A major hotel group has pulled its inventory of rooms from two aggressive third-party websites, in a move that foreshadows a possible conflict between airlines and internet distribution channels.

InterContinental Hotels Group is to drop both Expedia and hotels.com because of the policies of the two websites. It objected to the refusal of the sites to make room availability fully transparent. If the websites, which had already bought large blocks of rooms in advance at volume discounts, had no more of their own holdings of rooms, they would tell customers that no rooms were available and the properties were sold out.

The InterContinental Group, with 3,500 hotels and 500,000 rooms, argues that if the websites had no more rooms, the appropriate step was to send the traveller directly to its own website, where rooms may have been available.

The move threatens the merchant model under which third parties buy rooms or aircraft seats at their own risk. Despite an element of risk, merchant margins can sometimes be 20% or more.


Source: Airline Business