Hotels turning away from GDS to third-party sales

Third party websites now accounting for up to 40% of ME hotel sales

Arabian Courtyard Hotel & Spa general manager Habib Khan.
Arabian Courtyard Hotel & Spa general manager Habib Khan.

Third party website sales now account for up to 40% of the total sales of the majority of Middle East hotels, reports a survey by Hotelier Middle East.

The recently published Hotelier Middle East GM Survey 2013 revealed that 61.9% of participating general managers admitted that third party websites represent between 10-40% of their total sales. This is in comparison to 52.4% of general managers who state that Global Distribution Systems (GDS) account for only 0-10% of their total sales through e-distribution channels.

Commenting on this year’s results, Arabian Courtyard Hotel & Spa general manager Habib Khan said: While it may differ for brand hotels, being a self-managed hotel we do agree that third party websites are much more productive than GDS. Our share from the GDS amount to 4% while the contribution from the third party sites amounts to almost 45%.”

“Third party sites have become an essential business channel because of their ability to analyze and act swiftly to customer behaviour. However, its overwhelming success is not necessarily commercially good for the industry because most of the profit is sucked by the third parties, with their charges being sometimes three times more expensive then GDS,” he added.

The findings of the survey also reveal an increasing trend towards third party websites in the higher brackets of sales percentages, with the amount of managers who receive 60% or more of their sales through third party websites double that of GDS, at 6.4% compared to 3.2%.

Looking to the future, Habib Khan also predicted that GMs will increasingly find ways to drive first party business to their hotels, with technology and social media playing a key role.

“Third party sales may continue to dominate the industry for a while but in the long run the industry must look to new and convenient technology, such as mobile applications and social media to drive business to their hotels; all the while investing in search engine optimisation, electronic marketing and e-commerce.

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