Annemarie Gubanski Who are we? Taktikon Consultancy Three experts Four different products Ø Training Ø Outsourcing/mentoring Ø (System) Audits Ø Recruitment www.taktikon.com
Distribution is like a box of chocolates You never know where it is going to go! www.taktikon.com
www.taktikon.com
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 www.taktikon.com
So, where is it going to....? Remember the Margin 72% 82% chocolates! Commission Extra margin 28% 18% Expedia Package Wholesalers www.taktikon.com
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 www.taktikon.com
So, where is it going to....? www.taktikon.com
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! www.taktikon.com
The Distribution The Competition Game Game Several other The Communication games… Hotel Game The Investment The Technology Game Game The Hotel Profile The Guest Service Game Game www.taktikon.com
www.taktikon.com
Action Reaction Hotels start to offer lower rates on OTAs are holding their position as cheaper channels long as possible Ø Focus on Direct Sales Ø Questioning Hotel loyalty programs Ø Price Transparency is still an important factor Ø Holding position by pointing out their importance for hotels Ø Metasearch sites are being used and tested more www.taktikon.com
Reaction Action OTAs holding their position as long Playing the Control Card as possible Ø Increasing public rates depending on commission rates (different rates depending Ø Questioning hotel loyalty programs on the channel) Ø Holiding position by pointing out their Ø Restrictions on the more expensive channels importance for hotels (such as Package Rates) Ø Contracting possibility to go below Hotel’s Ø Finding different ways to distribute with other Public Rates channels entering the market www.taktikon.com
Action Reaction Playing the Control Card Trying to obtain control Ø Increasing public rates depending on the Ø Most probably there will be a strong reaction commission rates (different rates depending to this where OTAs will narrow down the on the channel) possibitlity to use restrictions on the sites Ø Restricions on the more expensive channels Ø We expect Google to start mingling into the (such as Packaged Rates) game where they will control all parts of the customer journey Ø Finding different ways to distribute with other channels entering the market www.taktikon.com
Reaction Action Trying to obtain control More hotels to follow Ø Most probably there will be a strong reaction Ø From the beginning not all hotels are likely to to this where OTAs will narrow down the dare to react, but hotel position get’s stronger possibility to use restrictions on the sites as more hotels will follow Ø We expect new players to start mingling into Ø Distribution Costs calculations are now the game where they will control all parts of changing as margins become more equal from the customer journey channel to channel www.taktikon.com
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 www.taktikon.com
Thank you! Annemarie Gubanski annemarie@taktikon.com www.taktikon.com www.taktikon.com
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