.”

The biggest challenges for hoteliers in the industry are the pace of change and the need to do it all, according to online marketing, e-commerce and distribution expert Tim Peter. Instead of trying to accomplish everything, Peter said hoteliers should focus on differentiating their properties from OTAs and the competition across the street.

“Because of the overwhelming choices available to guests on the internet, the only ways you can win are either to get big—provide the widest number of choices—or truly differentiate themselves from the pack—provide the best choice. Differentiation isn’t simply trying to be a little different; it’s about finding those differences your guests will demand and be willing to pay extra for. Expedia, Priceline, Marriott and Accor, among others, have gone the ‘get big’ route. Individual hotels either need to join them or focus their efforts entirely on the second.”

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