Hoteliers were in buoyant mood at the recent ITB in Berlin, confident that business was picking up slowly but surely across Europe.
After the sharp downturn in business post 9/11 and the dreadful mess they got themselves into, especially in the UK and to a lesser extent in Germany, selling their rooms on the Internet through online reservation agencies, few would begrudge them their improved fortunes.
But have the hotels learnt anything from these harrowing times? The answer is probably ‘Yes' but if those appalling times return who knows what steps a desperate hotelier might take to attract business.
It was desperation which last time drove the hotels into the arms of the online agencies. John MacOmish, director of business strategy for BSI, one of the leading online agencies, said that rates plummeted after 9/11 and general managers were eager to off load rooms to them, calculating that any return was better than none on a perishable product.
Dean Gregory, vp worldwide distribution for Le Meridien, said: “Hotels gave away their inventory because they thought it was safe.”
But the real result was that the onliners made a lot of money out of selling rooms and the Internet became recognised as the channel for dumping business. Worse, from the hotel view, travel managers saw they could get cheap rates this way and the online agencies attracted thousands of clients.
It took drastic action by hotels to get back control of their product with leading chains like Le Meridien, Sheraton and InterContinental introducing a best rate guarantee for those who booked directly on their hotels' websites. To stiffen resolve, managers were also not allowed to off load at low prices. These were the major changes that swung the advantage back to the hotels.
Now with business on the up, this particular phenomenon as Mike Mannix, CWT's director hotels solutions group EMEA, called it, has died down.
But it has not gone away. All side are just re-positioning themselves. There is simply too much at stake. Hotels, while well behind airlines, are corporates' second largest travel spend. But only 60% of that goes on preferred suppliers. The other 40% is ad hoc. It is a huge part of the market to play for.