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

Gabriel Gazzoli (Institut Hotelier César Ritz, Le Bouveret, Switzerland)
Woo Gon Kim (International Center for Hospitality Research, Florida State University, Tallahassee, Florida, USA)
Radesh Palakurthi (School of Hotel and Restaurant Administration, Oklahoma State University, Stillwater, Oklahoma, USA)

International Journal of Contemporary Hospitality Management

ISSN: 0959-6119

Article publication date: 30 May 2008

Abstract

Purpose

The 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/approach

By 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.

Findings

Descriptive 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/implications

A limitation of this study is the use of convenience sampling methods, sample size, and currency conversion instruments.

Originality/value

Findings 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.

Keywords

Citation

Gazzoli, G., Gon Kim, W. and Palakurthi, R. (2008), "Online distribution strategies and competition: are the global hotel companies getting it right?", International Journal of Contemporary Hospitality Management, Vol. 20 No. 4, pp. 375-387. https://doi.org/10.1108/09596110810873499

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited