Hotels sell a great deal of their inventory by means of third party distribution through the use of technology and marketing intermediaries. More recently the Internet along with other emerging technologies has offered the potential to disrupt enduring distribution arrangements. The question of strategic change is important as the low-cost, multi-channel possibilities offer considerable potential benefits to hotels, but these are also linked to considerable risks. The focus of the study is on the drivers behind the choice of distribution intermediaries by hotel groups. A research questionnaire designed to establish the factors influencing hotels' choice of intermediaries, was developed from the extant literature. Subsequently principal component analysis uncovered an overriding factor, (referred to here as 'risk preference') which is shown to influence heavily channel strategy choice. This indicates the concern by hoteliers over the impact of negative direct or intermediary-related performance on hotel brand image and reputation. The results of this study further support the theory that the hotel industry has yet to define a strategic direction that will leverage the capabilities of the Internet.
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