The role of OTAs in the distribution process of Spanish Hotel Chains

Abstract

One of the most outstanding challenges that the hotel sector has ever had to endure has come in the form of the predominant position that the so-called Online Travel Agencies (OTA) have managed to garner in recent history, thus radically modifying the electronic distribution chain as we know it. The effective application of the “merchant” model, has, in turn, obliged hoteliers to pay high commission rates, while increasingly losing control over their inventories and final sales prices, due to potential customers being increasingly compelled to perform their purchases through means of on-line intermediaries. The present paper aims at analysing the relation between the hotel sector and the OTAs, so as to successfully pinpoint the various strategies the former can undertake so as to mitigate their dependence to the latter. Further along the document, a study will be laid out, revolving around the degree of utilization of aforesaid strategies, as well as the most common business model and the companies most requested by Spanish hotel chains. various hotel reservations by channel for the so-called transient segment (related to individual leisure and business) within the North American market. Results show that up to a 68% of the sales are performed through direct channels, while just a 32% of the total reservations take place through third-party channels.