ABSTRACT
Technology is said to precipitate change in vertical structure as it changes information and modularises a production process. Nowhere is this more prevalent than in the distribution channels for branded hotels where the entry of online intermediaries has been transformative in industry evolution terms. As discussed throughout this chapter, distribution is an increasingly confusing aspect of the value chain.
The chapter discusses the moving intermediation landscape and the strategic differences between hotel chains and technology companies providing digital distribution systems. It also evaluates respondents’ views on the competitive and financial implications of the entry of distribution providers who are said to be taking revenue out of the industry and eroding real estate values. Online distributors have been able to gain the most profitability – controlling the interdependent linkages in the hotel value chain – linking consumers with hotel venues. To many respondents the war with online distributors is therefore thought to be lost.
Whilst the relationship between technology and hotel chains continues to develop and grow, all the time it is pushing the latter to have to become even more focused on being brand, distribution and marketing companies; dedicated service providers (with expertise also in technology) rather than hotel owners and operators.
