Many Hoteliers are beginning to realise that online distribution is changing the “classic” distribution spectrum. This year over $5.5 billion in hotel bookings will be made via the Internet. Three years from now the Internet will contribute 16%-18% of revenues in hospitality (PhoCusWright, Andersen/NYU).
Caption: Mike Kistner, CIO - Best Western at Hostec with Aidan
Brogan, VP International Sales - Datalex
, the world’s largest hotel brand, is one hotel that has adopted a smart online strategy. Having outperformed their own targets for online bookings relating to 4Q 2002 and certainly boasting a simplified and streamlined website, Best Western continue to seek improvement. In a new partnership, Best Western has selected Datalex
‘s new hospitality booking-engine solution to replace its current per-transaction cost base for outsourced Internet reservations services.
The technology is expected to extend a range of online searching and booking capabilities to customers and travel professionals via Best Western’s global Web sites, connecting travel buyers directly to Best Western’s central reservations system (CRS).
The new system will provide travel buyers with powerful destination search and recommendation capabilities, dynamic links to property information content, and bookings made against real-time room availability. The system also will be linked to Best Western’s loyalty program and will enable the packaging of additional components, such as products and packages, in conjunction with hotel accommodations.
, Chief Technology Officer at Datalex commented on the benefits that Best Western can expect to see from this new platform: “Best Western currently outsources its Internet booking engine and a benefit to it being brought in house is the ability for the company to control its own destiny. Internet distribution is such a key, strategic issue for hospitality companies and with the rapid evolution of technology, having the system in-house will allow Best Western to be more nimble in its response to market conditions and opportunities. It will also be able to implement connections between its loyalty system and online booking engine through the use of interfaces that are compliant with OpenTravel? Alliance standards”.
, CIO & VP Information Systems - Best Western, told Internet Travel News that Best Western’s key requirements for a new booking engine were: “Functionality, flexibility, scalability, interfaces and control of their destiny”.
Unable to discuss the investment made, Mike did reveal that Best Western expect to see a definite return on investment from both a capability and financial perspective.
Mike commented: “As technology relates to global e-commerce, it is one of our highest priorities. It is an ever shrinking world and the results are in; people transact business online, globally”
Mike revealed that Best Western is anxious for a sustained economic recovery, however they expect to see the move towards online bookings continue.
The move to deploy an enhanced booking engine has come at a good time for Best Western. Numerous recent studies have been indicative of the vast expected growth rates of online booking within the travel industry, despite fears of war and an unstable economic climate.
recently delivered a Travel Index revealing that despite the current threat of war and terrorism, the industry is collectively optimistic for 2003 with 83% expecting overall improvement. The majority of respondents (55%) believe that increased online booking will have the biggest impact on the market in 2003.
Forecasts show that on-line travel sales will grow from 4.5 billion Euros to anywhere between 12 to over 38 billion Euros by 2006. The reality is likely to be somewhere in between.
According to OTC`s CEO Mark Jones
, there are still reasons to be cheerful in the industry and being online is a major contributor. He comments:
Fears of war and worldwide economic decline are not hitting the online sector of the travel industry. This partly reflects customers continued determination to travel, and not abandon all holiday plans during these uncertain times, but also shows that the online marketplace is currently the industry`s star performer, experiencing real growth like no other sector
According to the Travel Industry Association of America (TIA
), 57 percent of online travel bookers purchased accommodations on the Internet in 2002—that`s exactly halfway between airline tickets (77 percent) and rental cars (37 percent). Furthermore, Jupiter Research
(a unit of this site`s corporate parent), predicts online hotel bookings to surge from $5 billion in 2001 to $14.8 billion in 2007.
PhoCusWright supports the predictions of increased Web bookings, expecting traditional travel agencies to represent just 18 percent of hotel sales in 2005—down from 21 percent in 2001—as hotel sales move online. The firm forecasts a 49 percent increase in online hotel sales in 2002, reaching $6.3 billion.
Hoteliers take note; Jason Price and Max Starkov, ebusiness consultants at
Hospitality eBusiness Strategies pointed out the following in their website optimization report:
Roughly 52% of all online bookings in 2002-2003 will be completed directly through hotel-sponsored websites. Forrester Research confirms that people who book online prefer to use a supplier website over intermediaries.
If your hotel is not generating at least 53% of its online bookings directly from the hotel website, but from intermediaries, then you are not competitive on the Web and run the risk of long term price and brand erosion.
The Internet is the ultimate “Direct Distribution Medium”. It provides the hotel with long-term competitive advantages by lessening dependence on intermediaries, online discounters and traditional channels that may soon become obsolete. Any promising, sustainable, and defensible distribution strategy must start locally at the hotel website.
Whether an independent or branded hotel, major hotel chain or hotel management company, it is essential to adopt an effective Internet strategy.