TheSupplier

Who is the supplier of travel

It worries me that many of our small hotel customers, do not perceive themselves as suppliers. They often see themselves as a “product” “supplied” to the market by middlemen. Nothing is further from the truth. The hotel owner is the supplier of rooms and of an experience. Together these make up the core product of a holiday. The hotel owner should choose to be inventive and create total packages that fulfill the travelers dream”.

Ultimately travel marketing is about selling a dream, and each hotel is distinct, offering a unique experience. All of the tools the hotel needs to package an experience, even including airfare is available for direct bookings.

Believing that middlemen are suppliers erodes the hotel brand and places market leadership in the wrong hands. When consumers go to online channels to book reservations, they are influenced as much by the channel used to book the reservation as they are to the actual hotel they selected

It is time to take control.

Control of the channel is not about getting more sales out of middlemen – it is about offering a service that competes with middlemen, marketing your own brand and engaging customers directly; getting high margin sales at lowest costs, being in control of your market and your brand.

Max Starkov, Chief eBusiness Strategist, Hospitality eBusiness Strategies writes “The Internet is all about transparency, efficient distribution of information, and inexpensive e-commerce transactions. It is simply the best direct-to-consumer distribution channel ever created and it definitely favors supplier-buyer relationships”.

The trend is clear, the Internet is revolutionizing marketing with more and more travelers choosing to go to the suppliers website and book direct rather than with a middleman. Travelers say they feel they have more control working with the supplier directly, but they expect rates and services to be comparable.

There are now new tools and services for travel suppliers to help them provide the full set of interactive and social networking solutions expected। AXSES has been a pioneer, providing 'supplier centered tools' to manage and distribute travel products. These can be installed directly on the suppliers own website. They include:

• Airfare ‘search and book’ that can be put right on the hotel website
• Dynamic packaging that for hotel suppliers that adds activities that match travelers profiles
• RSS feeds, blogs, travelers’ comments and travelers ratings
• Website booking engine
• Rates management and
• A range of travel components that hotels can put on their sites

All of these may be integrated with:

• Hotel Property Management Systems
• Global Distribution Systems (GDS) and
• The Internet Distribution Companies like Expedia.

What the middlemen do well is offer comparison shopping and search capabilities. AXSES bookings and reservation portals like http://bookingsBarbados.com, http://BookingsStlucia.com and http://CaribRes.com provides this also, but with this twist - requests and bookings are made directly with the hotel. (see axses arcRes supplier travel suites).

Unlike middlemen systems the hotel is not hidden and travelers can go direct to the hotel website at any time. There are popups and standard views of the information which travelers like as supplier websites follow no standard and it is confusing to compare several. All information on the direct channel (including websites content, amenities and features) is under the control of the Hotel.

These new tools are different to middlemen solutions for suppliers and destinations। The supplier-centered tools are designed from the ground up for suppliers, ie hotels, apartments, villas, activities and all tourism operators. They are configured to any set of rules and rate options. The tools are a powerful set of integrated suites to help tourism suppliers compete with all middlemen, for more high profit DIRECT business.

But be wary, not all who claim to be direct are!. Some marketers are jumping on the bandwagon, without credentials. A direct channel will not hide your brand, infact direct is about marketing your brand. A direct channel will allow users to go to your website and will not require guest to prepay the booking, deposit it in their bank, and pay you the balance less commissions. A direct channel gives you control on payment options, terms, content, rules, branding, and customers.

In 2008* 60% of online travelers chose to BUY Direct from the supplier, bypassing the middleman. The trend to direct is expected to continue. Merrill lynch forecasts that it will exceed 65% in the next 2 years. Current the large chains receive over 80% of online business direct (see trends by Merrill lynch HeBs).

We need to gear-up now for this market and take control



* Merill Lynch report is dated 2007, the table says 2008 but it probable is 2007. This is to be verified!

Advertising

Advertising at a Crossroads

Free reports, Tips and Guises:
 http://powerconsultants.axses.net/free-marketing-reports/

2015 Update - MediaPost call it an irrelevant argument -
See how Advertising Gets #Unbundled

Why The Biggest Debate In Advertising Is Irrelevant at MediaPost
Brands the say  ""We now care little about the record label and less about the singer or band"
I add add "and less about the brand, none of these are ny any means less vital, In fact consumption is up and all sectors gain, it just gets #UNBUNDLED (see link at end of article)

2013 update...
Its been a while since we forecast these changes and more.. So its rewarding to see this slideshow of the history of advertising. We were right on track in 2008 and today we are seeing search moving more into integrated marketing pushing search drops small hotels off of search results.

The Evolution of Advertising: How Consumers Won the War for Their Attention from HubSpot All-in-one Marketing Software

ORIGINAL ARTICLE.
 

 At AXSES, we have been musing about the internet advertising business, wonder how it will evolve. With Google loosing ground to other choices, such as social networking, meta search, bookings and interactive services, it will not be long before they morph their business to give travelers what they want. Google decided not go the bookings route, and did not offer to buy Expedia. It has opted to move more into social networking see Google Travel Plans. MSN in contrast is moving to interactive shopping, with its purchase of Farecast.

In our view the days of static ads and list that link to websites are limited. We expect to see this change even on the search engines. Travelers need to be able to compare options and get fully costed holiday at a click.

Hitwise, the Internet statistics company recently noted a significant shift in searchers favouring Branded searches. “I looked at the top 300 search terms sending visits to Travel websites and found that more than three-quarters - 77% - of visits from these queries were from branded search terms such as “Hilton hotels” or “Expedia” in the four weeks ending April 26, 2008”, Heather Hopkins, VP Research, Hitwise UK.

Simple put, the Hitwise findings, mean searchers are now looking more for names they know and not relying as much on generic terms. If the trend continues, it will mean that we can’t rely on the search engines to help people discover our hotels for the first time. We can’t rely on a middleman to market us!. Marketing ourselves is something we can’t avoid.

In light of the trends to buy direct, it is interesting that Expedia is a top of mind search term. Yet Expedia reports, unofficially, that 70% of visitors to the their site use their list to find resort matching a budget, and then go directly to the resort website to make a contact and book. 95% of Expedia visitors do not buy from Expedia. Aware of this trend Expedia introduced a Cost Per Click (CPC) advertising option, similar to Google. Interesting indeed! Has Expedia seen the writing on the wall?. Perhaps they got the idea that they were the new search engine for travel. So now instead of paying 25-30% in commission advertisers are paying 30-40% and don’t have any control on their brand.

The Cost Per Click (CPC), is the cost to deliver a single customer to a website as a result of a paid listing or advertisement on a medium such as Google or Barbados.org.

In a recent study of advertising costs, AXSES revealed that the Cost Per Click on Barbados.org is now less than 1/5 of costs on sites such as Google.

But they are all static ads that link travelers to the advertisers website. In addition we do free listing for every resort in the destination.
All of them, not just advertisers.

Our next release will make these ads interactive and link directly to dynamic quotation, reserve and book options. Of course all direct to the advertisers. What this means is that Barbados.org advertisers will have interactive advertisements that allow travelers to get an immediate quote and to reserve or book a holiday package, including air, online, on almost every advertisement and listing on Barbados.org. Travelers will now be able to click a button on the advertisement itself and make a booking directly with the hotel right there and then,. and this is right across all media, even on Google maps. Pretty powerful when u consider that Barbados.org maps are on the Google website ((http://maps.google.com/maps?f=q&hl=en&geocode=&q=http:%2F%2Fwww.barbadosbymap.com%2Fgeorss.php) )as well as on Barbados.org map pages (and http://barbadosbymap.com)

Couple low CPC advertising with bookable ads and the supplier centered technologies now in place with  axses travel platform and other supplier solution, and you get a powerful direct marketing solution: Enhancing suppliers brand and delivering commission free business directly to the tourism operator. Giving control back to the supplier. For AXSES Power Marketing Free Resources and Marketing Tips go to http://powerconsultants.axses.net/free-marketing-resources/

We look forward to hearing from. Do you agree, do you have a point of view?. Please let us know what you know!

Oh - Do read the MediaPost Article its very on target on how advertising is unbundled

GDS Next Generation

GDS NEXT GENERATION SEAMLESS
The GDS' are the distribution backbone for travel agents, in-house corporate travel departments, and many of the Internet distribution systems like Expedia. They deliver rates and availability information for travel covering air, hotel and car rentals. The information is delivered to the travel agent, so that it appears on their desktop computer using special software to search, display rates and book.
The GDS' Hotel information was originally all input by hand and this is still done manually in many cases. Pegasus employed a house full of workers to do this work, much of this is now out sourced to India. The process is very tedious and time prone to error. Once the information is loaded software system maintain the rate and inventory changes in all GDS. The Pegasus Switch coordinates hotel information bewteen gds sytsems. Data from hotel chains, Internet sites and GDS agents all at some piont use this switch.

To avoid delays and errors hotels and their technology providers opted to integrate the GDS information with their own reservations and property management solutions. This was called seamless integration. 2 way seamless refers to the systems that can manage GDS rates from the hotel CRS or PMS. One way integration simply means the hotel system can view the GDS sales but not manage the data.
Seamless Integration is not the same as NEXT GENERATION.
Next Generation capability was built by the GDS to allow compatible systems to input the data directly into the GDS´s. There are several such sytems in place. (list of services). This means that a hotel might use an online form to input their rates and data and this goes directly into the GDS. It substantially reduces the time to get to market and eliminates some errors when re-keying data. GDS sold this option to vendors who it turn incorporated it into their hotel solutions. Some setup shop as GDS agents to offer this service.

NEXT GENERATION ROBOTICS
The technology to update a mainframe is not trivial. It involves robotics that interface online internet system with GDS mainframe computers. Mainframes are not Internet savvy computers and cannot be accessed directly to change and add data. The data is sent via packets relayed on telecommunications network. The packet relay is interpreted by the Mainframe. As these mainframes are all different systems, protocols and standards were created. Mainframes also have very specific rules on what characters are accepted. Charters and in some cases words act as tigers to set off process in a mainframe, so the information sent to a mainframe must be accurate and comply with their rules. Even years after implementation the GDS-load process was finding errors in data integrity. A simple quotation mark can trigger a failure with disastrous results.
The Pegasus switch (originally called thisco, now called Utraswitch) is not a next generation technology. That is why Pegasus bought a similar system developed by Trust that was. Pegasus plans to upgrade all system by 2008 with conversions starting with hotel factory (their Central reservation system) in November 2007. Pegasus PR



SUMMARY

Next Generation provides GDS users with real-time rates and availability that is 100% identical to the information used by a hotel company's own reservations staff. The information is more quickly available and more accurate resulting in increased confidence and usability by agents. With NEXT generation Seamless, agents are more inclined to sell more using the GDS rather than book via telephone to assure their clients the lowest rates. Galileo Inside Shopper, Worldspan Integrated Hotel Source, Sabre Direct Connect Shop, the respective GDS' Next Generation Seamless products, were implemented by 2004.


GDS Chain Codes

© Ian Clayton, AXSES SCI 2007.
see arcRes solutions for tourism, AXSES web Solution