Don’t Cut Agents Out Of ‘Hotel-Direct’ Rates, Analyst Urges

Are hotel chains’ “book direct” programs—which promise better rates and amenities to hotel loyalty members who book on their websites—working? 

Yes, they are, says John Hach, senior industry analyst at hotel technology company TravelClick. But at the same time, the travel-agent distribution channel is more important than ever.  

“Early indications are that hotel chains’ brand-direct programs are having an impact,” Hach said during a webinar on the industry’s first-quarter performance. There has been a year-over-year uptick of 0.8 percentage points, from 25.4% to 26.2%, in hotels’ direct bookings.  

But the GDS channel is growing 60% faster. Hach noted “surprising growth” of 1.3 percentage points—18% to 19.3%—for the GDS channel during the first quarter. He urged hotel companies to “make sure travel agents have access to those rates.”   

“People would have said a few years ago that it’s a dying channel,” said TravelClick director of data partnerships Katie Moro. “I love seeing that large number. It’s typically your higher-rate business.” 

“People tend to think GDS is all about negotiated rates, but there is quite a bit of retail [rack rate] as well,” Hach noted—and the high-average-daily-rate business of the travel-agency channel “lessens hotels’ dependence on discounted business.”  

“What I like about the channel is that the average travel agent books 22 times more hotels in a year than a consumer does,” Hach said. “They are super sellers of hotel rooms. And that doesn’t just play in one city or two cities. It’s truly global.”  

Hach said he expects agents’ revenue production to be strong in the coming year. It’s not just about the rate, he said. Since agents’ customers are often on expense accounts, “there are point-of-sale opportunities in what guests spend on property.” 

Travel agents contribute to both occupancy and revenue, he added.