By Andrea Daniels, Director of Distribution, IHG Hotels & Resorts, Member of the HSMAI Global Distribution Advisory Council.
The hotel distribution landscape faces a potential transformation, driven in part by the entry of fintechs and large banks. As the industry looks to the future, a number of other key factors, including artificial intelligence (AI), data privacy, regulatory changes, and evolving distribution channels, could shape global marketing strategies. hotel distribution.
Below is a summary of what was discussed at the HSMAI Distribution Council meeting recently:
- Fintechs and big banks – The participation of fintechs and large banks in the hotel distribution scenario is an indicator of the growing opportunities in the market. The entry of banks into the distribution derives from the potential profitability and the flow of money within the sector. While the industry is still in the early stages of bank involvement, its presence is expected to drive significant changes in the coming years.
- Regulatory changes: Regulatory and legal frameworks are evolving, affecting all parts of the travel distribution industry, and the effect on key players in this space is particularly notable. Around the world, governments are implementing regulations that affect the distribution landscape, and these regulatory changes will influence the strategies and operations of hotel chains and companies throughout the distribution ecosystem, causing them to adapt to the new compliance requirements and consumer privacy concerns.
- Data Ownership and Ownership: The intersection of ownership and data ownership in the distribution raises complex questions about the sharing and control of information between organizations. As AI becomes more involved in code generation, information ownership becomes particularly important to businesses. Industry stakeholders should try to address these issues proactively to establish transparent and mutually beneficial agreements, although more regulations related to data governance and privacy may emerge as a result.
- AI in distribution strategy: AI is poised to redefine hotel distribution strategies. From price optimization and inventory management to personalizing guest experiences, AI can provide valuable insights and streamline processes. In the context of distribution, it can be used to identify the most effective channels, target specific customer segments, and drive revenue growth. However, privacy and data governance issues must be addressed to ensure responsible implementation of AI and protect sensitive customer information.
- The rise of attribute-based selling (ABS) and emerging technology tools: The hospitality industry's exploration of ABS reflects a trend toward more sophisticated sales methods. While there are implementation challenges, this approach promises to deliver personalized offers based on specific attributes, increasing customer satisfaction. In addition, emerging technology tools indicate a changing landscape, which could lead to cross-channel integration and greater economic benefits. By embracing changes in technology, streamlining operations, and adapting to evolving regulations, the industry can benefit from reduced costs and increased profitability. Collaboration, innovation and forward-thinking strategies will be key to staying competitive in this evolving landscape.
Based on discussion with HSMAI advisory board members, here are 9 predictions and trends for hotel distribution in the coming years:
- 1) Emergence of a mega platform, not just in travel, which crosses travel industry lines.
- 2) Looking inside the organization, the expectation of franchises and the delivery of great brands will be more important than ever.
- 3) More consolidation and trying to cut costs.
- 4) Initiatives will cross between players, who will fight to increase their market share. It will be the evolution of 'everyone sells everything'.
- 5) Look what generative AI will bring to us: it could be a wonderful experience for the guests.
- 6) Rise of super apps: opportunity to generate income. All distributors assumed various roles. Who else is going to get into this?
- 7) The industry has seen some crossover between segments. We are now seeing fintechs allowing entry into the OTA space. How do we preserve the business when these segments intermingle?
- 8) There will be a push towards better technology: it will be about connected trips from start to finish.
- 9) AI will enter distribution platforms.
Stay tuned!
