Internet Intermediaries Face Uncertain Future

If you needed any more evidence that the intermediary market is disappearing, you only need to look at the latest info from Hilton Hotels. The company has just reported that it expects to get $2.5b in online bookings for this year, compared with just over $700m four years ago. The Internet is now the single biggest source of bookings for the Hilton Group. However, tucked away in the Hilton report is the fact that the number of bookings coming through third party agencies has remained flat at merely 3% of bookings. So, in spite of the huge growth of online agencies for the hotel and travel markets, they appear to have done little to boost the bookings. What this means is that such intermediaries are spreading their available business more thinly. Most people booking hotels now go direct to the hotel web site, assuming they are a big brand. Where the intermediaries can do well, in the short term, is in the private hotel sector. But as online branding and search improves, the need for such agencies will inevitably diminish. The Hilton report shows us that with good branding you don’t need intermediaries any more, unlike the days of offline only business where they were essential.