CASE STUDY: Delegated Distribution: Hotels Should Be Warned! An Example from Croatia

Abstract

The penetration of online booking among hotels has been growing steadily. In order to maintain its market position, online travel agencies (OTAs) are offering small and medium hotels, mainly to those which have not yet adopted e-commerce, their own booking engines for websites or as apps to be integrated on hotels' platforms. Hotels are persuaded by cuts in commission, no commissions and other privileges. The implications of such a decision are of crucial importance to hotels in the struggle for tourists. This article presents a new classification of tourism e-distribution which includes this phenomenon named “delegate distribution”, a partnership strategy of OTA-s with hoteliers drawing on a study on the expansion of delegated distribution in Croatia. The key advantages and disadvantages are also listed, along with a comparison with direct and indirect forms of distribution in terms of inference upon other marketing mix elements.