Who are we? Annemarie Gubanski Taktikon Consultancy
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1 Who are we? Annemarie Gubanski Taktikon Consultancy Three experts Four different products Ø Training Ø Outsourcing/mentoring Ø (System) Audits Ø Recruitment
2 Distribution is like a box of chocolates You never know where it is going to go!
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4 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
5 So, where is it going to...? Commission Margin 72% 28% 82% 18% Extra margin Remember the chocolates! Expedia Package Wholesalers
6 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
7 So, where is it going to...?
8 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!
9 The Distribution Game The Competition Game Several other games Hotel The Communication Game The Investment Game The Technology Game The Guest Service Game The Hotel Profile Game
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11 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
12 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 Ø Contracting possibility to go below Hotel s Public Rates Playing the Control Card Ø Increasing public rates depending on commission rates (different rates depending on 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
13 Action Reaction Playing the Control Card Ø Increasing public rates depending on the commission rates (different rates depending on 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
14 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
15 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
16 Thank you! Annemarie Gubanski
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