Staying Ahead of Distribution Technology

Technology and the ever-evolving online distribution landscape have transformed the way travelers are booking their trips. This makes it an exciting time for consumers and hotels, particularly as we see new and diverse travel booking platforms come to fruition. From chatbots to mobile phone applications, to more and more digital options, these new avenues drive innovation and competition.

Amid these transformations, the hotel industry remains focused on putting guests first. With the latest research showing that some 67 percent of consumers book a hotel visit online, it’s imperative that the evolving digital marketplace continues to prioritize consumer protection. Central to this, travelers deserve transparency from the beginning to the end of the booking process, as well as clear, consistent, and comparable information to review.

As new options for accommodation bookings continue to advance and evolve every day, the hotel industry remains extremely competitive, with hotels working hard to ensure our guests feel comfortable with their purchasing decisions and that hotels meet all guest expectations, as transparency and customer satisfaction are at the core of the industry’s guest-centric, hospitality-focused business model.

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But as we consider online bookings, it’s important to remember that there are many ways that consumers can book hotels online. While booking directly on a hotel’s website is one of the safest and most popular methods, online travel agencies (OTAs) also play a role, all while global distribution systems, travel agents, mobile apps, metasearch engines, and newer internet-enabled devices and channels make up a significant portion of the pie. As the collective share of guest-paid revenue from these evolving online platforms continues to grow, our approach to ensuring consumers are adequately protected during the booking process must be holistic, covering established avenues like direct booking and OTAs, as well as newer players that are just entering the market or will be soon. 

Unfortunately, consumers often unknowingly get the short end of the stick as a result of the current distribution landscape. Take for example the OTAs, where we’ve seen significant consolidation, with Expedia and Priceline now accounting for 95 percent of online travel bookings, which can limit consumer choice. Because the larger OTAs operate and partner with thousands of third-party affiliates that sometimes pose as a hotel’s website, we’ve seen an uptick in deceptive booking practices and certain booking scams. And even more concerning, as booking on mobile phones and smaller tablets becomes more prevalent, these scams or inconveniences will likely increase, which is certainly not what the consumer wants or deserves.

We’ve also seen some OTAs fail to disclose their mandatory online service fees to consumers in a transparent and up-front manner, in some cases obscuring the portion of the sales price that goes toward their service fees, as opposed to taxes. According to a recent poll, 60 percent of American adults who have booked a hotel stay online are aware of service fees from online travel companies, but when considering these fees, 61 percent would prefer the fee be broken apart and a plurality (29 percent) call the practice of lumping the fees and taxes together “misleading.” Indeed, although 57 percent of those who have booked online are willing to pay a service-booking fee, a stronger majority (64 percent) say OTAs should not receive a fee from consumers if they also receive a commission from hotels. This strongly suggests that consumers might make different decisions if they had full information regarding mandatory online service fees.

It’s clear that the morphing of travel technologies and digital intelligence in the online booking space is growing and accelerating, which is why it is imperative for hotels to continue to lead the way in meeting consumer expectations through clarity and choice. Our guests are our business. That’s why AH&LA will fight every day to achieve a fair, transparent, and competitive marketplace. A positive consumer experience—from start to finish—is our top priority.

About the Author
Vanessa Sinders is senior vice president and department head of government affairs for the American Hotel & Lodging Association.

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