Looking forward in third-party distribution debate

With advances in technology and changing travel habits constantly altering the playing field for hotels' third-party distribution policies, HME and its sister publication Arabian Travel News organised a roundtable last month with hoteliers and distributors to discuss the way forward.

Although hotels rely on the support of third party distributors such as travel agents, online travel retailers and destination management companies, the issue has become more important in recent years as hotels look to attract direct online sales and reduce distribution costs.

When the group of hoteliers, distributors and agents met at the Hilton Dubai Creek last month, there was agreement that technology needed to evolve, allowing distributors and hoteliers to connect seamlessly.

But while hoteliers supported the trend towards one global rate and a need for price transparency, distributors argued that the "one rate fits all" solution would not work, and relationships should be individually managed to establish net rates and commission levels.

Gullivers Travel Associates' hotel division's regional manager for the Middle East, Shane Collier, said some hotel groups were very open about the way their rooms were sold online, while others were fence-sitting "because they don't want to miss out on certain opportunities".

But Hilton's director of sales and marketing in the Arabian Peninsula, Guy Epsom, said his focus was "to ensure our rates are distributed fairly".

The original third-party distribution model was based on a time when tour operators printed expensive brochures, directing travellers onto flights and boats, so were rewarded with a discounted rate of up to 30% to compensate them for their expenditure, Epsom explained.

But technology now meant it was cheaper for Hilton to distribute its rates and market its products, and the company didn't want to see rates online that were cheaper than its own best rate guarantee, he continued.

But Destinations of the World group managing director, Keith Fernandez, said complex B2C and B2B distribution channels meant although hotels were aiming to have guests pay the same rate regardless of where they found it, its own pricing structure would make it difficult to achieve.

For example, Fernandez explained, the Hilton Egypt charged a higher rate for GCC nationals.

"When you are distributing through the internet, a consumer anywhere in the world can access the hotel's web site and book at the available rate, irrespective of where they are based or their nationality," he said.

"What is to stop a GCC national going on the Hilton web site and booking a rate that is cheaper that what is available through the retail travel agents or the wholesalers? In effect Hilton is under cutting its own rate and not offering a best rate guarantee to its customers either."

Marriott's Middle East and Africa area director of sales and marketing, Jeff Strachan, said the responsibility lay with hoteliers to ensure they knew where the rates were to be distributed and to adjust them accordingly, but Starwood's Middle East online distribution and field marketing manager Andreas Plum said the trend was moving towards using "one rate globally".

Mövenpick Hotels and Resorts Dubai regional manager, Thomas Tapken, agreed that a global rate would be likely in the future: "Right now we can play different fields with different rates, but 10 years down the line [a global rate] is something we must prepare for. If we don't, we will lose out".

Print | Email | Discuss this article |

READERS' COMMENTS

View all comments (0)

Have your say

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Security Code *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM