Online Hotel Sales

It fascinates me to watch the evolution of the travel industry in terms of the internet. Traditional travel agencies are being forced to evolve and old systems are being re-evaluated. The industry still hasn’t reached efficiency, such as affiliates making a direct sale to the branded hotel property being paid less than someone who never passes the clients data to the hotel and will try and sell them a competitors services next time around (travelocity etc.). Everyone wants the highest possilbe commission while retaining the maximum ownership of the client possible. Anyway, I stumbled across this article about Marriott in regards to internet bookings and thought I’d pass it along:

In general, the hotel industry faces a threat from Internet reservation channels, which represent a growing share of hotel room bookings. These intermediate channels charge higher commissions and demand lower room rates from hotels, which puts tremendous pressure on the revenues as well as margins of hotels. Marriott has built its own central reservation system to counter this threat from third parties. Marriott is the leader in online hotel room sales with 25 percent of its revenues being generated through this system.

Marriott makes 25% of their revenue from franchising fees - this apparently imples another 25% of their revenue is from online hotel reservations…fairly impressive.