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The
Internet - Can It Really Level The Playing Field
for Hotels?
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by:
David Carruthers
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Like it or not, the Internet has provided the infrastructure
underpinning the massive explosion in tourism which has touched all
parts of the travel business. This has had implications from the vast
state airlines to the smallest b&b and local tourist
attractions who have to cater for a new mix of clientele. This
clientele consists of guests who now have the financial resources to
enjoy more than one break every year, as well as the overseas visitor
who is attracted to the UK by bargain flights. Additionally, they also
understand how to use the Internet to search for and book cheap flights
and accommodation in their chosen destination.
But, as a b&b owner, do you think like your potential guests?
Do you know how they go about arranging short breaks and holidays? And,
did you know that it has now been estimated that for the first time in
decades, more people are arranging their own independent trips rather
than using package tours (Mintel 2004)?
The rise of the budget airlines such as Easyjet, Ryanair, and the many
other newcomers to the budget airline industry best exemplify this
changing scenario. Ryanair for instance, flies 161 routes and takes
most of its bookings via the Internet where it offers its cheapest
fares. This means that the traveller becomes their own travel agent and
inputs their own travel arrangements and booking data into the system.
When combined with the elimination of commission fees payable to travel
agents, a process known as disintermediation occurs. It is
disintermediation which terrifies travel agents!
Ryanair is a superb example of an organisation which has exploited the
Internet to come from nowhere to being the largest capitalised airline
in Europe. They were quick to see the potential of the Internet as a
distribution channel and, as a result, the Internet is now their main
sales channel. What are the lessons to be learned here by hotels and
b&b’s? Foremost is that size doesn’t matter online. Ryanair
proved that. More importantly for hotels, Ryanair and their like helped
to create a new market which encouraged and demonstrated that travel
could be done cheaply and efficiently. But how can the independent
hotelier and b&b owner learn from this?
The large hotel chains have, like the budget airlines, implemented
online booking and have offered some good rates. But they have been
both confused and, caused confusion to their customers. Their confusion
stems from multiple channels such as their own web site, central
reservations, travel agents, and the plethora of third party sites such
as hotels.com, Expedia, Lastminute.com etc. Behind many of these lies
the Global Distribution Systems (GDS) ironically introduced by the
airlines in the sixties. The chains need to ask themselves which is
their preferred distribution channel and where do customers get the
best deal? The customer is confused because he finds the hotel he wants
but is offered so many different rates by the various channels. This
presents the perfect opportunity for the independents.
In order to level the playing field with the large chains, the
independent hotel needs to embrace the Internet and understand that
guests want to make their travel arrangements on the web. To do this,
the hotel needs a good web site that reflects their property. It is not
enough however just to have the web site – it needs to be promoted and
advertised to encourage visitors. Once you have your potential guest
online you need to be able to sell to him – in the same way that you
may purchase books, CDs, and even your grocery shopping! The hotel
needs to take the booking there and then, and, upsell other items such
as an evening meal, tickets to local attractions etc. And of course by
doing it online you can even sell whilst you sleep!
The question is of course, can a small guesthouse with only five
letting rooms afford such a facility? Until recently, the answer would
have been no. Or, it may have been that you could use a third party
system which charged commission, the more you sold, the more you paid!
Programmes such as EUBookings have changed this. This programme allows
hotels to pay a small annual fee of £99 & VAT (plus £90
& VAT implementation) for which they can add their availability
and rates. The system is totally adaptable so if you insist on guests
staying two nights if they stay on Saturday night, it handles it; or,
if you have a minimum stay of seven nights it handles it. EUBookings
will fulfil the needs of the small hotelier at a price which is
affordable.
It is clear that small hotels and b&b’s have been slower to tap
the vast potential of the Internet. This potential has been
demonstrated by the budget airlines positively. The larger hotel chains
have not been as successful and have their own issues which have
created difficulties in their online activities. The independent hotel
and b&b does now have a fantastic opportunity to compete on an
equal footing with these larger businesses and should aim to take more
than their fair share of this emerging travel market.
About the Author
David Carruthers is a Director of Hotel-Pro who
offer software solutions both online and offline to small and medium
sized hotels. http://www.hotel-pro.co.uk
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