Will the value of brands remain sustainable in today's distribution age?
— 9 C-Suite executives shared their view
World-class distribution was once one of the key value-adds of signing up with a hotel chain or brand. Today, however, this advantage has been severely eroded to the point where independent properties can access better and more cost-effective distribution channels.
From a distribution perspective, is the era of the hotel chain coming to an end?
Chief Executive Officer at NH Hotel Group
I don´t think the hotel chain era is coming to an end. It's true that clients are evolving though, as are their preferences. There is a much wider offer in terms of product and consumers have more clarity as to what they want as well as access to different ways of managing their reservations. In this scenario, hotel chains must look for ways to attract consumers towards their own channels and retain them by boosting their loyalty.
The great variety of existing intermediaries opens up various options for a client to get to a hotel but once inside, is it our obligation to focus on offering the best brand experience, anticipate their needs, surprise them, and above all, engage them so that their next stay is booked directly through us or, at the very least, to ensure that they choose our property again. In this sense, brand awareness and notoriety give hotel chains a competitive advantage because sometimes it makes clients feel that it is a safer option. We offer guarantees and a specific operational promise which is why many hotel chains will continue to be a reference for many consumers. It is also worth mentioning that hotel chains have at their disposal more resources than independent hotels to reach clients and potential consumers directly. But we must not rely on sales exclusively, great distributors are here to stay and we must see them as an extension of our sales force. We should work with them to help us distribute our product in markets in which we may have less brand recognition and where they can give us a huge boost and added value. With regards to intermediary costs, hotel chains still have more negotiation strength because of our larger portfolios, our geographical footprint and our brand reputation, which gives us an advantage vs smaller hotels.
For the past few years, the trend in the market has shifted towards concentration, both in the traditional travel agency industry, OTAs, airlines and great hotel operations… So, no, I do not see that the time of the hotel chains will come to an end any time soon. Quite the contrary, I believe that we will continue to increase in strength as long as we continue to invest in client experience and technology.