Tuesday, March 10, 2015

A Disturbance in the Force: When the Demand Side Becomes the Supplier

For those familiar with the hotel distribution landscape, the picture has been set since the beginning of THISCO (The Hotel Industry Switch Company) in December 1988.  Suppliers or Hotels made their rooms available to Travel Agents via the GDSs and OTAs emerged as well as the Internet took hold.  


The Landscape Evolves

Over the past 28 years, THISCO transitioned into Pegasus, Wizcom, the other industry switch, eventually was acquired by Pegasus in 2007, direct connects emerged, OTAs grew and then consolidated, meta-searches grew and consolidated, channel managers emerged and Google sells Ad placements.  There has been evolution and consolidation, but all within the boundaries of the Demand side and the Supply side.


The Demand side making moves

In 2014, Priceline bought Hotel Ninjas and Buuteeq.  A head scratcher for many as an OTA bought Supply side services companies, thus a disturbance in the Force.  Regardless of the success or failures of these acquisitions, the lines are blurring and value propositions for Hoteliers are changing.  As Expedia consolidates players like Travelocity and Orbitz, power channels are also emerging.


What if

What if a Demand side entity offered to manage and sell/distribute 75% of a hotel’s inventory?  Would a hotel leave a Brand or would an Independent uncouple from a representation company?  Or does the Brand still provide the value proposition that drove the initial decision to join that particular Brand?  A disturbance in the Force is clearly being felt, we will watch if the Supply side decides to Strike Back.

Posted via OnFast - http://www.OnFast.com

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