In the last couple of years, hotel chains have gradually tried to wrestle back control over distribution from online travel agents.
Some have been more successful than others, thanks in part to beefed-up loyalty schemes that offer extra incentives for customers to book through their own websites.
There’s a reason hotels want to take back more control. Online travel agencies aren’t necessarily the biggest part of the mix, but they are the most expensive route to market. The dominance of Expedia and Booking.com and their widespread recognition means they can charge pretty much whatever commission levels they want.
If these hotel companies could go back in time, they’d probably do things differently, and would undoubtedly have ceded less control of their distribution to intermediaries.
While the likes of Hilton Worldwide, Marriott International and InterContinental Hotels Group (IHG) have all made a push for more direct bookings, there’s one company whose strategy has left it almost totally unreliant on online travel agents.
Premier Inn, a budget-friendly brand owned by UK conglomerate Whitbread, enjoys industry-leading numbers of direct digital distribution. Researchers at Morgan Stanley found that the brand’s website accounted for 87 percent of all distribution in 2016.
(Whitbread’s most recent figure from its 2016/17 accounts shows a slight increase to 88 percent. But the company also notes that the 88 percent tally includes some reservations from global distribution systems and agents that amount to 7 percent.)
Morgan Stanley also has figures for digital direct booking at the other major hotel groups, and these show just how different Premier Inn’s model is. Hilton (30 percent), Hyatt (25 percent) and IHG (36 percent) are all far lower.
Despite repeated requests, the company declined to make a representative available to talk about the topic. But on a conference call with analysts to coincide with Whitbread’s full-year earnings results in April, Chief Executive Alison Brittain outlined her thinking when it came to distribution.
