Web 2.0 and the Online Marketplace

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Information about Web 2.0 and the Online Marketplace

Published on May 14, 2008

Author: nguyenht

Source: slideshare.net

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Presentation by Joe Nguyen at Eye For Travel Singapore in March 2008 on Web 2.0 and the Online Marketplace for Hotels.

Web 2.0 & The Online Marketplace Joe Nguyen, Director - Global eCommerce BLOG - http://ecommerceforhotels.blogspot.com 1

Why Is The Online Marketplace Important For Hotels?  In the US, 22%, 25%, 28% of all hotel bookings will be made online in the years 2005, 2006 and 2007. Another 1/4 of hotel bookings will be influenced by the Internet, but done offline (call Centre, walk-ins, group bookings, etc). This figure includes Online Travel Agencies (OTA) as well as direct-to-brand business. - Source: PhoCusWright US Online Travel Overview Dec 2006.  By the end of 2010, over 45% of all hotel bookings will be completed online - Source: Merrill Lynch 2

BUT - Where is it coming from? Meta- Corporate search Website Blogs Sites OTAs Search Hotel Engines Social Website Networks 3

How Do We Currently View The Online Consumer’s Buying Cycle? SHOP PURCHASE 4

What Is The Online Consumer’s Buying Cycle NOW?  With the web, research is now easy, quick, and immensely insightful RESEARCH  Previously, this research was offline or at best SHOP going to the hotels’ websites or OTAs sites.  Web 2.0/Travel 2.0 PURCHASE provides a lot more information than before 5

WEB 2.0 - What is it?  1) Social Networking?  Friendster.com  Tripadvisor.com  Myspace.com  Youtube.com  Flickr.com  Blogspot.com  FaceBook  2) Technology?  Really Simple Syndication (RSS Feeds)  Blogs, Vlogs In 2004, Tim OʼReilly of OʼReilly Media  Asynchronous Javascript and coined the term Web 2.0 for a XML (AJAX) conference, to describe the new age of  “Mash Ups” the Internet.  Widgets  Google Earth/Maps 6

WEB 2.0 - What does it mean?  Firstly, WEB 1.0 - what did IT mean?….. TRANSPARENCY  Consumers are going direct to suppliers, and businesses are going direct to each other  Traditional intermediaries (like travel agents) got sidelined by airlines and hotels.  Information is at the hand of the consumers and end users giving rise to ebay, amazon, and expedia  Consumers have more information and more choices; they can SHOP much easier  WEB 2.0 means INCREASED TRANSPARENCY  Not only will end-users see a company’s product, but they will also have a better idea of how it performs BEFORE they purchase  They can compare and contrast a hotel’s rates offered across online channels (online direct vs expedia vs cheaphotels.com vs telephone booking)  They will know which rooms has a nice view and which room is “haunted”  Consumers can RESEARCH much easier and better 7

CGM Changes Minds of Online Travel Buyers  51 percent of respondents used CGM (Consumer Generated Media) to help narrow a choice  23 percent employed consumer-created information to confirm a decision  15 percent used it to pick their top choice.  21.2 percent of travel purchaser surveyed said consumer review sites influenced their choices, while 11.3 percent noted online advice from consumers did so.  Advice from family and friends and corporate Web sites, however, had more impact. Friends and relatives influenced 38.3 percent of participants, and around one- third said company sites had an effect. Source: The ClickZ Network, Dec 14, 2006 8

WEB 2.0 - What does it mean to a hotel/ hotel group? Whose Role Is It? Rate Parity, Rate Parity, Rate Parity!!! Revenue Management/ Sales Reputation Management online is key • Look for and listen to the feedback Sales & Marketing/ • Be Honest and upfront to the customer MarCom • Respond professionally as if they were in front of you Transparency works both ways • It’s free market research. Your customers are telling Sales & Marketing you what they want • Understand the data • Target the campaigns and sales effort At the hotel, deliver the Brand Promise Operations/ • Service, Service, Service Front Desk • Be customer focussed • Mind the “little things” 9

Rate Parity Is KEY!! 10

Research Then SHOP  How do consumers shop once they have done their Research? RESEARCH  What tools do they use?  Where do they go? SHOP PURCHASE 11

How Do Consumers SHOP? Direct to Websites Direct Internet Booking Engine 90% Via Corp Site Search Engines Inventory CRS/PMS Hotel Site CRS/GDS/ Extranets OTAs Users 12

M & C Traffic Breakdown - 2007 Graph 13

In Summary…  The consumer’s online buying cycle has been expanded to include detailed RESEARCH - RESEARCH using both search engines and Web 2.0.  Consumers still rely heavily on SHOP search engines to do their SHOPPING and hence so are OTAs, Web 2.0 travel portals, and hotel companies. PURCHASE  For hotels, each part of the organization must do their respective roles to match the new increasingly transparent marketplace 14

Web 2.0 & The Online Marketplace Joe Nguyen, Director - Global eCommerce BLOG - http://ecommerceforhotels.blogspot.com 15

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