The debate on Direct VS. Distribution took center tage this week with the release of PhoCusWright stats on OTAs, a survey that finds hotel not competitive with OTAs and the decision by Choice to quit Expedia. There are many discussions on the net.
Direct sales have been gaining market shares over the last several years. But that seems to be changing, or might change. OTAs are holding their own and gaining shares in these troubled times, when all markets count more that ever before.
The OTAs have taken the lead in travelers' minds as the best place to shop for deals. Hotels are not competing - USATODAY.com: Travel Deals Compared.
So what, if OTAs are bringing in business, does it matter? There are hotel managers who think OTA distribution is great. In many parts of Europe, hotels have almost opted out of the reservation business, allocating the majority of rooms to tour operators. There are hotel managers who do not like distribution and have done much to get out of that channel. Some have been burned, some just find the terms are getting more and more difficult, some say it is blackmail!
The issues are complex. For a very good analysis, see Robert Coles' article - Expedia and Freedom of Choice
We have also prepared a detailed analysis about brands in the channels. Watch http://tourismplatform.com/ for the latest news. Our first issue explains branding from a new perspective. It outlines AXSES' approach to the Next Generation Tourism Platform, which integrated all media and attempts to strikes a balance with direct and distribution marketing. http://axses.com/destinationmarketing/1-shopping.html
What happened when Georgia lost its OTA listing
OTAs Rev up at hotels' expense
OTAs' market share breakdown
Get out of the OTA Trap
What is the Brand definition: Johnson & Johnson Customer Business Analyst, Hannah Chi, says, "Orbitz, Travelocity, Expedia, I feel like they all give you the same options, with results from multiple airlines, kind of giving you a slew of what fits that criteria.” “Each doesn’t give me anything that another travel engine wouldn’t give me!”
Consumers will go where they find the best deal. This is good for Hotel Websites, if they are competive!