Online distribution strategies and competition: are the global hotel companies getting it right?

Abstract

PurposeThe internet has significantly changed the ways hotels distribute and price their products. The imminent success of online intermediaries caused financial problems for hotel chains since online travel agencies offered better prices than the hotel brand websites. The existing literature on hotel online distribution has focused on pricing strategies and room availability issues for different segments of hotels. This paper, however, aims to compare online room prices of global hotel chains across online distribution channels and their own brand websites.Design/methodology/approachBy using only the internet, 2,800 room rates were collected and analyzed. Descriptive statistics such as means and percentage were used to answer the research questions. Personal interviews with a CEO of an e‐business company and an area revenue director of a global hotel chain were conducted to confirm our findings and to gain additional insights in the related issues.FindingsDescriptive statistics indicated that US properties are doing a much better job than their international partners in regards to “best rate guarantee,” “rate parity,” and room availability across online channels. Rate consistency still remains a problem within US properties.Research limitations/implicationsA limitation of this study is the use of convenience sampling methods, sample size, and currency conversion instruments.Originality/valueFindings of this study would benefit revenue managers, general managers, hotel owners, and corporate brand managers to make decisions and to formulate new policies concerning their online distribution, revenue, and brand optimization strategies.