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Article
Publication date: 11 January 2016

Pietro Beritelli and Roland Schegg

Hotel managers are being challenged by the increasing multitude of distribution and sales channels. Online travel agencies (OTAs) in particular generate a great deal of…

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Abstract

Purpose

Hotel managers are being challenged by the increasing multitude of distribution and sales channels. Online travel agencies (OTAs) in particular generate a great deal of uncertainty: Which are the best ones? Which ones offer the best conditions? How many channels are optimal for my hotel? How can I evaluate costs versus benefits? These and other questions concerning the optimal online distribution channel strategy have produced different reactions in practice. The aim of this paper is to challenge the need for an over-optimization of channel strategy by proposing that the consumer, at the end, deals with a network of information presented on one networked environment, including the Web. Hence, the network effect of the numerous online platforms is what drives consumer choice and, finally, bookings.

Design/methodology/approach

A series of multiple regressions with representative samples of hotels in Switzerland from the years 2009, 2010, 2011 and 2012 was performed to estimate the importance of the number of platforms against other independent variables. Additionally, further multiple regressions with samples from the years 2011 and 2012 using the most important platforms (first-tier channels) shows again that the number of platforms is more important.

Findings

The analyses show that the estimated number of online bookings by the respondents in the hotels is a result of the number of channels, not the type of channel. This is particularly true for non-categorized establishments and one- and two-star hotels. The analyses do not confirm the billboard effect, according to which particular platforms (first-tier channels) increase the probability of bookings. Thus, the survival strategy is to maximize share of shelf and to build on interdependencies and network effects.

Research limitations/implications

The study looks only at online bookings. Additional research into the connection between online and offline channels, particularly from the viewpoint of the consumer, will provide further insights. The study looks at the booking volume per channel, not the monetary sales volume or the profit. A study that quantifies not only the volume of bookings but also the total profit or the contribution to profit per channel could quantify the benefits of the multi-channel strategy.

Originality/value

The multiple online channel strategy seems to be the more effective approach to maximizing bookings online, regardless of the platforms chosen. Results of the study challenge the current opinion among practitioners that the multitude of distribution channels forces them to choose among single online channels and, therefore, drives the search for criteria to assess these channels or even to disregard them. The consistent results across 2009-2012 show that even in the turbulent phase of the advent of OTAs in the travel industry, hotels can adopt a winning strategy. Finally, the results suggest that the intermediation of online distribution of hotel beds has approached the condition of perfect competition, causing the OTA business model to be cannibalized.

Details

International Journal of Contemporary Hospitality Management, vol. 28 no. 1
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 24 August 2010

Basak Denizci Guillet and Rob Law

This paper aims to examine hotel star ratings on selected third‐party distribution websites, taking Hong Kong hotels as the sample.

6989

Abstract

Purpose

This paper aims to examine hotel star ratings on selected third‐party distribution websites, taking Hong Kong hotels as the sample.

Design/methodology/approach

Star rating information from 11 online distribution websites was retrieved and analyzed for all hotels in Hong Kong.

Findings

About 60 percent of the hotels were found on at least six of the selected distribution channels, and only 24 percent of the hotels have consistent star rating across different distribution channels. Results of data analysis indicated that consistent star rating becomes more difficult to maintain as the number of distribution channels used increases.

Research limitations/implications

Findings of the study are limited to the selected hotels and electronic distribution channels. Still, the online distribution channels represent some of the most widely used electronic distribution channels.

Practical implications

Findings of this research will be of use to hotel managers and guests for better understanding the standard, in terms of star ratings, of hotels.

Originality/value

Despite the importance of hotel star ratings on consumers and the hotel industry, prior studies in the existing hospitality literature rarely examined the difference of hotel stars. This novel study should, thus, make a meaningful contribution to knowledge development.

Details

International Journal of Contemporary Hospitality Management, vol. 22 no. 6
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 17 July 2007

Swati Dabas and Kamal Manaktola

This study aims to evaluate current room inventory distribution strategies of mid‐segment hotels in India, identifying factors that influence the managerial decisions in selecting…

6807

Abstract

Purpose

This study aims to evaluate current room inventory distribution strategies of mid‐segment hotels in India, identifying factors that influence the managerial decisions in selecting electronic distribution channel for their property.

Design/methodology/approach

A qualitative research methodology using structured interviews with senior level managers of five mid‐segment hotels in National Capital Region of India (NCR). Data collected were analysed to generalise the findings of this research.

Findings

Mid‐segment hotels in NCR rely on traditional distribution channels. Managers do not have sufficient knowledge about electronic distribution. There is a large gap between average room rate of mid‐segment hotels and higher‐level hotels. Demand during the period of study was higher and the trend for higher demand is likely to continue. Repeat business in mid‐segment hotels is nearly 70 percent.

Practical implications

The present high demand environment demands that the mid‐segment hotels look beyond their existing customer base and distribute inventory through multi‐channels including electronic distribution to achieve higher RevPAR, improved visibility and sustainable customer base for a longer period.

Originality/value

This research attempts to bring out factors that influence managerial decisions while selecting a distribution channel in the context of the Indian hospitality industry.

Details

International Journal of Contemporary Hospitality Management, vol. 19 no. 5
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 10 April 2009

Kirti Dutta and Kamal Manaktola

With the growing use of the internet, online distribution is emerging a communication and distribution channel. This paper aims to explore the role of the internet as a tool for…

1237

Abstract

Purpose

With the growing use of the internet, online distribution is emerging a communication and distribution channel. This paper aims to explore the role of the internet as a tool for sustainable tourism in India, especially as deployed by a large segment of three star and four star hotels in India. It discusses the practices currently employed by the mid‐segment hotels for the distribution of their services and seeks to delineate how they can use this as a tool for working towards sustainable growth.

Design/methodology/approach

The paper discusses how selected hotels in the National Capital Region (Delhi) are deploying online distribution. Their web sites have been assessed to evaluate how they fare in a generic search on the three major search agents currently being used in India: Yahoo, MSN and Google. The web sites are assessed as to whether they are likely to attract and provide enough information to potential tourists. Discussions with practitioners from the industry have also been incorporated to give more conclusive insights into how they practice the online distribution of their services.

Findings

The paper points at elements which should be incorporated while designing the web sites so as to effectively distribute their inventory and make it easily accessible to tourists looking for accommodation. This will reduce the intermediaries involved and, as this is paperless transaction, result in sustainable low‐cost economic growth.

Research limitations/implications

The paper provides an insight into what consumers have access to when they search for hotels via different search engines and whether or not this information is sufficient to precipitate a decision when choosing a particular hotel. If this can be managed effectively, customers can go online for all their bookings. This would yield cost savings for the organization and the customer, and in so doing, contribute to sustainable growth.

Practical implications

These findings are relevant to academics and practitioners as they offer an insight into online distribution channel management and communications with potential customers.

Originality/value

Relatively few studies have been conducted in the field of online distribution in the hospitality industry. This paper aims to assist hospitality operators in framing strategies to use the internet as a tool for sustainable tourism.

Details

Worldwide Hospitality and Tourism Themes, vol. 1 no. 1
Type: Research Article
ISSN: 1755-4217

Keywords

Article
Publication date: 28 August 2007

Rob Law, Ivy Chan and Carey Goh

This study aims to examine online room rates in Hong Kong hotels. It focuses on comparing and contrasting the lowest hotel room rates that are available to customers.

4275

Abstract

Purpose

This study aims to examine online room rates in Hong Kong hotels. It focuses on comparing and contrasting the lowest hotel room rates that are available to customers.

Design/methodology/approach

Eight distribution channels and 45 hotels in Hong Kong were examined for online room rates in a 13‐month period from 2005 to 2006. The eight distribution channels represented different nature of operations including both indirect and direct distribution channels.

Findings

Empirical findings showed the web sites of local travel agents and local reservation agents offered the lowest online room rates, and that indirect distribution channels offered lower room rates than direct distribution channels.

Research limitations/implications

A major limitation of this study is the geographic limitation of hotel selection.

Originality/value

Findings of the study are expected to provide insights for hoteliers to refine their online room rate strategy.

Details

International Journal of Contemporary Hospitality Management, vol. 19 no. 6
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 28 September 2012

Hong‐bumm Kim, Sunny Ham and Hye‐young Moon

The purpose of this paper is to examine the use of electronic distribution systems (EDS) in Korean hotels and investigate the differences between large and small and medium (S&M…

1604

Abstract

Purpose

The purpose of this paper is to examine the use of electronic distribution systems (EDS) in Korean hotels and investigate the differences between large and small and medium (S&M) hotels.

Design/methodology/approach

This is a qualitative and explorative study. An in‐depth interview was conducted of seven large hotels and nine S&M hotels.

Findings

Regardless of size, the surveyed hotels received, on average, more reservations through offline systems than online. It was found that large hotels showed less variation in the use of EDS than S&M hotels. While there was no distinct difference in the overall use of EDS, in terms of average, the highest percentage of hotel EDS use was demonstrated by S&M hotels. Regarding specific components and distribution flows, large hotels overall employed a variety of distribution channels, often implemented in multi‐faceted systems. S&M hotels, in most cases, adopted simpler distribution flows, i.e. hotel web sites and online travel agencies. This difference seems to be the result of the affiliation of primarily large hotels with huge hotel corporations.

Research limitations/implications

An emphasis has been placed on the current use of an EDS within S&M hotels, given their greater competitive challenge with regards to their larger counterparts.

Practical implications

Meaningful implications are made that building an extensive and effective information system appropriate to the size and type of the hotel's operations is especially needed by S&M hotels.

Originality/value

The paper addresses EDS issues specifically for S&M hotels.

Article
Publication date: 30 May 2008

Gabriel Gazzoli, Woo Gon Kim and Radesh Palakurthi

The internet has significantly changed the ways hotels distribute and price their products. The imminent success of online intermediaries caused financial problems for hotel

15001

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.

Details

International Journal of Contemporary Hospitality Management, vol. 20 no. 4
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 13 May 2021

Yu Qin, Jing Qin and Chengwei Liu

This study aims to examine the evolution of spatial–temporal patterns in China’s hotel industry from 1978 to 2018.

Abstract

Purpose

This study aims to examine the evolution of spatial–temporal patterns in China’s hotel industry from 1978 to 2018.

Design/methodology/approach

A database comprising over 140,000 hotels with more than 30 rooms was created. The exploratory spatial–temporal data analysis (ESTDA) method, based on space–time cube model, was used to explore and visualize the spatial–temporal pattern of hotels.

Findings

The Chinese hotel industry can be divided into two development stages, namely, a large hotel-dominant stage before 2000 and a small–medium-sized hotel-dominant stage after 2000. China’s prefecture-level cities were clustered into four tiers. The higher the tier, the earlier the city will initiate hotel development. The Chinese hotel industry has four continuous hotspots (the Yangtze River Delta, Pearl River Delta, Bohai Rim and Sichuan and Chongqing) and some temporary hotspots.

Research limitations/implications

This study lacks quantitative investigation, which could show the underlying mechanism of the evolution of the Chinese hotel industry.

Originality/value

This study is the first to investigate China’s hotel evolution over 40 years by applying big data and the ESTDA method. The systematic and evolutionary exploration will enable hotel researchers to understand the spatial–temporal nature of hotel distribution better. Introducing the ESTDA method into tourism and hotel research also provides an additional tool to researchers. Hotel investors and operators, city and tourism planners and market regulators can learn from the evolution of location patterns to make better where and when decisions.

Details

International Journal of Contemporary Hospitality Management, vol. 33 no. 6
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 10 April 2019

Apostolos Ampountolas, Gareth Shaw and Simon James

The purpose of this paper is to investigate how using social media (SM) as a tool to influence demand motivates the distribution of different price promotion strategies to…

3177

Abstract

Purpose

The purpose of this paper is to investigate how using social media (SM) as a tool to influence demand motivates the distribution of different price promotion strategies to encourage consumers to utilize direct bookings, along with how this impacts revenue strategies and profitability.

Design/methodology/approach

This study surveyed hotel executives who hold managerial positions and revenue managers with a direct influence on pricing decisions and developed multiple regression analysis models for various pricing approaches.

Findings

This study confirms the relationship between distribution channels and dynamic pricing strategies, although the same is not true with respect to traditional pricing techniques. The authors found that the adoption of SM as a strategic tool provides a platform to promote tactical revenue management strategies and to practice differential pricing motives.

Originality/value

The findings of the study will help hotel revenue managers to take into account a new way of thinking – namely, an interactive response to consumers’ preferences to improve profitability, based on different pricing methods distributed through SM. In this context, SM has elevated pricing strategies to a new and particularly challenging level.

Details

Journal of Hospitality and Tourism Insights, vol. 2 no. 1
Type: Research Article
ISSN: 2514-9792

Keywords

Article
Publication date: 26 July 2012

Thomas A. Maier

In the hotel industry today, web site marketing and third party distribution metrics are of critical importance in understanding the effectiveness of hotel revenue management…

3912

Abstract

Purpose

In the hotel industry today, web site marketing and third party distribution metrics are of critical importance in understanding the effectiveness of hotel revenue management objectives. The purpose of this paper is to propose a new model which tests hotel web‐effectiveness using the following variables: reach, content, consistency and price parity (RCO2P).

Design/methodology/approach

For the current RCO2P study, the hotel sample was broken down into two segment groupings of five hotels: luxury; and upper‐upscale. The ten full‐service hotels were monitored over a 90‐day period using room rate quotations and ordinal values across 14 dimensions based on three pre‐selected arrival dates.

Findings

Results of the RCO2P study indicated preferential display sequencing emerged as a significant factor in the reach category among all hotel properties reviewed. Only six of ten properties were measured as having achieved optimal web‐effectiveness, while poor price‐parity competency reflected the most situation‐critical performance among sampled hotel properties.

Originality/value

International comparative research methodologies were examined and determined to be effective models of certain hotel web‐effectiveness dimensions; however, a comprehensive hotel web‐effectiveness measurement model is still lacking which can better inform hotel industry executives. Therefore, future research should incorporate a best practice research approach combining the current RCO2P study elements with other web‐effectiveness measurement criteria based on the collective best practices identified among the research studies reviewed.

Details

Journal of Hospitality and Tourism Technology, vol. 3 no. 2
Type: Research Article
ISSN: 1757-9880

Keywords

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