HOTELMARKETING.COM

The shift from hotel merchant model to agency model

August 31, 2012 | Hotel Marketing

After 10 years of learning how to operate effectively under merchant-model agreements, many parties across the distribution landscape might find themselves having to learn the ins and outs of the agency model sooner rather than later.

After Expedia introduced its Expedia Traveler Preference program earlier this month—which would allow travelers to choose whether to pay Expedia at the time of booking (merchant model) on the site or pay the hotel upon checkout (agency model)—sources told HotelNewsNow.com they expect the agency model to take off immediately.

“I believe the agency model is going to sunset the merchant model and that the merchant model is going to go away very quickly,” said Mark Carrier, president of B. F. Saul Company Hospitality Group. “They’re going to move extremely quickly to the agency model, and I think it will happen almost overnight.”

Sources said hotel brands pushed Expedia to use the agency model more prevalently in its early goings, but Expedia was hesitant and instead chose to push its merchant model. Today, the online travel agency is being driven toward an agency model by its competitors—namely Booking.com, which operates on an agency model—and its customers.

“If the consumer is given the choice to pay at the time of booking or pay later, it’s just a no-brainer,” Carrier said. “The consumer is going to lead this, and the adoption will go very quickly.”

Get the full story at HotelNewsNow.com

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