Disruption, loyalty play major roles in distribution

By Jeff Higley

WASHINGTON—The ever-changing hotel distribution landscape continues to regularly alter the way revenue specialists think—and that’s not going to change any time soon, according to panelists on the “Reordering the hospitality universe” session at last week’s Revenue Strategy Summit.

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“The core issues of distribution, acquisition costs, where we put things on the shelf … all that stuff stays the same,” said moderator Andrew Rubinacci, president of AMR Hospitality Consulting and former SVP of distribution and revenue-management strategy for InterContinental Hotels Group. “It’s the players that change.”

Ash Kapur, SVP and chief revenue officer of hospitality for Starwood Capital Group, welcomes the so-called “disruptors” that continue to emerge in the hotel space. It’s a positive because they create more distribution options for hotels, he said.

“I can now pick and choose who I want to work with from an online distribution standpoint,” Kapur said.

The emerging platforms often show hotel companies consumer patterns that eventually force them to make big decisions, he said.

“We are living in a generation that we love marketplaces,” Kapur said. “Hotels have to decide very quickly: Either they become a collection of brands that mean something or they become massive marketplaces.”

Rubinacci said the situation that’s developed in the hotel industry can be described as stay brands vs. booking brands—and booking brands such as Expedia and Booking.com have in many cases gained the upper hand against traditional brick-and-mortar brands.

“You’ve got to start competing on the booking brand … there’s so much value to be gained from it,” Rubinacci said.

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“At the end of the day, a disruptor is really an innovator,” said Alexander Pyhan, VP of distribution-OTA, meta and wholesale for Marriott International. “When you use the example of Uber, they have addressed a consumer need before the consumer even knew they had it. That’s why Uber is very successful.”

Brian Berry (left) of Cvent, said true disruptors in the lodging space introduced new business models that require technology to exist. Also pictured is Alexander Pyhan of Marriott International. (Photo: Jeff Higley)

Brian Berry, SVP of sales and data analytics for Cvent who spent 26 years working for hotel companies, agreed.

“The true disruptors in the space—the Ubers and Airbnbs—are truly disruptive because they introduced new business models that require the technology to exist,” Berry said.

Disruption in the industry will take many forms, the speakers said. There will be more consolidation in the hotel industry with big companies joining forces to compete with a marketplace mentality, according to Kapur.

“The winners in this space will be ones who can be attached to a marketplace and also give the consumer something more than a loyalty program ... a reason to stay with them,” he said.

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