Hotel leaders see third-party sales as main challenge
Security, the internet and asset ownership were all identified as key issues by hotel leaders at the Berlin conference last week.
The internet and the threat to room rates posed by third-party booking sites such as Expedia.com and Hotels.com was cited as the biggest single challenge to the hotel industry.
Malcom Preston, travel partner of the travel industry group at consultants PricewaterhouseCoopers, said that hoteliers in the USA last year lost $2b (£1.1b) in terms of rate to intermediaries, and that the industry must start to respond to the rooms distribution challenge if it wanted to reduce those losses.
Stephen Bollenbach, president and chief executive of Hilton Hotels Corporation, said his company was investing $175m (£94.7m) in technology this year just so it could compete with Expedia.com. He added that although only 2% of bookings came from third-party websites, compared with 10% from Hilton websites, the intermediaries were setting the benchmark for its room rates.
Most of the hotel executives speaking at and attending the conference said they would be investing in their own websites this year in a bid to capitalise on the growing popularity of the internet and to win more business. All expected the volume of rooms booked via the internet to continue to grow, with many predicting it would become the dominant booking method.
Asset ownership and whether hotel groups should be solely operators was another hot topic at the conference last week. Chris Rouse, senior director at CB Richard Ellis Hotels, said public companies would continue to shed assets this year. InterContinental Hotels Group recently announced plans to sell up to £1b of hotels, and Hilton, Whitbread and Millennium & Copthorne are all expected to follow suit.
The recent bombings in Madrid and the attack on a hotel in Baghdad further highlighted the issue of security within the hotel industry and the tourism sector at large. Delegates were urged to have plans in place for possible threats and assess how those threats might impact on business.
