AS I SEE IT

Presentation to New Frontiers In Travel Distribution, September 1999.

As I see it, there are five primary routes for offering accommodation on the Internet.

The first consists of chain and representation company web sites. Participation in these is a core benefit of chain or representation company membership.

Next are the GDS-powered websites. These include Travelocity and Expedia and display in them generally follows automatically from GDS participation.

Third, are Websites with their own databases and booking engines. The best known is WorldRes.com; Inntopia is a new entrant, and TravelWeb represents an interesting hybrid between this approach and the chain web sites, accessing, as it does, both its own database and those of its clients.

Next is the intriguing new buyer-driven distribution model that is exemplified by priceline.com, Expedia’s Hotel Price Matcher and LastMinuteTravel.com’s “My Travel Minder”.

The fifth and last route is the individual hotel Web site.

We’ve all seen the multitude of sites now operated by small, non-affiliated properties. I would suggest to you that more interesting is the number — and I sense it is a growing number — of Web sites operated by affiliated hotels.

Why do they go to this trouble and expense? Two reasons.

First, I propose they do it to achieve expanded presentation of their services — to add further depth to the information already available in their chain’s Web site pages, expanded information that describes their facilities in detail and conveys the character and appeal, of their hotel.

Second, they build these sites to facilitate their participation in destination-oriented sales efforts. This mention of “destination” leads us to the fundamental debate about the merits of brand-centered Web sites vs. destination-oriented Web sites.

There is no doubt in my mind about the value and power of brand association. A brand provides identity and confidence in the product.

Equally important, however, is the reality that destination-centered Web sites mirror the real world’s travel buying process. Travelers select where they want to go, before choosing the airline they will fly or the hotel in which they will stay.

Which direction — brand or destination — is the right one for a given hotel? Well, maybe that’s an unnecessary question! The reality is that a hotel can play both games. It can do this by participating fully in its brand-managed site while achieving destination presence and benefit through a purposefully developed program of participation in CVB, Chamber of Commerce and similar destination-focused Web sites.

To further increase destination-related visibility, a hotel has the option to create and operate its own Web site. Again, that site (unlike most chain sites) can permit extended focus on facilities and services as well as on the attributes that define the hotel’s character and appeal.

Having one’s own Web site also allows maximum use of destination-related Keywords.

Keywords are the “currency” of most search engines and their adept use — as we will discuss in a moment — is vital.

Now a couple of comments on “Onward Distribution”.

By “onward distribution”, I am referring to the display of data (and usually the presence of a booking engine) on sites with which you do not have a direct relationship.

I  divide onward distribution into two categories — intended and unintended.

The first –intended — refers to the sites with relationships of which you are aware. An example is TravelWeb, participation in which results in display (and bookability) on Preview Travel, USA Today Hotel Guide and Aaron’s Hotel Directory to name just 3!

The second, and initially much feared, is unintended display and booking, on “pirate” sites — sites that may intermittently ‘screen scrape’ legitimate sites and then present out-of-date rates and availability.

Happily, instances of problems with “pirates” have been less frequent than initially expected.

MULTIPLE SITE DATA MAINTENANCE

Not every site is linked to a CRS, GDS, or switch. In the case of many desirable sites, there is no alternative to the repetitious task of manually maintaining all the data on each of the sites.

While significant breakthroughs have yet to come in this area — there are three emerging, and encouraging, developments:

Many PMS vendors are writing PMS-to-Web site interfaces.

Web-based CRSs, PMSs, and combinations of these are in development. The Internet architecture of these systems will ease the remote site maintenance challenge.

[An early example of this type of system, one geared to smaller hotels, is the work of the Canadian firm, Cyber Designs.]

WizCom International, in partnership with OpenGrid (formerly known as Ensemble Solutions) is developing a multiple site maintenance facility.

SEARCH ENGINES

I alluded to the importance of search engines earlier. They are a vital utility in the Net environment, allowing, as they do, their users to locate specific information in the vast Internet ether.

Search engines generally seek to identify the topic of a Web site via Keywords: keywords usually being the names of specific people, places and things.

While there are companies that will optimize a Web site for discovery and cataloging by the search engines, the best advice I can give is to be specific when composing property descriptions.

In other words, ensure the site “names names”. The hotel is not “near world class museums” and the attractions list do not read simply “museums”, rather the hotel is “around the corner from the Smithsonian Museum and two blocks from the National Gallery.”

When the Internet surfaced as a medium for the presentation and sale of lodging, there was a widespread (and in hindsight a somewhat naive) expectation that Internet reservations would be free.

The reality, of which we are all now aware, is that Internet bookings are far from “free”; that they often carry costs from multiple points, including:

• Booking site commission
• Chain Fee
• Switch Fee
• Travel Agent commission

Yes, there are costs, but this fact does not diminish the importance of the Internet, an importance that results from at least the following three factors:

One: Internet bookings, even with these associated costs may still be cheaper than those of other distribution channels.

Second: They represent important incremental business.

Third: There may be no option but to accept them as more and more travelers elect to book electronically.

Two traditionally identified impediments to adoption of the Internet by hoteliers, and the general public, have been:

First, the fear of overbooking or other “vandalism” by hackers and,

Second, reluctance on the part of travelers to enter their credit card numbers on a Web site.

In my experience, the hacker threat has not materialized and reluctance to enter a credit card number is rapidly disappearing.

In 1999, 2 to 4% of all hotel reservations will be made on-line. That number could double in each of the next several years. Indeed, I know of hotels, especially inns and small properties, who already received upwards of 50% of their bookings from the net.

Welcome to the new world in electronic distribution!