Hotels Sprint to Become Storefronts Beyond the Room

22.08.2024 - 22:31 / skift.com / Sean Oneill

Hotel chains are quietly developing plans to bypass traditional booking intermediaries, aiming to increase direct bookings from corporations and businesses.

Why it matters: This move could disrupt how business travel is sold today, potentially squeezing out traditional travel management companies and online travel agencies.

Why hotels are pushing for change: Some hotel executives believe they can woo more business travelers to book directly if they provide more interesting offers that can’t be found via third parties. So, they’re working on technology upgrades to provide distinctive offers.

Major hotel chains like IHG, Choice Hotels, Marriott, and Hilton are testing a new pricing and booking process called attribute-based booking.

Hotels are motivated to drive more direct distribution to save money by sparing middlemen’s fees.

Some corporate travel buyers are hungry for change, seeking improved analytics and reporting.

Hotel executives argue that the attribute-based booking platforms they’re working on will help corporations better understand their travel spending than the middlemen’s legacy systems.

In interviews, Navan and HRS said they want to work with hotel groups to adopt the new workflows. These smaller players claim to be seeing interest from corporations looking to adopt more modern technologies. Some hotel executives also hear from corporate buyers seeking change.

The transition faces several hurdles. One is a lack of industry-wide standards for attribute-based booking.

If hotels want to roll out attribute-based booking, they need to revamp their technology to sync smoothly with the often outdated software used by travel managers.

One uncertainty is whether corporate travel managers will like learning new processes. Mastering attribute-based booking would require a learning curve.

Hotel groups are betting that offering more personalized options through direct channels will win over business travelers and corporate clients, potentially reshaping the travel booking landscape.

Business travel is nearly back – but with an asterisk. Road warriors aren’t taking as many trips, longer stays are becoming the norm, and traveler health is a primary focus. So, for those hotels willing to pivot, there’s an opening to snag these lucrative guests.

What am I looking at? The performance of travel tech sector stocks within the ST200. The index includes companies publicly traded across global markets including online travel, booking, and travel tech companies.

The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more travel tech sector financial performance.

Read the full methodology behind the Skift Travel