Who’s afraid of the big bad merchant model?
Since the beginning of online distribution, hoteliers have only begrudgingly accepted the role that OTAs play in delivering business to their properties. Most of their complaints focus on the use of the so called ‘merchant model’, and typically highlight how its high transaction cost coupled with the hotel’s loss of control over both rate and availability make it one sided and unfair.
While undoubtedly this was true post 9/11, when certain companies used the merchant model to exploit hotels hurting deeply from the recession. But, in the rapidly developing online world, things have now changed. Despite this, many hotels remain fundamentally opposed to the merchant model, perhaps without really understanding why, and perhaps without truly understanding what alternatives are out there.
