After giving away much of their business to OTAs, hotels aim to reduce what are now substantial distribution costs by bringing more traffic in house. But what is often forgotten about this conflict is that by and large it is a U.S. phenomenon. The reason: Europe and the rest of the world are too fragmented.
According to hotel data company STR in the U.S. 60.5 percent of all hotels are branded (meaning at least three properties sharing the same name), in Europe the proportion falls to 23.8 percent.
In the U.S. the hotel companies have more power as they control more of the market and are therefore able, through expensive advertising campaigns and lobbying, to try and wrestle some of the business back from intermediaries.
In Europe, however, more than three-quarters of hotels are on their own, making it much harder to move the needle. It also means they are much-less likely to be able to use loyalty programs to entice people to use their in-house channel.
“If you look at Europe and Asia, globally speaking, yes direct booking is growing, which is fine, yes there’s great stuff and we should discuss how meta can be great for hoteliers to actually boost and grow their direct bookings but globally speaking if you take the macro numbers OTAs [online travel agents] and indirect distribution continues to grow way faster than direct bookings,” said Guillaume De Marcillac, Co-Chief Executive at Fastbooking, a digital services company owned by AccorHotels during a panel discussion at Phocuswright Europe.
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Read also "Hotels’ drive for direct bookings ‘starting to pay off’" at Travolution