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Who is the Supplier?

07/29/2008



Who is the supplier of travel? It worries me that many of our small hotel and tourism 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 tourism operator and 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 traveller's 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, including airfare, are 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 by the 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, marketing your own brand and engaging customers directly; getting high-margin sales at lowest cost. It is about 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 travellers choosing to go to the supplier's website and book direct rather than with a middleman. Travellers 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 supplier's own website. They include:

Airfare Search and Book, that can be put right on the hotel website; Dynamic Packaging for suppliers, that adds activities matching travellers' profiles; RSS feeds, blogs, travellers' comments and travellers' 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 supplier is not hidden and travellers can go direct to the supplier website at any time. There are pop-ups and standard views of the information which travellers like, as supplier websites follow no standard and it is confusing to compare several. All information on the direct channel (including website's 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, i.e., 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 give tourism suppliers 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; in fact, direct is about marketing your brand. A direct channel will allow users to go to your website and will not require guests to prepay the booking, deposit it in their bank, and pay you the balance less commissions. A direct channel gives you control of revenue, payment options, terms, content, rules, branding and customers.

In 2007, 60% of online travellers 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. Currently, the large chains receive over 80% of online business direct (see trends).

We need to gear up now for this market and take control! -------------------- Ian R. Clayton, AXSES


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Who is the Supplier?
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