Hotel Online  Special Report

Third-Party Booking Sites Still Dominate Internet Sales; 
Why Do So Many Consider this Bad?
By: Neil Salerno, Hotel Marketing Coach April 2005

A few days ago, I was greeted by an article distributed by Reuters, “Online travel giants still rule the roost – But carriers’ Web sites slowly gaining ground vs. rivals”.  The article discussed both airline and hotel web sites, but one thing is clear; many people still consider online travel agents as the opposition rather than travel partners. 

Quote. “Internet travel agencies like Expedia and Orbitz still rule the online travel business, but sites run by airlines, hotels, and car rental services are luring travelers seeking better prices by avoiding the middle man.” Does that mean we are in competition with online travel agents? Aren’t online travel agents selling our hotels too? 

As I recall, it was the hotel franchises who declared war with online travel agents, not individual hotels. We all understand that franchises are fighting for their very existence, but at what cost. Franchise hotel sites are competing with travel agency web sites for popularity on the Internet; and their weapon of choice is your hotel’s lowest available rates. 

Does the lowest available rate really build brand loyalty? I remember a day when great franchise programs, facilities, and service built brand loyalty. 

I also remember when we proudly included “Call Your Favorite Travel Professional” in our advertising. They were our travel partners. Now, that seems so very long ago. 

The terminology in the article may be slightly different, but two things jumped out at me in this article; the data comes from PhoCusWright, a well known authority and one of the best in the business, and second, it illustrates that we still have not found ways to work with, and not against, online travel agents to benefit hotel sales.

Hotels control rates and availability for their franchises and online travel agency sites. They spend $millions to sell our hotels. As an hotelier, does it matter where your reservations come from? There is an acceptable cost associated with both. Do you think that Internet reservations from your franchise are free? Think again. 

A direct quote from the article “PhoCusWright data show that consumer perceptions of supplier-direct sites have improved in recent years. In 2004, 45 percent of online travelers said Internet agencies have the lowest prices. That’s down from 59 percent in 2002. Meanwhile, 38 percent of online travelers said suppliers offer the lowest prices, up from just 14 percent two years ago.” 

Is it improvement that consumers are starting to believe that hotels offer lowest rates on their franchise sites? Sure it’s improvement for franchise sites, but at the cost of overall hotel ADR. 

Isn’t this whole situation like having your right hand compete with your left hand? 

Let me make sure I understand this. I have a hotel and selling my hotel are two sales people; one represented by my franchise web site and the other represented by Internet agency sites. Now, instead of working together for my hotel’s benefit, each one wants my lowest rate so the winner can dominate the Internet. There’s something wrong with this picture. 

I truly admire the work being done by the major franchises. They are brilliant people and we know that choosing the right franchise can make a hotel very successful, but hotels need business from anywhere they can get it; there have to be ways for franchises to work with online travel agencies to partner together to benefit the industry. 

Somewhere down the line, someone discovered that consumers respond to lowest rate guarantees and the race began. Lowest rate was the message, but why do the franchises ignore the fact that online travel agents also spend millions to reach consumers? They have introduced the spirit of travel to millions of people through their advertising. This benefits the entire industry. 

Let’s find new ways to support rather than work against our third-party supplier partners. Both hotel chains and third-party suppliers have their own target consumers, let’s the best of both worlds.



Neil L. Salerno, CHME, CHA
The Hotel Marketing Coach

Also See: Now That Online Hotel Booking Is Here to Stay, New Challenges Emerge / Neil Salerno / April 2005
Independent Boutique Hotels Can Compete With their Big Box Neighbors / Neil Salerno / April 2005
Who Are Your Most Important Guests? We’ve Come a Long Way, Baby! / Neil Salerno / March 2005
New Consumer Hotel Booking Preferences - They Love the Internet…Now What? / Neil Salerno / March 2005
Who Would Have Thought - Today's Hotel Marketing Necessity Is Also its Best Value / March 2005
Time For a Hotel Web Site “Make-Over”? Methods for Building a Successful Web Site Change / Neil Salerno / March 2005
Create Impact by Developing a Link Strategy For Your Hotel Web Site / Neil Salerno / February 2005
Steps to Develop Your Hotel's Presence on the Web / Neil Salerno / February 2005
Five Hotel Internet Marketing Myths - Busted!/ Neil Salerno / January 2005
How Does Your Hotel Web Site Measure-Up? 2005 Will Be the Internet’s Most Productive Year so Far / Neil Salerno / January 2005
Are You Being Out-Hustled By Your Competition? How to Dominate Your Hotel's Market Set / Neil Salerno / December 2004
Why Are Some Hotel Companies Plagued By Management Turnover? Is This Systematic of Poor Performance? / Neil Salerno / December 2004
Basic Components of a Hotel Website: Current Weather, Flash Animation, and Virtual Tours?? Plain Talk About Internet Sales / Neil Salerno / February 2004
Don’t Compromise Your Goals In 2004; Five New Year’s Resolutions You Will Want To Keep / Neil Salerno / January 2004
No More Whining About Third-Party Suppliers; You Control Your Own Fate On The Net / Neil Salerno / December 2003
Six 'Maxi’s' Guaranteed To Boost Hotel Sales / Neil Salerno / November 2003
It’s Time To Take Back Control Of Rates & Rooms - But Is The Enemy...Us? / Neil Salerno / November 2003
Booking Engines Are Like A Box of Chocolates...You Never Know What You’re Gonna Get! / Neil Salerno / October 2003
Hotel Web Site & Search Engine Optimization; Always A Work In Progress / Neil L. Salerno / October 2003
Hotel Budgets and Marketing Plans; Oh No, Is It That Time Again? / Neil L. Salerno / September 2003
Increasing Hotel Internet Sales Is Not Rocket Science...And It Doesn’t Have To Be Costly Either / Neil L. Salerno / September 2003
Are You Treating Third Party eWholesalers As Competititon Or a Valuable Marketing Partner? / Neil L. Salerno / August 2003
How Often Have You Heard, 'I could have gotten a better rate but the client saw our rates on the Internet' ? It’s Time To Get Back To Selling Location, Facilities, and Services / Neil L. Salerno / August 2003
Before You Begin that Marketing Plan Challenge Your Sales Team; Expect More and Get More / Neil L. Salerno / July 2003
Jump Up and Shout Yes - Delivering Best Online Customer Experience, Nice Job Vividence! / Neil L. Salerno / July 2003
Is The Internet Delivering On Its Promise? Well, It Depends on How you Look at It / Neil L. Salerno / June 2003
Coaching and Mentoring, Sometimes A New Paradigm Can Go A Long Way / Neil L. Salerno / June 2003
Sales Training Works Well, But Sales Mentoring Makes It More Effective; Mentoring Lasts a Lifetime / Neil L. Salerno / May 2003
Is It Time For A Sales Tune-up? How Healthy Was Your Last Forecast? / Neil L. Salerno / May 2003
Hotel Web Sites; Want it Creative or Effective? / Neil L. Salerno / May 2003
If You Always Do What You Have Always Done.... You’ll Always Get What You Always Got! Hotelier’s Mantra... Thinking Outside The Box / Neil L. Salerno / April 2003
Good Sales Planning - The Basics Still Work / Neil L. Salerno / April 2003

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