“Hotel brand executives are beginning to embrace OTAs again, even calling them partners, as companies such as Expedia and Priceline work through complex negotiations with many of the major brands.
OTAs are “a definite part of the value chain,” said Pat Pacious, executive VP of global strategy, distribution and technology for Choice Hotels International. “When your hotel is looking to discount, they’re a viable channel.”
Accor Hotels recently signed a long-term global agreement with Expedia; Jean-Luc Chrétien, Accor’s executive VP of sales, distribution and loyalty programs, called the relationship “fruitful.”…
The change in tune could be pinned to a number of driving factors.
First, hotel suppliers typically rely less on third-party intermediaries during times of high demand. With occupancy nearly back to pre-recession levels and U.S. hotels selling more room nights annually than ever before, suppliers could find themselves in the driver’s seat having to rely less on OTAs and therefore write fewer commission checks.
Similarly, high demand gives suppliers more leverage when negotiating commissions with partner distributors. According to sources, new brand agreements with Expedia in particular are at lower margins than in the past.
While lower commissions could be a direct result of less dependence on traffic, some argue increased competition in the OTA space is driving down margins…
Perhaps another reason hotel brands and OTAs are seeing more eye to eye these days is the collective hurdles they face with Google, which has made a grand entrance into the travel research and booking space. Google is capitalizing on the fact that many travel researchers start with a search engine to drive up the cost of keywords and cost-per-click revenue.
Getting traffic from Google is a costly proposition hotel brands and OTAs fear will only rise.”
So what do you think? Will this be a trend only for flagged properties or will boutique hotels also embrace OTAs once again?
Read the full article at HotelNewsNow: Brands, OTAs mending relationship.