Feature: Brand erosion, or how not to market your hotel on the web
Critical Online Distribution Issues Revisited a Year Later
By Max Starkov
A little over a year ago this author published the article “Brand Erosion or How Not to Market Your Hotel on the Web”, which created a lot of commentaries and, we hope, made at least some hoteliers re-examine their online distribution strategies. Since 9/11, in times of unprecedented crisis and continued economic downturn, the Web allowed Internet-savvy and proactive suppliers and intermediaries to establish rewarding interactive relationships with their customers, move inventory and stay ahead of the competition. At the same time it punished those suppliers who had no clear Internet strategy and understanding how the Web and online distribution work. What has changed since May of 2002?
Direct Online Distribution Has Become a Top Priority
This has been another difficult year for hoteliers. What has changed since May of 2002? To begin with, there is a new realization among hoteliers that something has to be done to change the status quo in online distribution. Hoteliers are becoming more and more frustrated with the fact that they are consistently losing leisure and business customers alike to the online discounters. For many hoteliers Direct Online Distribution has become a top priority.
Last year we concluded that travel suppliers in the other travel sectors were well ahead of hoteliers in aggressively adopting direct-to-consumer online distribution. This continues to be the case a year later. Since 9/11 all major airlines and car rental companies aggressively adopted the “Direct Web Distribution Model” i.e. direct-to-consumer sales via the Internet as the centerpiece of their online distribution strategy. If we include Southwest Airlines, which has a very unique direct-to-consumer online business model, the direct-to-consumer share of U.S. airline online distribution will exceed 62% this year. JetBlue generates over 65% of its revenues through its website.
In the offline world hoteliers enjoy more direct sales (75%) than intermediary sales (25%). In the online world hotels are less aggressive than the airlines about bypassing the intermediary channel. This year for example only 52%-53% of online hotel bookings will be direct sales. Unlike the airlines, hoteliers have difficulty maintaining market share and finding the right
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