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Distribution is like a
You never know where it is going to go!
Who are we? Taktikon Consultancy Three experts Four different - - PowerPoint PPT Presentation
Who are we? Taktikon Consultancy Three experts Four different - - PowerPoint PPT Presentation
Annemarie Gubanski Who are we? Taktikon Consultancy Three experts Four different products Training Outsourcing/mentoring (System) Audits Recruitment www.taktikon.com Distribution is like a box of chocolates You never know where
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So, where is it going to....?
Ø Rate Parity rules are changing and the OTAs are reacting to it Ø Wholesalers are consolidating into the HotelBeds brand Ø Expedia is trying to gain Wholesaler market share here using their Packaged rates
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28% 72% 18% 82%
Expedia Package Wholesalers
Extra margin
Remember the chocolates!
Commission Margin
So, where is it going to....?
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So, where is it going to....?
Ø Rate Parity rules are changing and the OTAs are reacting to it Ø Wholesalers are consolidating into the HotelBeds brand Ø Expedia is trying to gain Wholesaler market share here using their Packaged rates Ø In the meantime, Booking.com is still the dominator Ø AirBNB is moving towards becoming an OTA Ø Hotels are still struggling to gain their market share, though they are coming close Ø Net ADR and NetRevPAR are the new KPIs, but hotels have some way to go Ø Amazon might try again, if they fix the reason the failed in the first place Ø The Google of Things is coming our way and will change the distribution platform
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So, where is it going to....?
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The distribution game
The Rules
Ø The aim of this game is to obtain the best profit and increase market share Ø At any time of the game different opponants can join the game Ø At this moment we are playing against three opponents: GDS, Wholesaler and OTA from which the OTA is the most active opponent Ø There is one Control Card. The hotels are the ones that hold the card
I repeat: Hotels hold the Control Card!
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Hotel
The Distribution Game Several other games… The Competition Game The Communication Game The Investment Game The Technology Game The Guest Service Game The Hotel Profile Game
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Action Reaction
Hotels start to offer lower rates on cheaper channels
Ø Focus on Direct Sales Ø Price Transparency is still an important factor Ø Metasearch sites are being used and tested more
OTAs are holding their position as long as possible
Ø Questioning Hotel loyalty programs Ø Holding position by pointing out their importance for hotels
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Reaction Action
OTAs holding their position as long as possible
Ø Questioning hotel loyalty programs Ø Holiding position by pointing out their importance for hotels
Playing the Control Card
Ø Increasing public rates depending on commission rates (different rates depending
- n the channel)
Ø Restrictions on the more expensive channels (such as Package Rates) Ø Finding different ways to distribute with other channels entering the market Ø Contracting possibility to go below Hotel’s Public Rates
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Action Reaction
Playing the Control Card
Ø Increasing public rates depending on the commission rates (different rates depending
- n the channel)
Ø Restricions on the more expensive channels (such as Packaged Rates) Ø Finding different ways to distribute with other channels entering the market
Trying to obtain control
Ø Most probably there will be a strong reaction to this where OTAs will narrow down the possibitlity to use restrictions on the sites Ø We expect Google to start mingling into the game where they will control all parts of the customer journey
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Reaction Action
Trying to obtain control
Ø Most probably there will be a strong reaction to this where OTAs will narrow down the possibility to use restrictions on the sites Ø We expect new players to start mingling into the game where they will control all parts of the customer journey
More hotels to follow
Ø From the beginning not all hotels are likely to dare to react, but hotel position get’s stronger as more hotels will follow Ø Distribution Costs calculations are now changing as margins become more equal from channel to channel
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Conclusions
Ø Stay ahead of the game Ø Keep Up To Date on what is happening in the market Ø Think strategically and…. Ø Remember: you hold the Control Card
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