Melissa Maher is vice president of lodging strategic accounts and industry relations at Expedia, Inc., which, through its Expedia, Hotels.com and other online travel brands, provides hotels a multi-brand, multi-channel, global travel marketplace where travelers and travel suppliers come together. In the following article, Maher offers Expedia's perspective on the need for greater dialogue about optimal channel mix in hotel marketing and distribution. She shares the company's interest in the forthcoming Hotel Distribution Channel Analysis, a report from the AH&LA and STR, and published by the HSMAI Foundation, scheduled to be released in September. As a data-driven and analytical culture, Expedia views research and analysis as reliable tools to help chart the course for our business and the way we will serve our travelers. We frequently share findings from our vast collection of travel booking data with our hotel partners to deliver strategic insights to their businesses. We have long encouraged hotels to take advantage of this data to assess the true costs and benefits of our marketplace and determine ways of maximizing the value they get from working with us. We therefore await with great interest the forthcoming Hotel Distribution Channel Analysis from the AH&LA and STR. We believe that greater dialogue about the costs and benefits of all channels will help unearth strategies for maximizing profitability in marketing and distribution. We have found some of the preliminary findings to be enlightening, and others to be somewhat biased. In particular, it has been asserted that OTAs cost the U.S. hotel industry approximately US$2.5 billion during 2010. The study authors concede that the number assumes all of the rooms sold via OTAs during 2010 would instead have been sold on brand.com or property direct – a highly dubious if not entirely impossible alternative to the reality – and that the number does not include the costs associated with booking on the brand.com or property-direct channels. The flip side of that number is the more than $7 billion in revenue that OTAs drove for the hotel industry in that same year, on top of the investment OTAs make in promoting travel, destinations and hotel brands through benefits like: - Online and offline advertising - Customer support and operational costs that OTAs handle on behalf of hotels - Incremental demand that OTAs generate in the form of international in-bound travelers who would never have landed in many of the properties they did were it not for OTA international presence and marketing efforts. We are keenly interested to see the methodology and variables the study authors used to make a balanced assessment of the true costs to hotels of every marketing and distribution channel, such as online and offline advertising and loyalty program costs; franchise fees; IT and e-commerce infrastructure for Brand.com; and credit card transaction fees and related costs. It is no easy task to deliver an apples-to-apples comparison of distribution channels that vary so greatly in terms of the demand levers and marketing value they provide. In addition, given the great diversity of property types and business objectives within the hospitality industry, we're hoping that this study will provide some meaningful guidance despite cutting a broad swath. We are heartened that the contribution of Tourism Economics to the study might ensure the influence of sound economic theory in the ongoing dialogue. In HotelNewsNow coverage of the recent STR Hotel Data Conference, Tourism Economics' founder Adam Sacks was quoted as "pointing to economic theory that states intermediation improves transparency, efficiency and is better for the consumer-and therefore better for the economy as a whole." With travelers as the lifeblood of our industry, this is certainly a discussion we hope to see fleshed out further in the report. It is likely that the study will raise additional questions and point to the need for further research to expand on the baseline information of this pioneering effort. We look forward to subsequent studies that will seek out data from the vast population of hotels that were not invited to participate or that do not currently have the capabilities to submit data to the study. As the industry continues to evolve, Expedia remains committed to delivering value in the form of: - Unmatched international demand - Channel diversity within a single global marketplace - Dynamic pricing tools for accessing specific travelers - Deep market and property-level insights, and - The strategic counsel of our experienced hotel market management team. Our productive and fruitful relationships with thousands and thousands of hotels around the world fuel our passion for delivering incremental business and efficient results to increase the profitability of our hotel partners. In our endeavors, we welcome the deeper dialogue that AH&LA and STR are helping to spark through research like the Hotel Distribution Channel Analysis.