Article:
Are Websites and Their Cost The Twin Evils
of Small Hoteliers?
Interestingly, my last hotel ecommerce
articles provoked a number of calls from
small hoteliers who thought that their
website was just a necessary evil and not
worth any real investment. That being said,
this weeks article contains an overview of
my thoughts and comments on their concerns.
First, look at the Web sites of major hotels
which now contain vital sales collateral and
real-time online reservation systems. Web
site visitors are now recognized as
potential guests. Even visitors who are not
booking are now perceived as often being in
the important "research" phase of the
shopping process. One only has to view the
changes and upheaval due to e-commerce in
the retail industry to understand and
recognize how extensively the Internet has
and will affect the hotel industry.
The number of reservations flowing to hotels
through the electronic distribution
channels, the global distribution systems
(GDS) and the Internet is growing steadily.
Once a minor contributor of bookings, they
are now primary business sources and grow
more important with every passing month.
This growth has heightened emphasis
throughout the hotel industry on using the
electronic distribution channels effectively
and maximizing their potential. Every
hotelier now faces the challenge of
understanding, prioritizing and managing
these electronic outlets on behalf of his or
her property.
Ask yourself how many of your friends or
relatives refer to the Internet while
planning a trip? How many are influenced by
what they see on the hotel and travel
websites? How many buy online? And how many
of those who buy online today did not a year
ago? This informal survey by yourself of
online growth will readily support the many
published professional surveys conducted by
the hotel industry.
Because, with the maturing of the Internet
there needs to be an increased awareness of
the "overhead" associated with each
distribution channel and such expenses must
come under closer and closer scrutiny by
hoteliers. You must strive to control the
number of rooms that are offered and sold
through each channel if you are aiming to
fill your property while simultaneously
achieving your lowest practical
distribution-related costs.
I
agree, and it is quite understood that any
hotelier’s immediate goal is selling rooms,
yet, while recognizing that the cost of
generating that business varies from channel
to channel, it should also be noted that a
reservation arriving direct to a hotel’s own
Web site may be the least expensive while
the one from a travel agent using a GDS may
be the most.
Thus, when considering the Internet as a
necessary evil and the temptation to limit
consideration of the Internet to how it only
impacts the sale of guest rooms, actually
denies the array of other areas where the
Internet is having a significant impact on
costs, efficiencies and improved margins,
such as: Decreased distribution costs, low
or no-cost communications, sales material,
room descriptions and photos, distribution
of marketing collateral, copies of
advertisements, access to telephone
directories, menus, e-mail accounts and much
more.
Finally with regard to investment, apart
from the aforementioned advantages, a number
of Application System Providers (ASPs) are
becoming increasingly visible in the hotel
systems marketplace. They offer appealing
propositions, such as, monthly rental or
purchase of online reservation software
systems where the system itself operates
remotely and is accessed via an Internet
screen.
Gone are the issues of on-property system
operation, maintenance, upgrades and problem
correction. Rooms, rates, etc., are
controlled easily online by hotel staff, and
visitors to the website can readily select,
reserve, confirm and pay online. There is
no doubt in my mind that the current
negative perception by some hoteliers of
their hotel website will undergo radical
change as they better understand its
increasing importance in their distribution
strategy and the possibilities offered by
the ASP approach to resolving their
investment concerns. -
John Shenton - September, 2002
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