Business Travel iQ has spent a lot of time looking at the implications for travel managers of managing different distribution channels in the quest for more content. We have focused heavily on aviation. This week there is a story that prompts us to evaluate how this multiplication of distribution channels is affecting another important sector.
Hotel booking company HRS — which now describes itself as a provider of end-to-end solutions for corporate hotel programmes — and Altour, a large travel agency/travel management company have announced an agreement which enables Altour's global corporate clients to access HRS inventory worldwide. HRS claims to have more than 350,000 hotels in its portfolio, of which about two-thirds or "more than 210,000" are independent properties.
The importance of the deal lies in a single sentence: "That access includes the opportunity to book rooms at hotels that don't participate in traditional booking channels, at rates exclusively negotiated for HRS business clients."
Now, most corporate programmes include both GDS and non-GDS properties so managers customarily source through different channels and it's one of the reasons to use a content aggregator like HRS. But this deal is important because it not only allows Altour clients access to HRS content — it allows them access at HRS rates. These clients will have access not only to a wider range of content but it will do so at lower prices than they might otherwise face and through one channel.
This is really important when you consider both what's happening with airlines and what's happening with companies.
The fallout from IATA's ongoing project to introduce NDC and Lufthansa's introduction of its Distribution Cost Charge (DCC) emanates from cost management issues involved in using either single (easier process but maybe more limited options — or supply of content) or multi (more complex process but a greater supply of content from which to choose) channel distribution and accompanying issues such as what distribution channels a supplier would like its market to use.
Commercials surrounding the HRS-Altour agreement were not disclosed but Altour clients will have more content (more choice of supply), a better price (HRS negotiated rates rather than just BAR) and only one channel to navigate.
And increasing supply is important. Modern travellers want a wider range of properties than their predecessors. Moreover, modern businesses are continually going to new markets in order to grow — that means having to find accommodation in more new destinations with no prior history, knowledge or relationships. That's when it becomes important for a programme to provide a choice of suitable properties at competitive prices.
The announcement is too new to comment on the consequences but it is fulfilling a need — the need to simplify access to more and more varied accommodation content, much of which is not available via a GDS, at competitive prices.
We don't know the commercials but, on the surface, what's not to like?