IHG, one of the world's largest hotel companies thanks to almost 5,000 properties around the world, can tell us a lot about the direction that distribution is going in.
In a presentation this month, the company shared details of the revenue share between its various distribution channels.
What is interesting is to see how this has changed over the past 10 years and this is shown in this week's chart.
The rise of online travel agents, the likes of Expedia and Booking.com, comes as no surprise and is largely driven by the leisure market.
Bookings made through the GDS — which will typically be the business end of the market — have increased too, albeit by a far more modest amount.
What is perhaps most marked is the changing face of the direct channel. The overall percentage of direct bookings, either made with the hotel, through the central reservation office or via an IHG website, has actually remained constant, at 60%. Yet it is clear that guests are now choosing to book on the web rather than by calling the hotel or walking up to the reception desk.
The company said in its presentation that digital revenues now amount to more than US$4 billion a year. These are increasingly coming from mobile; revenues from this channel are around $100 million a month and this has grown by 50% year-on-year.
Winning business directly and digitally is one of the three main pillars underpinning IHG's commercial strategy (the others being having strong brands that resonate and having long-term relationships with high-value guests). This is because, as IHG freely admits, direct digital is the lowest cost of all of its channels.
Rate parity requirements are now all but dead in Europe so expect this strategy to get more aggressive. OTAs are already being targeted through best price guarantees on IHG sites as shown below.
The GDS channel — and business travel bookings - may well be next.
