The proliferation of the Internet in the late 1990s and the revolution of technologies have introduced a wide range of new marketing tools. The Internet allowed hotels to develop their own websites and to display straight and clear information and photos of amenities and locations, as well as to facilitate online bookings. A number of hotel chains, including ACCOR, Marriott, and Thistle, receive a significant percentage of their reservations through their own websites, free of commissions and other charges.
Hotels can reduce their distribution costs significantly by expanding their e-commerce.
Marriott has been able to save US$2 per Internet booking using its own booking engine instead of an outside source. Hilton saves US$25 on each website booking (compared with a traditional travel agency booking) whilst Hyatt’s cost for an online booking is US$3, compared with US$9 to book via the call center. More importantly, hotels can integrate their Web presence with their
customer relationship management function by offering visitors the ability to store their personal profiles assisting the provision of personalized products and added-value elements.
Marriott has been able to save US$2 per Internet booking using its own booking engine instead of an outside source. Hilton saves US$25 on each website booking (compared with a traditional travel agency booking) whilst Hyatt’s cost for an online booking is US$3, compared with US$9 to book via the call center. More importantly, hotels can integrate their Web presence with their
customer relationship management function by offering visitors the ability to store their personal profiles assisting the provision of personalized products and added-value elements.
e-Hospitality futures: challenges for the future of hospitality
The hospitality industry gradually realizes that the ICT revolution has changed best operational practices and paradigms, altering the competitiveness of all hospitality actors in the marketplace. Hotels has integrate their back and front office in a framework that takes advantage of the capabilities of the Internet as well as of intranets and extranets. Convergence of all technological devices gradually empowers greater connectivity, speed, transparency, and information-sharing. As a result, hotels are gradually focusing more on knowledge-based competition and on the need for continuous innovation, forcing management to stay abreast of the dynamic developments in the marketplace.
The hospitality industry gradually realizes that the ICT revolution has changed best operational practices and paradigms, altering the competitiveness of all hospitality actors in the marketplace. Hotels has integrate their back and front office in a framework that takes advantage of the capabilities of the Internet as well as of intranets and extranets. Convergence of all technological devices gradually empowers greater connectivity, speed, transparency, and information-sharing. As a result, hotels are gradually focusing more on knowledge-based competition and on the need for continuous innovation, forcing management to stay abreast of the dynamic developments in the marketplace.
Hotels are also attempting to increase their online bookings by promoting their Internet presence more aggressively and by capitalizing on partnership and collaboration marketing. As a result, multi-channel strategies are required to assist hotels to interconnect with the wide range of distributors in the marketplace. It is currently estimated that there are 35,000 websites from which consumers can book a hotel room. This raises a wide range of new challenges, including rate integrity, brand perception, segmentation, and value of customers.
Stemming from the Internet, the emerging wireless devices and Bluetooth technology will allow consumers to interact with hotels constantly. This will increase transparency further and it will force hotels to rethink their pricing strategies. The Internet has contributed unprecedented tools for communicating with consumers and partners and this has radical implications for hotel distribution. The hospitality industry must appreciate the ‘high-tech high-touch’ opportunity that emerges through the personalization of products, processes, and information. Hotels
have the opportunity to cultivate relationships with their customers and adopt customercentered approaches. Technology needs to simplify the way hotels look after every single need of their customer. By using ICT-enabled processes to coordinate all departments and services, as well as all properties for hotel chains, they are able to run the business more efficiently and to add value at each stage of consumer interaction.
have the opportunity to cultivate relationships with their customers and adopt customercentered approaches. Technology needs to simplify the way hotels look after every single need of their customer. By using ICT-enabled processes to coordinate all departments and services, as well as all properties for hotel chains, they are able to run the business more efficiently and to add value at each stage of consumer interaction.
Innovative smaller properties gradually develop their online presence and are empowered to communicate their message with the world. Small and unique properties will be able to utilize ICTs strategically to demonstrate their specific benefits and to illustrate how they can innovate. By developing links with other properties they can also enhance their virtual size and compete with larger players.
Larger hotel chains can benefit from economies of scale, multi-channel distribution strategies and from streamlining their operations through e-procurement. They will aslo also be able to develop their globalized agenda and ensure that their operations and strategies are coordinated worldwide, reinforcing their brand values and service promise. In any case, ICTs and the Internet will be critical for the competitiveness of both large and small hospitality organizations.
Interconnecting partner systems and extranet
Interconnecting partner systems and extranet
Hotels develop partnerships with a number of intermediaries to expand their distribution network. Hotel chains have therefore established central reservation offices (CROs) with sales agents that have access to property management systems.
CROs allow both individual customers and travel trade to make reservations over the phone or Internet sites whilst they facilitate networking with a number of electronic intermediaries allowing onward distribution. Interconnectivity and interoperability between hotel CRSs and GDSs was a major problem, as each hotel and GDS has its own communication protocols and functions. Two major switch companies emerged, namely WIZCOM and THISCO, to provide an interface between the various systems and eventually to allow a certain degree of transparency. Although CROs and GDSs currently dominate hotel bookings, the Internet emerges as the prime medium for receiving travel bookings from a wide range of intermediaries.
CROs allow both individual customers and travel trade to make reservations over the phone or Internet sites whilst they facilitate networking with a number of electronic intermediaries allowing onward distribution. Interconnectivity and interoperability between hotel CRSs and GDSs was a major problem, as each hotel and GDS has its own communication protocols and functions. Two major switch companies emerged, namely WIZCOM and THISCO, to provide an interface between the various systems and eventually to allow a certain degree of transparency. Although CROs and GDSs currently dominate hotel bookings, the Internet emerges as the prime medium for receiving travel bookings from a wide range of intermediaries.
Limitations
GDSs have been problematic for hotel distribution as they allow only a fairly limited number of rates to be displayed. They abbreviate and shorten descriptions whilst they cannot display photographs, and take a lot of time to update data.
Therefore, the Internet is much more suitable to promote hotel rooms and inventory whilst it provides the tools to increase revenue at a fraction of the traditional cost of booking. Interoperability of systems can support data and transaction exchanges to support hotels to expand their distribution network. Online bookings are showing dramatic growth and a number of online booking agencies and travel agencies, such as hotels.com, allthehotels.com, bookings.com, hrs.com, Travelocity, Priceline.com and Expedia have been established as mainstream distribution.
Internet hotel bookings are projected to rise dramatically in the near future and the hospitality distribution channel becomes more complex as most intermediaries establish links with other players in the marketplace.
The advent of the Internet changed the scenario: all categories of players are now directly accessible and have implemented their Internet strategy. The Internet provides all players with a means of reaching end users and being reached by them. The bigger hotels rapidly implemented Internet strategies and set up their own Internet business areas or, in some cases, specific divisions or companies. In addition, the Internet has extended this possibility to the end user, redefining the business system and the notion of the channel of tourism products, in that it gives access to technologies to large masses of potential consumers and tourism enterprises of all sizes.
