Coping with reintermediation: the case of SMHEs

Abstract

The structure of hospitality distribution has experienced profound changes within the last few decades. With the evolution and spread of internet, a substantial number of consumers started to use electronic channels for hotel bookings. This has resulted in disintermediation of traditional offline travel agencies. Yet, it has also initiated a new type of middleman to emerge and grow. Much powerful than its former version, online travel agencies (OTAs) bring about some benefits but also challenges particularly for small and medium sized independent hotels (SMHEs). This paper focuses on the difficulties SMHEs face during this transformation. The characteristics of SMHEs, the evolution of channels and the role of OTAs were discussed based on a qualitative study. 22 SMHE managers were interviewed about their perceptions of OTAs and challenges with reintermediation. Based on the data the challenges were grouped under; complexity, dependency, unfair competition and commodification. Solutions to complications of reintermediation for SMHEs and directions for future research are suggested.