Hotel chains are quietly working on shifting their distribution strategies to increase direct bookings from corporations and businesses, bypassing traditional intermediaries. This move could potentially disrupt the current way business travel is sold, affecting travel management companies and online travel agencies. By providing unique offers that can’t be found through third parties, hotels aim to attract more business travelers to book directly, leading to significant cost savings by cutting out middlemen fees.
Major hotel chains such as IHG, Choice Hotels, Marriott, and Hilton are experimenting with attribute-based booking, allowing travelers to choose specific room attributes like bed size or room location and bundle them together for a custom price. This new pricing and booking process is aimed at road warriors and could potentially reduce hotels’ distribution costs significantly. Hotel executives are optimistic about the adoption of attribute-based booking in the next few years, as it offers a more personalized and tailored booking experience for travelers.
Hotels are motivated to drive more direct distribution to save money by avoiding commissions paid to middlemen such as travel management companies and online travel agencies. By pushing for this change, hotels hope to reduce the high costs associated with distributing through traditional channels and encourage more direct bookings. Some corporate travel buyers are also eager for reform, seeking improved analytics and reporting to better understand their travel spending and make informed decisions.
One of the hurdles hotels face in implementing attribute-based booking is the lack of industry-wide standards for this new distribution method. Without standardized codes for room upgrades, different systems in different countries may struggle to recognize and price upgrades correctly. However, industry bodies like HEDNA are working on this issue, and new technology players may find ways to overcome these challenges using generative AI and machine learning.
While there are uncertainties and challenges in adopting attribute-based booking, hotels believe that offering more personalized options through direct channels could help win over business travelers and reshape the travel booking landscape. By addressing leakage issues in corporate travel programs and providing more tailored options, hotels hope to encourage workers to stay within policy and book through approved channels. Overall, hotels are betting on the success of direct bookings to save costs and provide a better booking experience for travelers.
