Internet is industry's biggest threat, warn leading hoteliers

Online third-party hotel room vendors are the biggest challenge facing the industry, a panel of leading hoteliers has warned.

Bob Cotter, president and chief executive of Starwood Hotels & Resorts, speaking at the 7th International Hotel Investment Forum in Berlin today, said he believed that the internet would become the dominant method of hotel booking over the next five years and would become the core strategic issue for hoteliers.

Stephen Bollenbach, president and chief executive of Hilton Hotels Corporation, agreed and singled out booking website Expedia as the single greatest threat to the industry.

He said Hilton Hotels was investing $175m in technology this year in the hope of competing with Expedia.

Bollenbach added that although only 2% of sales came from intermediaries like Expedia, compared with 10% through Hilton's own website, the group priced everything against them.

Discounting like that lost US hotels $2b last year in terms of rates, said Malcolm Preston, travel partner of the Travel Industry Group at consultants PricewaterhouseCoopers.

He added that hoteliers needed to respond to these distribution challenges if they wanted to cut the risk of losing more business to third-party websites in the future.

by Samantha McClary in Berlin

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