‘TMCs need to adopt tech that takes control of the fragmented hotel distribution system to give their corporate clients what they need, as well as ease their own staff and business challenges,’ says Eric Meierhans, chief commercial officer at HotelHub.
In this Q&A he explains why.
Why is hotel distribution so fragmented?
Hotel distribution has always been highly fragmented because the GDSs were primarily developed for TMCs to book airline content.
Although the GDSs gradually added hotel content, the internet and direct online booking had taken off in the meantime, meaning hotels had already begun distributing their content via direct connects with leisure portals as well as their own websites and online hotel booking agents.
As a result, hotel distribution incorporates multiple channels offering duplicate hotels and copious different rates.
What challenges do TMCs and corporates face as a result of this fragmentation?
The biggest challenges for TMCs are hotel attachment, visibility, leverage and productivity.
GDS-centric TMC consultants have to shop across multiple hotel booking platforms, the web and OTAs to give their corporate clients the best choice of hotel content and rates. TMCs find it difficult to have a clear hotel strategy.
They are also struggling to replace staff lost during the pandemic, leading to servicing issues. Inexperienced new starters need training from scratch in how to use GDS and other systems.
Travellers and bookers feel underserviced by TMCs, as they can access and book richer hotel content online themselves. As a result, customer value is increasingly being eroded.
Are there any other factors adding to these challenges?
Hotel rates are rising post-pandemic, plus inflation and the cost-of-living crisis are impacting corporate travel budgets and TMC margins.
The increased focus on duty of care and sustainability means corporates are also optimising their travel programmes.
Travellers will continue to expect greater flexibility and personalisation. At the same time the tech landscape is moving rapidly and TMCs are expected to adapt or they will get left behind.
How can tech like HotelHub help TMCs solve these pain points and create a better value proposition for their customers?
HotelHub allows TMCs to control all those hotel distribution sources in one intuitive booking platform. It consolidates, de-duplicates and normalises content from their chosen sources, which can provide access to over 2M unique hotels with rates from multiple channels.
The platform includes an agent booking interface seamlessly integrated with the TMC’s GDS desktop. It also exposes the same content through a single API to the corporate client’s preferred OBT, so that bookers or travellers can access this full hotel content, while allowing their TMC to service bookings offline. HotelHub can be configured according to the TMC’s hotel strategy and their client’s travel policy.
Hotel attachment rates increase, TMC staff productivity improves and new starters don’t need training as HotelHub is so easy to use. Corporate clients are getting the hotel content they need, thus driving better traveller compliance and hotel spend management.
It’s win-win for TMCs, corporates and preferred hotel providers.