As the hotel industry continues to consolidate and multi product businesses absorb more and more single solution companies, hotels chains are starting to acquire an increasingly larger share of the market.

HMS Thailand a company that offers bookings and revenue management support to hotels, as well as hotel technology and marketing services, is in a unique position. HMS has been studying the market and has developed a certain level of perspective about the challenges that lie ahead.

The market will consolidate even further and that hoteliers are going to have to invest in improvements to their services and technology to maintain a high number of bookings and keep their revenue flowing in at the same rate that they’ve become accustomed to.

Challenges in the hotel industry

The sociopolitical events that take place around the world can also have a drastic effect on a hotel’s bottom line. These events lead to the loss of various markets and lead to a steep, sudden drop in demand. As a result, HMS Thailand sees the need for hotels to ensure a long term rate structure that works over the long haul, as well as the short term.

  • Increased Consolidation and Mergers

The hotel market will become even more consolidated and 2016/2017 should see a great deal of mergers in the middle of the market, where there are a number of chains in need of a shake up.

  • The Appeal of Stand Alone Companies Will Diminish

The hotel companies that offer their consumers an all inclusive experience, with a whole package of services and technology, are going to prosper long term, whereas the presence of single service companies will be increasingly diminished.

  • Google’s Mew Launch Is Going To Shift The Market

Google’s next product launch is expected to lead to a major market shift. Instead of worrying about CPC (also known as cost per click), the focus becomes CPA (cost per action). Sites like TripAdvisor are going to feel the pinch, as the transition is made to instant booking.

The growth and diversification of meta-search engines waters down the market for large international chains and influences search results.

The reason for this? A lack of connection to the online booking engine, as well as the channel management business. Online booking engines require a high level of online sales expertise, while the latter requires more support than property management systems are able to provide.

  • Global Distribution System Only Hotels Will Struggle

A global distribution system is no longer enough to guarantee a hotel continued viability. Unless a hotel is willing to integrate global distribution systems as part of a total offering, financial struggles will abound and bankruptcy is increasingly likely.

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