5 Key Trends In Hotel Distribution

　　The rapidly evolving distribution landscape emerged as a focal point during a panel at September’s Annual Conference for the International Society of Hospitality Consultants.

　　During the conference, John Burns of Hospitality Technology Consulting shared five key trends every hotelier should keep an eye on.

　　1. OTAs shifting strategies

　　“The online travel agencies continue to be quick adapters. There were quick to adopt opaque technology. They’re equally quick to adopt flash sales,” Burns said.

　　Now they’re adapting quickly to an agency model, in which guests can pay upon check-out at the property as opposed to upfront via the OTA.

　　This agency-model approach was heralded by Booking.com, which saw tremendous success in Europe and has begun infiltrating the U.S. market, Burns said. Powerhouse Expedia was the first major U.S. player to respond through its Traveler Preference program, which allows customer to choose between the agency (pay at check-out) or merchant model (pay up front). /Articles.aspx/8871/Sources-predict-quick-adoption-of-agency-model

　　“It’s going to be an interesting journey to see its acceptance,” he said.

　　2. Commission and condition control

　　Hoteliers have begun to rein in outlandish commissions and conditions in their contracts with OTAs, Burns said.

　　Most brand agreements are seeing commissions below 15%, while most independent hoteliers are paying commissions of 20%. This marks significant reductions from the past years, where commissions have hovered northward of 25%, Burns said.

　　Are hoteliers in the clear yet? Not quite, he added.

　　“OTAs continue to be very good businesspeople. They recognize the hotel community’s vulnerability during down times,” he said, adding that’s when they come for contracts, preferred access to inventory and multi-year arrangements.

　　OTA representatives also try to skirt the staunch hand of brand management by negotiating directly at the property level, where owners and operators might not be as informed, Burns said.

　　“We were in many cases to congenial,” he said. “In dealing with OTAs, sometimes we just have to say ‘no.’”

　　3. Possible end to rate parity

　　Initiated by the hotel industry, rate parity initially was seen as a way to ensure the brand.com booking channel wasn’t undermined by discounted third-party platforms, Burns said. But OTAs co-opted the strategy as a way to ensure rates on brand.com could not be the lowest either, thus ensuring an even playing field.

　　But now the practice is under scrutiny and soon could cease to exist, he said.

　　“Rate parity is being legally challenged in the U.S. and the United Kingdom … as price fixing,” he said. “It’s unclear whether this is going to be a nuisance, whether these (lawsuits) are going to go away or whether it’s going to be a game changer.”

　　4. Improved system usability

　　Technology providers have done a fantastic job at providing hoteliers with sophisticated tools to support their business, Burns said. But many—if not most—of a system’s capabilities go largely untapped.

　　“Many of the operators are just unaware. They haven’t been trained. To the detriment of the hotel companies, rich opportunities are just passed by,” he said.

　　But training is not the answer, Burns said. There’s no time, dollars or interest in training front-desk associates, for example, to understand all the detailed intricacies and capabilities of an advanced central reservation system.

　　Burns offered re-evaluating the systems that the staff uses as an alternative.

　　Every system should be as simple and effective as Google, he said. The search engine giant gives users one screen that unlocks a world of capabilities.

　　The good news, Burns noted, is that many technology providers have recognized their need and have begun to offer intuitive new solutions to the hotel industry.

　　5. The marriage of distribution and revenue management

　　“The distribution activities are becoming much, much more the purview of revenue managers,” Burns said.

　　Whereas before the disciplines were separate, today hoteliers are recognizing how and why they overlap and, more importantly, the benefits this overlap can yield.

　　“In the end, that’s a good thing. We’re getting our acts together.”