Published on May 14, 2008
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 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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