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A beginnerís guide to exploiting electronic booking.

If you havenít heard this before, then pay heed now. Internet marketing can make or break your hotelsí bottom-line in the near future.

To help you navigate your way through this vital new channel, we bring you ďA Beginnerís GuideĒ that will guide you through the intricate process of efficiently managing your marketing and distribution channels to reach higher profitability. It will enable you to tap into large and hitherto unexplored travel markets. It will help you best your competition in the occupancy game by attracting a lionís share of the traveler segment.

But first, letís take a look at some situations and how the Internet can change things for your hotel.

Do you believe that FIT sales and relationship based sales alone are more then enough to keep you profitable over the next few years?
Travel is the biggest commodity sold online. If you are not plugged in to capture a part of this segment, you could soon be extinct.

Looking for new markets to bulk up your profitability?
7 billion (appx.) potential guests are online Ö Grab a share now and put your sales on steroids.

In the past few years, do you think your sales offices and agent network have been sufficient to maximize occupancy?
Unlike the past, 58% of todayís travelers obtain travel information directly from the Internet. So, if you are not online, you are losing out on a big opportunity.

Is the Competition capturing your guests through a wider sales network and bigger marketing budget?
35% travelers book directly via the Internet. Donít play the competitionsí game. Change the rules. Put your hotel room inventory online, provide guests direct access to your inventory through your website and open up a new inexpensive marketing and distribution channel.

Are intermediaries, agents eating into your profits?
73% of online guests prefer to book directly via the hotel brand website. Minimize the effect of intermediaries to your bottom-line by providing guests direct access to your inventory and giving them the best deals on the brand website.

As an hotelier who is out to capture the highest number of travelers, you will find that you probably can relate to one or more of the situations mentioned above. These facts depict the current scenario existing in the industry today. And the reality is the net set generation makes it vital to include the internet and internet marketing in your marketing mix. But before we understand how internet marketing can change your hotelís situation, we need to understand the internet and how it has changed the way of the world.

BeginningÖ A few years ago with the commercialization of the Internet the world turned into a global village by dissolving barriers and boundaries. Its speed and ease of connectivity changed the way people thought, acted and worked. What once took weeks now took minutes Ö even seconds. With communication becoming instantaneous, industries across all fields woke up to the endless possibilities. New business opportunities opened up. New marketing techniques and tools were tried and fine-tuned. This in turn triggered off a whole new industry that thrived on Internet Marketing.

Internet Marketing, from an hotelierís perspective, involves leveraging the internet as a marketing, communications and distribution channel. This exciting and essential new medium is unlike other traditional media because it supports unique features. Features such as controlled two-way interaction with target audience that is measurable, cost effective; instant connectivity to a global audience i.e. You can build an interactive relationship with your guest or potential guest by emailing special offers, packages etc.

A key requirement to effectively use the internet as a marketing tool is a website. This will be your first step towards promoting and attracting travelers to your hotel via the Internet. So, if you donít have one, get one. If you have one, ensure that it optimized to attract the largest target audience possible. This is crucial as your website will be the only real opportunity to communicate your true brand image to your guest. It also acts as the point of sale for your product (hotel room, amenities); so it is necessary that your website displays the best and lowest price range as compared to your traditional marketing channels. The reason behind this is that, if a guest can book your hotel room at a lower rate through an agent then your potential bottom-line will decrease due to the commission you are required to pay. This emphasizes the importance of actively marketing your website to get direct sales. A website unvisited is profit lost.

The internet known for its tremendous global reach makes it possible for travelers to contact you from anywhere and at anytime (24X7 access). Moreover, it is not only a marketing channel but also an advertising and promotional one i.e. you can advertise and promote your hotel at a fraction of the cost, as compared to traditional media options. It is a medium that is constantly evolving and is constantly improving. It keeps throwing up new opportunities for the marketer by creating new tools and techniques that encourage commerce over the internet and brings down barriers. These diverse features make it the only media that fulfills the needs of the entire marketing process from advertising and promotion to marketing and sales. Today, travelers can book flight tickets, hotel rooms with credit cards over a secure system via the internet. Furthermore, this medium provides hotels with amazing potential for expansion as it gains new usersí everyday. ($119 billion by 2010 - Source: Hotelmarketing.com)
v This remarkable medium like any other medium is not without flaws and any hotelier venturing into this new marketing sphere should be aware of them. Firstly, while this is the Internet Age not everyone is technology savvy. The installation of software, overseeing the development of a website, managing relationships with Global Distribution System or independent Travel Websites or even setting up a full online reservation and payment system can be intimidating. However, this fear must be faced and overcome as it is vital to create a branded website for your hotel to fully utilize the benefits of the internet.

Creating an excellent eCommerce enabled website to attract travelers requires careful planning. Both in terms of hotel brand communication through the website content and design as well as the planning of business goals using the distribution channels. You will need to maintain and optimize your corporate websites and distribution channels to impart true brand information Ė descriptions, packages, deals, price structure etc. This will ensure potential guests will not receive a negative impression due to old, outdated and inaccurate information. (A negative impression can effectively condemn your website in a guest mind) Beyond this, you will have to actually invest in working out strategies to actively drive the right traffic to your website. Doing it alone is fraught with risks. You need to go with the spirit of `profit-from-cooperationí that is unique to the Internet medium and identify the right partners to do business where the arrangements are win-win for both parties.

Managing the distribution channels is a very important part of the process of taking your hotel online. Today, there are numerous global distribution and internet distribution (travel websites) systems available in the market, offering different benefits. You need to carefully weigh the pros and cons and decide which one is fits not only your marketing strategy but also your budget. These distribution channels will play an important role in increasing your visibility and presence online. They can also expand your market and your overall profitability. However, hotelier should be aware that with each booking made via these systems you will be required to pay a nominal commission of approximately 10% (varies depending on service provider). Each of these additional costs must be factored into accommodation cost and marginally increase the price range of your hotel. An effective solution is to employ a third-party who will connect you to the main global distribution channels like Amadeus, Galileo, Sabre, Worldspan and the major internet distribution channels like hotel.com, cnntraveller.com, Travelocity.com, expedia.com and their affiliated websites. There are companies like ResAvenue who in addition to supplying you with your own payment gateway provide facilities like free GDS and IDS connectivity. This will help you reduce costs as guest can book directly, thereby, eliminating commissions.

Employing simple techniques like these can give you an unprecedented edge as you gain access to a new, large untapped market. However, to properly achieve this goal requires an in-depth understanding not only of the internet and internet marketing. It also require practical knowledge of the new genre of marketing tools and techniques solely related to Internet Marketing like search engine optimization, pay per click, search directories, email marketing and really simple syndication (All of these will be dealt in detail with in upcoming columns). This information may at times seem to be in excess. However, if you truly wish to corner your share of the online traveler segment through the internet, this knowledge is vital. This holds true even if it is only used to efficiently oversee consultants or the staff-member responsible for your online hotel sales and marketing.

In conclusion, internet marketing can be an answer to your global marketing problems. As it will enable you to careful and simultaneously manage the Global Distribution System, the Internet Distribution System and your hotel brand website. An imbalance of these channels in your marketing can have a dramatic impact to your profit margins. Therefore, it is essential to apply the same careful planning and considerations that you use to develop your offline marketing mix. The good news is that unlike the offline medium, the online medium is more accountable and transparent. So you have actual data available to you which will help you plan your strategies intelligently.

In this paper, we have spoken about the internet, internet marketing in general and the benefits it offers the hospitality industry. We hope it has provided you with a foundation of how the internet can affect your business.


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