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Opinion & Editorial
The Internet Changes Everything
by Graham Caswell 12/10/2003 |
THE INTERNET CHANGES EVERYTHING. But it changes some things more than it changes others. The Internet works well in some sectors of business, or of the economy, or of society, but does not do much for others. The convenience food retail business, for example, might be only slightly affected by the Internet, but the recruitment industry is being dramatically changed by it. The Internet works better for booksellers than for clothes sellers, better for airlines than for taxi companies, and better for distributing music than for distributing toothpaste.
The Internet is revolutionising the marketing and sales of the hotel industry
For better or for worse, whether you like it or not, whether you are even aware of it or not, the Internet is revolutionising the marketing and sales of the travel, hotel and hospitality industry. And its not hard to see why this is happening. It is just so easy and convenient
to book a hotel room online: customers get a big choice; they get more of a glimpse of the hotel than they would get from the yellow pages or from a few lines of advertising copy; they don't have to go to a travel agent or collect brochures; they can find and book accommodation at any time day or night, at work or at home, or even from the road - whenever they are in the mood. The Internet works for people, which is why so many people use it to find and book accommodation today, and why so many more will do so tomorrow. This is a growing and permanent change.
Hoteliers face a real challenge
But where does this revolution leave hoteliers? Unfortunately, many hoteliers are not technically savvy. Their interests and skills lie in other areas, from designing rooms to attracting and training staff, to overseeing functions or restaurants, to welcoming guests. The world of software and systems and Internet connectivity is not their world. To fill the gap between technically challenged hoteliers and the reality of the demand for online search and booking of accommodation, a new industry of technically proficient and Internet aware companies has sprung up. These are the 'Third Party Intermediaries'
A 'Third Party Intermediary' is somebody who provides you with bookings, and charges a commission for that service. There have always been intermediaries in the market for travel and accommodation - from touts, to travel agents, to package holiday organisers. However, with its vast and growing demand, intermediaries have flourished on the Internet, and have become so powerful that they have essentially become competitors in the market for hotel rooms.
Potential disaster
The more of your hotel rooms sold through an online intermediary, the more you pay in commissions. If the bookings you get from intermediaries were new or otherwise unavailable to you, then using intermediaries would make economic and financial sense. However today, as more and more people turn to the Internet to book their accommodation, the extra bookings you are getting from intermediaries are increasingly coming from yourself, the hotelier. In other words, your customers are increasingly booking online, and if the easiest way to do this is via intermediaries, then there is a constant flow of your customers from you to the intermediaries - and a constant increase in the number of commissions and block booking discounts that you must pay. If you rely on intermediaries for much of your Internet presence, then intermediaries will take a larger and larger part of your business. Its that simple. This is not a winning proposition for any hotelier, and it has the potential to be a long-term disaster for your hotel.
The secret of using the Internet profitably
The customer has decided that the Internet is the future for finding and booking hotel accommodation. You must use the Internet -you have no choice in that. However you do have a choice in how you use the Internet. The secret to using the Internet profitably is to minimise the number of bookings that come from it with a commission attached, and to maximise the number of bookings that come from it directly to you - free and clear.
The purpose of Hotel Sales Online is to help you to do this is as simply, effectively and practically as possible.
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