Viewpoint: Price integrity must be honoured by third party sellers

07 November 2019 by Carlos Munoz

Hotelbeds managing director Carlos Munoz explains why the demise of Amoma provides an opportunity for third parties to better serve the interests of hoteliers

The issue of rate parity and price integrity has been a subject of discussion for many years, however the recent collapse of the online travel agency Amoma has raised questions about the travel distribution eco-system and the role bedbanks play in providing business to consumer sellers with discounted rates.

Over the last couple of years our business has continued to expand with the integration of Tourico and GTA. As a result of this we have gained greater insight and understanding of the needs of their hotel partners and aligned their business strategy accordingly.

We understand the need for hoteliers to efficiently and accurately segment their distribution across various channels to reach full capacity. Hoteliers require varying support depending on their technology solutions in place. What's more is the access to incremental bookings from high-value guests, in particular long-haul travellers. This is crucial for boutique and independent hotels, which in comparison to the chain sector are more likely to face challenges with limited brand recognition, international appeal and budgets to attract overseas bookings to their website.

We know the UK market is worth protecting. As such we have been reducing sales with companies such as Amoma and other online travel agencies whose bookings have not been made with the hotel's interests at heart.

Hotelbeds offers all hotel partners access to reservations from hard to reach channels such as retail travel agents, tour operators, point redemption schemes and airlines. These are travellers who book further in advance, cancel less, stay for longer, pay more per night, spend more in-destination and repeat bookings. Online travel agents however do not always benefit the hoteliers positively and some break distribution management policies by selling opaque rates intended for offline sales channels such as retail travel agents or tour operators in the business to consumer channel instead.

We have therefore made a financial commitment of forgoing approximately 300 million euros in otherwise profitable sales tor the company because they are not in the interest of hotels. As a result of this and other measures, such as a ‘three strikes and you're out' policy for offenders, to date hotel partners are reporting 0.01% of incidences – down by 90% since last year.

Retail travel agents are crucial to the success of hotel businesses. We are anticipating that their cut-throat approach to OTAs will help wipe out all bad practice to ensure a sustainable distribution eco-system.