Integrating E-commerce into a Hotel’s Overall Business Strategy
IN-DEPTH: Interview with Gareth Gaston, Senior Vice President, Global eCommerce, Wyndham Hotel Group By Ritesh Gupta
E-commerce should be a compliment to every part of a hotel’s operations. All staff members need to be briefed on the advantages of taking a collaborative approach to e-commerce.
The front desk staff, for example, needs to understand the correlation of stellar customer service on online guest reviews and the ability of a hotel to sell its products online. Traditional sales departments need to understand the advantages of using e-distribution channels to aid travel agents and offline sales and get involved in the process. Various sales departments can embrace the reach of e-commerce efforts.
More and more hotels are looking at ways to expand their direct relationships with the consumers.
The school of thought that subscribes to an aggressive direct to consumer focus will always substantiate the strategy by showcasing higher profitability, enhanced customer engagement and a more effective management of customer relationship strategies.
OTAs still are a dominant force in the marketplace. But hotels are trying to use e-marketing more effectively as well as focusing on social media outlets to lure prospective customers to their direct channels. At the end of the day, the channels that provide the most conducive environments to consumers (i.e. price, ease of use, accessibility) will win the business.
In order to assess the current e-commerce scenario, EyeforTravel’s Ritesh Gupta spoke to Gareth Gaston, Senior Vice President, Global eCommerce, Wyndham Hotel Group. Excerpts:
What do you think is the most critical aspect of integrating e-commerce into a hotel’s overall business strategy?
Maximising direct business is most critical as it is the most profitable strategy for a hotel. Through direct business, a property can “own” the customer as well as maintain the integrity of the brand.
Ratings and reviews are a trend that is becoming more and more important. I’ve read that nearly 50% of consumers won’t choose a hotel until they read a review. Hotels and brands need to consider this.
Earlier this year, an e-commerce professional mentioned that customers do not like pre-made packages, they love to package themselves by cherry picking on different sites. The packaging site of tomorrow could just be a travel shopping cart that lets you add different components from different sites then price it for you when you are ready and even finding the lowest price and you are ready to book. What’s your take on online travel shopping in the time to come?
Price and quality are now more transparent than ever and sites that are more transparent will enjoy more conversions. Our Baymont brand is currently testing this concept and on our hotel pages, taxes are identified. However, some intermediaries wait until the last minute to show additional charges. The car industry is a good example of this; often, I’m not aware of additional charges until I turn up at the counter!
New travel intermediaries are emerging. How do you think the face of online travel industry is changing at this juncture? How do you think the industry is focusing on getting consumers closest to knowing what they are booking before they actually complete the transaction?
There are many retail examples such as myregistry.com that echo that comment. These sites target different types of customers. They are by no means mass market. Some consumers are loyal to brands or loyal to rewards programs. These solutions address different types of customers.
What I’d like to see in travel are entrants that solve a new challenge – a challenge like selling Sunday night hotel rooms. The players we have today target the same business and there is no incremental value to the hotel owner. And we, as an industry, participate. We don’t ask questions. I’d like to see innovation. Online travel shopping is still in its infancy. What we need to do is facilitate what consumers really want.
Both direct and indirect channels are consumer requisites and strategies for both should be aligned to maximise value. An expert told me key to this will be ensuring that you do not have disparate systems running disparate channel content and pricing. What’s your viewpoint regarding the same?
As an industry, we are not very sophisticated regarding our need for and requirement of intermediaries. In dire times, we are very aggressive with them. As hoteliers, we must understand the true cost of bookings through each channel. We live in a world where intermediaries are a fact of life and here to stay. We need to understand when we need them and when we don’t so we can minimise cannibalisation.
Considering that you were part of the OTA space, what do you think is going to work in its favour and what the OTA business needs to be wary of?
We need balance. There should be a partnership. It’s unfortunate that intermediaries feel they need to cannibalise. Margin and share of business needs to be fair for both entities.
Considering some of Google’s recent initiatives (algorithm change and enhancement of the Social Search offering) and Bing’s tie-up with Kayak and Autosuggest Flight Prices for the travel sector and some other initiative such as Deals, how would you consider these developments for improving the overall travel planning and booking experience?
Bing and Google seek to enhance the overall consumer experience and are rich, viable alternatives to intermediaries. I would like to see these search engines hand consumers to the hotel as only the hotel can impact their lodging experience. Research has indicated that consumers prefer to book directly with the supplier. I’d like to see the consumer experience supersede anything else.
Google and Facebook are both powerhouses on the web and key avenues companies use to reach their target audiences. They have been increasingly moving into each other’s territory. Google has chosen to more prominently display “social search” results akin to Facebook’s “like” and “share” features, and it also has its own social networking feature, Buzz. At the same time, Facebook’s inclusion of in-site chat and e-mail compete with Google’s similar offerings. What do you make of the traffic on these sites when it comes to travel planning?
There is no question that travel planning occurs in Google. However, I don’t believe this happens on Facebook although referrals are likely to be powerful. As a company, we spend more time with owners talking about consumer interaction where we know they will actually be shopping for travel.
The concept of flash sales is gaining traction in the travel industry. For consumers, flash sale sites are becoming increasingly popular because they’re an attractive way to access overstocked inventory, or to get introduced to new offerings. How do you expect this concept to shape up going forward?
As an industry, it is important that these types of initiatives add incremental reservations. Hoteliers need to make certain that they wouldn’t have been able to sell those rooms otherwise. Again, I’d ask the question, “Will this activity help sell Sunday night hotel rooms?”
Which according to you is going to be biggest development in the travel distribution space this year?
Mobile. There has been quite a bit of traction, and we have plans of our own for this space.
Travel Distribution Summit North America 2011
Gareth Gaston, Senior Vice President, Global eCommerce, Wyndham Hotel Group is scheduled to speak at the forthcoming Travel Distribution Summit North America 2011, to be held in Las Vegas (19-20 September) this year.
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