How Online Tour Operators Cannibalize Hotel Distribution
Hotels with direct contracts with online travel agencies are increasingly seeing bookings routed through bedbanks and tour operators that redistribute inventory back to the same OTAs. This exposes the unfairness of a system that rewards the lowest price over hotelier loyalty and quality. Fortunately, some hoteliers are taking action by terminating contracts with these false online tour operators.
There are frequent cases in which hotels with direct contracts with a well-known online travel agency find themselves receiving bookings from that same online agency via bedbanks, or tour operators acting as such, which in turn distribute to the very same online travel agencies.
The issue is that online travel agencies’ comparison systems compare the price of the same hotel across the different options available to the agency, with the sale then being intermediated through whichever channel offers the best selling price, even if the difference is only a few cents.
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