An article by Hotel News Now Editorial Director Jeff Higley last Thursday may just be the bugle call for a coming battle between OTAs and their benefactors, hoteliers. Higley’s report from the 23rd Deloitte European Hotel Investment Conference shined a bright light on growing friction between third party distribution agents, and the service providers they are supposed to help.
It’s no great secret that OTAs have wedged themselves tightly in between hotel proprietors and their potential guests. Higley’s report encapsulates this fact with a narrow look at Intercontinental Hotels Group CEO Richard Solomons’ take on these issues. The gist Solomons’ view being – well, not exactly online travel agency (OTA) marketing ammunition. The IHG leader plainly (of gently) lays down the line that Expedia and the others have crossed the line in leveraging hotels. As Higley so aptly puts it, hoteliers really look at OTAs as; “a place to sell excess inventory before it expires.” Then the other foot falls, an industry giant foot that is. Higley quotes from Solomons:
“…The important thing to remember is as a hotel industry we very foolishly hand over huge amounts of money to the online-travel agents, which they then use to invest in marketing, publicizing, to steal business.”
Let’s make no mistake here, this retort by Solomons to panel moderator Alex Kyriakidis (who will be at Marriott next year), is not by some irate pulpit pounding industry anarchist, Solomons is as reserved and gentile as they come. This writer’s take on that is, if Solomons is willing to mention it on the record, underneath the industry is a yellow jacket swarm.
Expedia pays for a study to accredit the so called “billboard effect” – the other OTAs and their marketing companies tout the same at every opportunity. Meanwhile, back at the hospitality dude ranch, billions in revenue gleaned from hoteliers is spent promoting the promoters. This intuitive and meaningful article by Chris Patridge over at Tnooz offers a nice perspective. Meanwhile, from one another view, the whole online travel mix ends up looking like something out of The Godfather.
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