Commission fees and a fear of relying too much on online travel agencies are two of the major issues that are troubling independent hotels in Europe.
Those are some the findings from a major study from Phocuswright into the European non-chain accommodation sector, looking at the challenges many face as they work with online travel agencies but also try to attract direct bookings.
The research was presented at the Phocuswright Europe conference in Dublin, Ireland, last week.
One of the most important elements of the independent hotel sector in Europe is its fundamental difference to that of its counterpart in the US.
For example, Europe has twice the number of independent hotel rooms than the US, but indies state-side generate twice as much revenue per room.
In terms of their online penetration (for bookings), it's just 36% for European indies compared to 43% for the US.
But what about the distribution strategy of independent hotels in Europe?
Phocuswright found that the opportunity to have instant booking on TripAdvisor is an aspiration for many properties, not least at the expense of the online travel agency channel which is expected to be used less by hotels in the future.
Yet, dependence on online travel agencies is much higher in Europe than in the US, with 71% stating that they have a reliance on OTAs compared to 52% in the US.
To the thorny question of whether indies consider OTAs as "fair partners", those who said "yes" pointed out the following reasons:
- The only way to gain visibility online
- Important partner to fill empty rooms
- Consumer needs OTAs
Whereas from the "no" camp:
- A few players have too much power
- Commissions are too high
- Hotels can never compete with OTA marketing budgets