Direct booking: outlier or emerging trend?

Direct booking: outlier or emerging trend?

For decades airline and hotel brands have benefited from the broad distribution and customer accessibility afforded by travel management companies, corporate agents and online booking websites. But now a handful of major industry players seemingly want change how consumers and business travelers purchase their services by applying a fee, or distribution cost charge as it is sometimes known for all indirect bookings.

While it is a change from business as usual, the concept of direct booking is nothing new. Long ago, a direct phone call was the only way one could make a reservation. But some of today’s companies have thrived using this model, including Southwest Airlines, which exclusively sells seats through its direct agents and via southwest.com.

So, who’s doing what when it comes to direct booking? Here’s a breakdown of some of the recent big moves in the industry:

Lufthansa Group
Perhaps one of the boldest and most visible moves of the summer toward an all-direct booking model comes from Germany-based Lufthansa Group (LG), affecting all four of its airline brands (Lufthansa, Austrian, Brussels and SWISS). For any ticket not booked directly through its website properties, call centers or ticket counter agents, LG will apply a fee of $18 per ticket. Understandably, the company has met significant resistance from TMCs, online booking sites and others. Some even questioning the legality of such fees. However, it looks like LG will proceed as planned with fees starting September 1.

Google
Yes, search engine and advertising giant Google is getting into the hotel business. Well, sort of. The Internet pioneer recently added assisted booking capabilities available at google.com/hotels. The idea is simple: fewer clicks for users means increased bookings. So, now instead of bouncing a off to another site to book a room, users can complete the transaction through the same familiar Google interface.

TripAdvisor
Similar to Google’s approach, TripAdvisor now offers an “Instant Booking” option that reduces the company dependence on third-party sites such as Expedia and Priceline. Initial industry response was cool, but it appears the service is now finally gaining traction. TripAdvisor enrolled Marriott earlier this summer, providing direct booking access for its more than 4,200 hotels around the world.

Marriott
In addition to joining TripAdvisor’s Instant Booking, Marriott recently ran a national television advertising campaign praising the benefits of booking direct. Raising the eyebrows and ire of TMCs and industry associations alike, Marriott’s #ItPaysToBookDirect campaign suggests consumers can access the most accurate rates and hotel information only by using its website or reservation call center. A questionable approach, maybe, but the goal remains the same: get more people to book direct.

Who makes the next move toward direct booking is hard to say. But where profit is the goal, should the companies listed above be successful in their efforts, you can be sure that others will soon follow.