Love and hate relationship between hotels and Online Travel Agencies - an investigation into contemporary revenue management in 4 and 5 star hotels in Edinburgh.

Abstract

Online Travel Agencies have an increasingly important role to play in modern day distribution channels of hotels. However, they remain as competitors to the hotels due to their high commission rates and increasing success. The present study explores the relationship between hotels and OTAs in terms of their perceptions of each others and any challenges between them. Through qualitative research methodology, semistructured interviews with four 4 and 5-star hotel managers and one OTA hotel account manager were conducted in Edinburgh. The research findings show that a lot concerning the relationship between chain hotels and OTAs is happening on company level rather than property level such as the contracting and acquisition. The main OTAs hotels cooperate with in Edinburgh are Booking.com and Expedia as well as a few smaller scale and local OTAs. Research results demonstrate that the overall relationship between hotels and OTAs is positive; however minor challenges occur in terms of getting in contact with the OTAs, rate parity and acceptance of OTAs. Whereas hotels see OTAs are both, partners and competitors, they have recently started to put more effort into attracting direct bookings through their own websites by offering discounted rates for loyalty program members. The aims and objectives established for this research have been bet throughout the research. However, the paper concludes with recommendations for future research to further explore the challenges arising and make suggestions to improve the relationship.