Research Insights The Critical Role of Independent Distribution in the U.S. Travel Industry

The Critical Role of Independent Distribution in the U.S. Travel Industry

January 2022

The The U.S. travel sector has been badly affected by the COVID-19 crisis, although there are encouraging signs of a rapid recovery. Gross revenue is rallying and full recovery to 2019 levels is expected within the next several years.

Online travel intermediaries are playing a key role in this recovery. Even in the best of times, planning travel is complex. With post-pandemic travelers seeking out more information to reassure themselves about safety, online travel intermediaries play a critical role in reigniting the return to travel. They are particularly important during the inspiration and shopping stages of the customer journey. By creating an environment where travelers can easily compare product features and shop prices, they foster a competitive landscape where suppliers must battle to capture the traveler’s business.

From the consumer perspective, online travel intermediaries play a pivotal role in the travel distribution process. They add value by aggregating disparate supply from multiple competing brands, helping consumers navigate the myriad options available, as well as facilitating the eventual booking process. Consumers particularly value online travel intermediaries for their ability to reduce friction by facilitating the easy comparison of multiple, multi-brand options and prices in a single location; for their provision of objective, unbiased information (particularly user reviews) to aid decision-making; and for their superior user and one-stop-shop booking experiences. With consolidated options available in a single integrated hub, consumers feel that online travel intermediaries make it easier to find, and subsequently book, the travel option most appropriate for them.

Travel suppliers value online travel intermediaries in their traditional role as trusted distribution partners. Many suppliers – smaller players in particular – identify the reach, visibility and additional bookings they gain from working with third-party intermediaries as highly beneficial. In addition to their distribution role, online travel intermediaries are also viewed as important technology partners by travel suppliers. Post COVID-19, few suppliers will have the budgets, in-house technical expertise or other resources to keep pace with technology developments and ever-expanding customer expectations. To counteract this, many are turning to online travel intermediaries, which are increasingly perceived as specialist solution providers with technology as their core competency.

This paper explores the increasingly vital role that independent distribution plays in the U.S. travel marketplace. Download the full report after completing the form below.