Electronic Distribution of Hotel Rooms–An Exploratory Study of the European Hotel Industry

Abstract

ABSTRACT Hotel groups have built up experience in distributing rooms electronically. More recently, the Internet has provided the opportunity to disrupt the traditional value chain, potentially disintermediating established providers, whilst presenting hotels with an unprecedented array of routes to market their products. The need for channel management expertise has become more acute than ever. Along with the need to understand consumers' online attitudinal preferences and concerns, we argue that there is a need to examine hotel providers' apparent slowness to take advantage of the new media. A research questionnaire, designed to establish the factors influencing hotels' choice of intermediaries, was developed from the extant literature. Principal component analysis uncovered an overriding factor, (referred to here as “risk preference”) which is shown to influence heavily channel strategy choice. This indicates the concern by hoteliers over the impact of negative direct or intermediary-related performance on hotel brand image and reputation. The results of this study further support the theory that the hotel industry has yet to define a strategic direction that will leverage the capabilities of the Internet.