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Wednesday, December 29, 2010

The hubbub over American Airlines online

I find it interesting that the travel industry, and online travel in particular, believes that it has the birthright to display 100% of all travel supplier content. Conversely, that suppliers should take for granted that all distribution channels should have the obligation to distribute their products on their terms.

In any other retail environment, there is no such expectation. While I would like for Walmart Neighborhood Grocery to carry every brand, the vendors have to agree to Walmart's terms in order to be on the shelf. And just because Procter and Gamble want their soap products on Target's shelves, Target is under no obligation to give them shelf space if it prefers to instead sell their generic brands.

Distribution relationships, or should I say healthy distribution relationships, are based on two parties that value one another.

Demand aggregation is a key role of distributor. Expedia and Orbitz spend millions annually to drive visitors to their sites. They have the rights as free market companies to name their terms and to value the shelf space. Likewise, Ameerican has the right to decide where their products are sold.

Just don't cry over distribution relationships that a strained and even destroyed when you figure out later that your own distribution channels are not free.

And online players, when the AA loyalists boycott visiting your site for hotel bookings, don't be surprised.

Next we'll revisit the 'lost love' between traditional distributors and travel suppliers.

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