Hoteliers are holding out in the continued fight to lower OTA commission rates and bring more business in house, and representatives from both sides met during the first day of the Hotel Data Conference to debate distribution.
The conversation that concluded the first day at the Hotel Data Conference was always civil, but there was a tinge of feistiness when the topic turned to the topic of online travel agencies.
Panelists participated in mock-debate style during the “Red, white and brew debate: Dissecting distribution decisions and dilemmas” session, and the two hoteliers on stage— Bharat Patel, chairman and CEO of Sun Development & Management Corporation; and Doug Browne, president of Peabody Hotels & Resorts—were asked to specify their distribution booking mix and cost. Both executives hedged on exact figures, but agreed their companies paid too much to the OTAs.
“The (global distribution system) is the most expensive channel there is,” Patel said.
Patel climbed on stage wearing a large Donald Trump mask and hoisted a sign that said “Make hotel owners great again!” During the debate, Patel said the distribution issue keeps changing.
“The whole landscape has been analyzed as to what the cost is today and where it is going, and that is 25% or even 30%,” he said. “As the world has become more digital, commission and costs have gone up.”
Browne agreed that the distribution landscape isn’t as symbiotic as it used to be.
“Guests come in from so many different angles, but there’s a feeling among us that there’s a disparity on OTA costs between companies,” he said. “When I think back to when I was a kid, there was a love-hate relationship with travel agencies, but their commission was either 10% or 15%. With the OTAs, the costs are hard to get your arms around.”