Hotel companies should assess their strengths and weaknesses to inform their future distribution strategies. In areas of weakness, where differentiation isn’t going to be easy to achieve, hoteliers should form partnerships to defend margins. Where a hotel is strong because of customer relationships, data or capabilities, the company might explore kingmaker opportunities with partners across the distribution landscape. In mature markets such as the United States and Western Europe, online travel penetration, according to Phocuswright, is around 50%. Outside those regions, online travel penetration is around 20% to 30% but is shifting rapidly, with average growth rates in the last five years as high as 18%. Third-party online intermediaries deliver almost a quarter of all U.S. roomnights, according to an Oliver Wyman analysis, and each 1% shift from direct channels to commissionable intermediaries (such as online travel agents) will cost the hotel industry about $400 million. Digital distribution is evolving quickly, with Internet penetration, smartphone subscriptions and social-network use projected to grow dramatically in the next decade. An Oliver Wyman analysis shows the majority of Internet users are in developing countries, where annual penetration growth of 10% to 20% is expected to continue. Mobile data traffic will increase more than tenfold in the next four years. One quarter of the global population already belongs to one or more social networks. There are 1.4 connected devices per person today, and that number is expected to reach 6.5 within five years. Get the full story at Hotel News Now