News for the Hospitality Executive
Online Agency Practices, The Cup is Full
by Georges Panayotis
October 16, 2012
The numerous reactions to my previous editorial show that there is a real problem on the role of online booking sites for distribution, well beyond the case of booking.com, which focused the tension.
The exasperation that has been widely felt for some time should not hide the positive role that could be played by online distributors, nor the carelessness of many hoteliers in marketing. Third party sites have an undeniable commercial, promotional and technological utility. But at what price? Hoteliers who have agreed to contract with online partners now have the feeling of having put their fingers in a gear that gradually eats at them. The balance of power is no longer equal and the level of commitment that many have recklessly accepted put them in a situation of earthen pot against the iron pot. In many cases negotiating is limited to a simple choice: take it or leave it, not to speak of the climate of mistrust that settles.
Even beyond the commission rates, which are already perceived as a financial burden that is hard to bear, a more fundamental question arises now. Who owns the customer? To those who let him pass through their reservation system or to those who welcome him in their establishment?
Everyone has their interpretation and recent initiatives of online sites show that opinions differ on this subject. This is a critical issue because it can lead to a real transfer of goodwill and loss of property value at the time of resale or evaluation. Some are already talking of future loyalty programs, specific to each online site, which would decrease the direct relationship between a client and a hotel property even more. Each hotel will lose a little more of its identity by being one option among others in the vast portfolio of site.com. The return of hotel brands in terms of public communication is a healthy reaction to customers' needs for a promise of quality and a need for security. Drowned in anonymity, an independent hotel will be even less able to exist and to distinguish itself vis-à-vis its customers.
The inability to compete with the global giants to buy keywords on search engines is even more frustrating when it is no longer possible to protect the name of one's own property. The hoteliers are so puzzled by the disproportionate power of marketing they begin to ask for tariff disparity. They want to blow up the Best Available Rate policy to attract customers with promotions, re-opening the door to the tariff jungle. This is producing the rope to strangle oneself a little more. The battle today is to maintain control of its inventory and diversify distribution channels.
For all these reasons, it is urgent to correct the balance. It does not take a "crusade", but just to regain territory. That is why Hospitality-ON is launching a petition among hoteliers to show their willingness to regain their place in the supply chain and their desire for new, more balanced and respectful relationships. We welcome your feedback of which to be the advocates.
The publication of the editorial by Georges Panayotis on the site www.hospitality-on.com, (Booking unveils its true face), sparked an incredible number of responses from our hotelier readers, who recognize themselves in today’s unbearable practices by these providers.
Beyond an extreme case, it is this channel of online sales that is challenged by these comments denouncing the excesses in commission and customer capture. It seemed natural to unite this beneficial movement to "put the record straight". By adhering to this petition, you demonstrate to your representatives and to the Government that the cup is full and we must return to a healthy collaboration, based on balanced relations.
To protect the anonymity asked by some hoteliers, we shall not reveal the identity of the signatories.
Click HERE to sign the petition!
ABOUT MKG Group
Established in 1985 by Georges Panayotis, MKG Group has built a solid reputation for business expertise and substantial European-based know-how in the fields of tourism, lodging and food service. MKG Group meets the needs of each of its clients by providing valuable analytical and decision-making skills necessary for success. www.mkg-group.com
|For further information , please contact :
MKG Group - International Development Department
T. : +33 (0)1 56 56 87 87
MKG Hospitality - Media Contact
Tel: +44 (0)20 7624 4030
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