Library Twin Evils
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.
At issue with the ASP approach is the fact that you continue to pay for a lifetime on a monthly/commission basis. As with any software, purchasing and owning a copy outright can reduce the overall long term costs of ownership dramatically.
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 purchase approach to resolving their investment concerns.
– John Shenton – September, 2002
N.B. This article may be displayed on your website providing it is kept intact and a link to us plus authorship is displayed.