02 July 2008

OTAs to get reprieve for another year as Hotels hurt

You would think that with the airlines cutting back on flights that the OTAs will be in a world of hurt. Well apparently not so.Humour me here!

The value of the OTAs to the airlines whether content or zero content based has been diminishing over time. Now with capacity in the Domestic US market headed for a major cutback then the airlines "Don't Need No-BODY!!!!"

So they are not going to play ball on giving deals. This is rumbling in contract negotiations throught the market.

However the hotels are in a completely opposite situation. As the airlines cut back they need to fill the vacant rooms. It is a heck of a lot harder to handle cutting back capacity in a hotel than for an airline.

So the hotels will be desperately seeking new channels of distribution... headed straight for the arms of the willing OTAs.

For sure the period from the days immediately after Labor Day are going to be a lot different for the Hotel market than in prior years. First up - lets see what the rates are for Fashion Week in New York. Sure as heck anyone charging like last years rates will look a little silly. (If you are being asked those astronomical rates than contact me and I will give you some options you may not have thought about.

However what happens when capacity comes back in the airline market?

This is going to be interesting as we enter another phase of the evolution of travel distribution



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