TAAP is the latest OTA challenge

Expedia’s Travel Agent Affiliate Program might be great news for travel agents, but it could mean a raw deal for hotels.

The program, referred to as TAAP, opens up the online travel agencies’ global hotel inventory to offline hotels. The travel agents also can earn commissions on hotels, packages and activities.

Similar Expedia programs already exist in Europe and Asia. Expedia did not return a request for comment on the program.

OTAs have been a hot topic of conversation this year, especially regarding their treatment of occupancy taxes. And this latest move has already generated some wariness within the hotel sector.

Bharat Patel, chairman and CEO of Sun Development & Management Corporation, said TAAP will have a “huge impact” on the industry.

Hotels already are at the mercy of the OTAs when there are last-minute rooms that need to be sold.

“We already have … a battle of rates,” Patel said. “It will lead to rate erosion even more.” He also questioned how the commissions for travel agents will be structured.

What it means for brands

Gerry Chase, COO of New Castle Hotels & Resorts, said a quarter of the business generated by his company’s 26 hotels can be directly tied to OTAs, so he has a vested stake in how TAAP plays out.

“They’re our best friends and maybe our biggest concern,” he said.

This is also potentially bad news for brands.

“Brands will become irrelevant,” he said. “They (OTAs) will start assigning their own star systems.”

To stay relevant, hotels are going to have to state their case on how they are unique. “We cannot blend all the things we do,” Chase said.

The downfall of GDS?

Global Distribution Systems also could be in some peril, Patel said. Why pay for that information when you have a vast array of hotel properties at your fingertips through Expedia, he reasoned. “It could spell a doom for GDS,” he said.

Chase, however, said GDSes aren’t going anywhere.

“It will continue to be a dominant source,” he said. “… The industry can’t afford to dismantle GDS.”

At the end of the day, Chase said hoteliers need to take this latest development in stride and continue focusing on providing quality service to guests.

“It’s going to happen anyway,” he said of the growing OTA influence in the sector, “so we will have to embrace it.”