6 years ago

Is it time for a global HotelWiki to assist the industry (and consumers) with hotel distribution?

NB: This is a guest article by Markus Luthe, CEO of the German Hotel Association.

There is a certain helplessness creeping in around online hotel distribution which is worrying hotels in Europe and worldwide.

In recent weeks, Germany’s market leader HRS increased commission fees by more than 15 %, just two months after acquiring Hotel.de, the number three in the German market.

Simultaneously the screws were tightened in a frightening manner as rate- and availability-parity clauses applicable throughout all (!) online and offline distributions channels were inserted into the terms and conditions.

Now we are not talking only about last room availability, but we are confronted with anytime-access to the entire hotel inventory, a veritable product-parity.

Since then there has been increased murmurings in the discussion forums and chat rooms of the hotel industry.

For the sake of fairness, it should be mentioned that HRS also announced an automatic GDS-connection via Amadeus for HRS hotels, including a flat fee.

This particular booking portal’s power and the eventual dependency of hotel businesses on it raise fundamental questions.

Why couldn’t the hotel industry oppose these mechanisms of online distribution in time, and why did it leave the increasingly one-sided booking conditions in place?

At least in Europe the cause lies in the conditions of the market, where a constantly narrowing oligopoly on the side of the supplier faces a fragmented hotel sector.

As a consequence, unfair market practices are established which the hotel industry can barely defend itself. In economics this effect is known as The Prisoner’s Dilemma.

What is the way out?

Sure, every hotel has a whole lot of homework to do to strengthen its direct bookings via its own website.

Hotel associations inform their members and give a wide variety of help with direct-booking strategies, hotel reviews, content, customer loyalty, context and search engine optimization.

The development of a booking system belonging to the hotel industry is hardly the tool of choice due to the market and painful experiences of the past, no matter how promising new approaches, such as RoomKey, may sound.

And also Google will not incorporate the heroic epic of the so-called White Knight into its repertoire.

But how can the markets be held open in the medium and long term?

The hotel industry must have a vital interest in preventing monopolies in the growing markets of online travel agents, hotel review sites and search engines.

For this the barriers to entry for third parties such as agencies, app-developers, booking service providers, channel managers, online-merchants, search engines, think tanks outside the industry, garage startups and any other market participant, must be kept as low as possible.

This enables real and latent competitive pressure to be generated though alternatives, which sustainably prevents monopoly rents from being siphoned.

This allocation of industry know-how must be perceived and organised as a public good, the use of which is accessible to the general public at a low cost, or for free.

Why don’t we, as an industry, combining our knowledge and expertise, build a comprehensive hotel database – a worldwide Hotelwiki?

It would include unique global identifiers, address data, GPS-coordinates, photos, videos and in particular deep links to the favourite booking page of each hotel would have to be added and inserted there.

This project could be cast in the shape of a foundation. Or it could be built up from already existing industry initiatives such as Dothotel, HEDNA, HFTP, HTNG, OpenTravel Alliance, RoomKey or TTI, you name it.

Who takes the lead is secondary in the end. We need this industry’s joint show of strength – worldwide, undistorted, neutral.

It’s time for a Hotelwiki!

NB: This is a guest article by Markus Luthe, CEO of the German Hotel Association.

NB2: Images via Shutterstock.

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A founding principle of tnooz was a diversity of viewpoints from across the spectrum. Viewpoints are articles by guest contributors from around the travel and hospitality industries. The views expressed are the views and opinions of the author and do not reflect or represent the views of his employer, tnooz, its writers, or partners.



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  1. Markus

    Yesterday the German Federal Cartel Office (“Bundeskartellamt”) gave a written warning to the HRS Hotel Reservation Service GmbH because of infringement of §§ 1 and 20 of the German Law Against Restraints on Competition amongst others.

    The Authority asserted that HRS intended to reach legally binding most-favoured-treatment clauses in contracts with hotels, expecting them to guarantee the best hotel price, the highest room availability and the most advantageous booking and cancellation terms.

    From this year’s March on the most-favoured-treatment clause was meant to become even stricter by becoming applicable to the hotel offers at the reception. In the past HRS had blocked hotels from being bookable through its portal on several occasions for not complying with the most-favoured-treatment clause.

    The German Federal Cartel Office’s president explained that HRS, the most leading hotel portal by far in Germany, was preventing competitors from gaining way through offering better conditions by use of the best price clause.

    The German Federal Cartel Office’s written warning covers the most-favoured-treatment clause used by HRS. It does not extend to the recently announced increase of the HRS commission fee, which many hotels complained about.

    From the point of view of the German Hotel Association HRS’s demand of rate parity throughout all online and offline channels of distribution is a massive interference with entrepreneurial freedom and a blatant restriction of competition. Therefore the German Federal Cartel Office’s action fully confirms the submitted legal point of view of the German Hotel Association.

  2. Peter

    The hotel industry will continue to be fragmented, which is the major reason for its weak position when it comes to distribution. But there are quite some possibilites to increase direct sales while still taking the benefits from indirect channels. It is about setting the right priorities and to invest into technology supporting direct distribution, pro-active online marketing and capturing qualified search results.

  3. Guillaume

    Valyn said it all. Nobody wants to take the lead on these ambitious projects. Even the GDS gave up on these.

    How many times did I come around these ideas mentioned by Markus, especially the Unique Hotel Identifier. Talk, talk, talk but no action.

    But guess what, who could be in the best position to start this project ?

    I think Google is. They’ve probably have the most number of hotels listed at least on their Google Maps.

    So associations should start maybe talking to Google Travel and see what’s possible.

    • Markus

      I have my doubts concerning Google as initiative leader due to their business modell, not due to their abilities. Several hotel associations are of course in contacts with Google and export of first-hand data from the associations to Google has already been started. but will this help out of the Prisoner’s Dilemma?

  4. Valyn Perini

    The key to success of any initiative to aggregate hotel information is the buy-in and, more importantly, participation of hotels and hotel companies. So far, most initiatives like this have not been led by hotel companies, which means hotels don’t have control over their own data.

    I would encourage Marcus and the members of his organization, and other organizations like his, to not just ask for a solution but play a leadership role in building the solution.

  5. RobertKCole

    I’m not so sure about the Wiki idea, but establishing a Unique Hotel Identifier (often referred to as the UGI or Universal Global Identifier by HTNG, HSMAI, OpenTravel & HEDNA) would be a huge step in the right direction.

    There are huge benefits – simplification of syndication & synchronization of content updates; the ability to better discern accurate information among various data stores; more accurate identification of hotels through name/branding changes; better delineation of ownership, management and brand affiliations; plus the ability to more efficiently cross reference distribution channels and inventory/pricing sources.

    Due to the incredible fragmentation of both the supply and distribution sides of the industry, compounded by the trend toward unit-based as opposed to property-based selling (Room77, VRBO, Airbnb, etc.) the landscape will get much more confusing before it gets simpler.

    I see it as working a lot like domain name registration – identifying the point of control/ownership over a particular identification number (the IP address for a domain v. the UGI for a property/lodging unit) with services built around the unifying index.

    This has been a good idea since 1990 – now may finally be the time when the industry can justify a coordinated effort. The best part is that while it levels the playing field, it also simplifies processes for all participants in the lodging distribution ecosystem – hard to see who winds up as a big loser under this scenario.

    • Markus

      1990 – I didn’t know that the basic idea is that old… It’s high time now to start and the implementation of non-commissioned direct booking links might be the determining argument now. Can we succeed in uniting the existing initiatives?

  6. Smellthecoffee

    What’s the expression ‘you make your own bed and sleep in it’? How apt for hoteliers. In my experience to date most hotel ‘marketing managers’ are completely closed to new approaches and models, to online marketing, to understanding Analytics and where their business comes from, to valuing direct traffic, to implementing tracking codes/goals/channel filters, to still relying on tour-operators, to anything but the old ‘commission model’, i.e. resentful towards anything which involves spending upfront.

    And the little bit I have seen is, generally, pitifully mis-managed Google Adword campaigns lining Google’s coffers for terrible ROI, and lack of management of their online profiles.

    My experience is in Europe, so maybe this isn’t relevant elsewhere, where valuations of 5-8$ per click allow for non-commission models to develop. Unfortunately, hoteliers baulk and spending on acquiring direct traffic.

    Most hotel ‘marketing managers’ I have met seem completely disinterested in online stats and marketing, or its too technical for them to get their heads round; or they are arrogantly dismissive of anyone elses’ ideas but their own as they’ve been to ‘hotel management school’. I have lost count of hapless marketing managers, beligerent ‘old school’ owners who refuse to acknowledge the web is the biggest shopping channel ever, and restrictions on marketing budgets from head-offices.

    I have stopped trying to wait for these people to come round, and forwarding links to articles on Tnooz giving them insights, and am joining the ranks of the OTAs. It is very easy to see how there will be a barrier to direct hotel contact once all the top (20-30) positions in searches are all agencies. And just wait till Google starts charging for Hotelfinder….

    When we know as much as we do about online marketing and distribution we may as well capitalise on it, the hoteliers in general seem totally blind and uninterested to anything but commission; I can’t wait forever for them, I have a business with top-rankings, with tens of thousands of booking visitors per day on it.

    I don’t know how many (independent and chain) hotels I have spoken to who have ‘no marketing budget’ or who have no desire to spend anything, even after a free trial, proof of direct traffic, and fixed prices. There is little or no desire to portray style, brand or differentiate themselves, so its just a fight on price, which is a fight to the bottom. Most hotels are just a commodity now.

    There are I’m sure there are tens of calls on hotels each day for products/services which don’t deliver sufficient ROI, which I am sympathetic to, but many hoteliers have no knowledge/measures/desire/time for how to sort the wheat from the chaff. A quick free trial and analytics analysis will sort the best sources.

    For the amount of work that goes in, the understanding, for the reinvestment and innovation 15-20% commission is the minimum I would expect; and I have started getting it.

    I hope I am not tarring all hotliers with the same brush and that there is some hope for you. The rest of you need to wake up and smell your own freshly brewed coffee, or put up with the fees.

    • Markus

      You might wonder that I share most of your analysis, especially concerning the adherence to the distribution dinosaur ‘commission model’. We as hotel associations certainly have to intensify our awareness campaigns, and therefore: Please continue to contribute in the industry’s kitchen, dear Smellthecoffee!

  7. Vincent

    I agree. Directories are natural monopolies. Information natural monopolies should be open sourced. (Infrastructure natural monopolies should be public)

  8. Bob

    Because your problem isn’t creating the distribution, it’s affording the cost of supply sign up and marketing. Without the fee income you’d have no way to market your wonderful free service and compete with the likes of HRS or booking.com….unless by some magic you all decided to exit from the aggregators at the same time…your new “free” wiki would become lost in obscurity.

    Surely the better way is to make sure that actually more paid for aggregators come to the market driving consumer choice. In a market that is more fragmented any one aggregator finds it much harder to raise fees aggressively. You should go out of your way to support the growth of smaller players so that the big boys have less leverage on you.

    • Sascha

      When you read Markus’ article, he is suggesting to create a free wiki with hotel information that allows any and all aggregators to have easy access to the same content. This will allow smaller players to more easily create their offering and compete with the big boys.


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