Evolution or Sell Out – Is the Industry Supporting agents?

Evolution or Sell Out – Is the Industry Supporting agents?

Whilst agents lament attacks from media, WebJet and poorly researched ABC TV shows, should they be looking to their own industry for support?

“They just shouldn’t be doing it….why would Air New Zealand partner with Expedia?”

It was the second line from a customer last month, upset with the airlines move to partner with the online accommodation beheamouth.  Why?

Nothing new.  This agents beef?  The money from ticket sales isn’t as strong as it used to be, Expedia is eating away at the agents business by not only going direct to customers but perception is that their commissions have been cut. These partnerships makes it harder for agents to carve their niche into the equation.

It’s symbolic of the early phases of more travel companies trying to take their product direct to the market.  It’s an evolution, not a revolution. A sign of things to come.

Meanwhile in Siem Reap, former number one Hotel has taken things a step further.  Siem Reap is a tough, tough place to run a hotel. I know as I saw my mum worked through the highs and lows of keeping rooms full.  It’s an over serviced market fiercely governed by massive spikes interspersed with long, boring, hot lulls.

Most hotels hire and fire with the tourist periods and when things are quiet, the staff go back to their villages. Peak tourism periods do more harm than good.

But Shinta Mani was different.

Under the careful watch of Christain De Boer (now running the stunning Jaya House) an eye for detail, service, nurturing of his local workers and contribution to local community saw Shinta Mani charge a premium at nearly double the city average occupancy.

With flagging occupancy, the new managers have taken it a step further; beyond direct sales, their total allocation has been sent to a deal site.

At less than half the rate.

These deals negatively impact local communities and bypass agents , if not the traditional travel industry, altogether. Local ground operators get wiped out overnight by foreign companies, in this case based in Victoria, to create deals.

At the same time, the brand equity of the property takes a massive hit.  Gone is a reputation of luxury, service and caring.  Instead is the offer of, low margins, high occupancy and a place in the crowded pool of properties playing the discount game.

Differentiation? Gone. No one wins a pricing war

But airlines partnering with AirBnB is both the revolution and a sign of the times.  These fast moving partnerships actually a move to cut out players like Expedia, even though they have their own version of AirBnB.

Partnering with AirBnB cuts out another traditional part of the chain – hotels.  It’s a business model which excludes not just partners and sales channels, but an entire product offering. A few years ago and impossible consideration

Selling out or progressing? Or merely just survival in a rapidly changing travel world?

 

 

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