Hotel operators should be grateful for the bookings brought to them by online travel agents (OTAs) rather than complaining about commission payments, the CEO of Viceroy Hotels and Resorts has said.
Speaking from the company’s newly opened $1.17bn property on Dubai’s Palm Jumeirah, Bill Walshe suggested that many hospitality organisations were speaking of bookings made through sites likes Expedia and Booking.com with regret.
However, he suggested they should appreciate the additional business generated out of markets where they have often “put in absolutely no effort themselves”.
“If an OTA spends millions of dollars creating their brand portfolio in a market where I have not done so and the result of it is they are promoting my brand on my behalf and a customer in that market says I’m going to stay in the Viceroy I’ll write the commission cheque with a smile on my face,” he said.
Large hotel groups are increasingly seeking to cut online travel agents out of the equation so they do not have to pay commission – typically ranging from 15 to 25 per cent – on every booking.
Among the main motivations for Marriott’s $13bn acquisition of Starwood Hotels and Resorts Worldwide last year was believed to be the substantial direct business the group could generate with its 5,700 properties and combined 85 million rewards members.
“I can’t speak for other hotel companies but the Viceroy culture is as my mother brought me up to believe – you say please and thankyou,” said Walshe.
“There are a multitude of people in our distribution line who provide business to our hotels and I think it would be disingenuous to accept a reservation from a third party provider and regret it being there.”
Walshe is in Dubai for the official opening of Viceroy Palm Jumeirah, which took place on March 31.
The Miami-inspired property, comprising 477 rooms and suites and 221 residences, includes what is claimed to be the world’s largest all glass cube in its entrance lobby structure and the longest pool in the UAE.
Walshe also said it is the first hotel in the world to be served by cars from electric vehicle manufacturer Tesla.
“I think there are a lot of nervous luxury hotels within our competitive sphere right now who have seen us arrive and know we’re going to take their business,” he said.
Viceroy also operates another UAE property at Abu Dhabi’s Yas Island Grand Prix circuit and has a third hotel planned at Dubai’s Jumeirah Village Circle with Palm Jumeirah property owner SKAI.
Globally the group has 14 properties in operation.