One of the most globally talked about topics is the changing hotel distribution landscape and the impact on hotels. This article looks at current trends in distribution, considering the past 20 years developments. The article focuses specifically on the following key areas: customer expectations, high street to online, threat or opportunity?
Customer expectation: direct
Since the dawn of the industry, direct bookings have been the preferred distribution channel. The two main reasons being cost and the direct relationship with the guest. There are no intermediaries, no associated costs, no competition for ownership of the guest relationship and the opportunity to create a direct relationship with the guest encouraging repeat business.
The direct booking channel has always existed, is the most profitable and is potentially the easiest to deliver and fulfil. But how many hoteliers are maximizing the opportunities of this channel?
The late ’90s saw the emergence of the direct hotel booking engine, allowing potential customers to “surf the net” to find the best deal, direct with the property. Customers started hitting dozens of hotel, airline and car hire websites directly attempting to find the best deal and “self-package” their travel experience. It was laborious, but they had choice and control over their decision of where to stay and how much to spend, and they appeared to love it!
Travel agents
Retail travel agents have existed for well over 20 years, well before the wide spread corporate adoption of the internet. Twenty years ago, the distribution landscape was dominated by a small number of global distribution systems (GDS), including Sabre, Amadeus, World Span and Utell. Most GDSs originated from car hire or airline companies proprietary booking systems being extended to allow travel agents to book hotels, car hire and air.
In addition to traditional travel agencies, there were a myriad of intermediaries including wholesalers, airline travel booking agents, bank and credit card membership travel agents, tour operators and affiliate marketing agencies, which all provided booking services for customer niches, and all charging commissions with some as high as 25 per cent and often more than one intermediary in a single booking. Many of these still exist and provide valuable sources of business to specific property types, such as resorts catering to charter, inbound or all-inclusive markets.
There was a brief period between the era of high-street travel agents, GDS and the online travel agents. This was a period of direct online bookings to hotels with low or no commissions.
Travel agents have not disappeared, there have been and continue to be valuable segments that prefer the personal contact of a retail travel agent. It also appears that with the rise of experiential travel through younger generations, that they prefer the personal contact and recommendation of a travel agent. They enjoy the relationship with a professional who can provide first-hand experience on particularly aspects of travel. This is apparent in complicated itineraries and the sensational or memorable aspects of the travel itinerary.
