Vivek Nayak - is Chief Information Officer at Avenues, the Company which has launched ResAvenue: the Internet Reservation Engine and Online Payment Gateway Solution for the hospitality industry.
So how can hoteliers tap this market opportunity in a cost effective manner and create a steady stream of customers into their properties. Here is one answer (among many). Use The Internet to do some serious `destination marketing’. Why destination marketing? People want to know why they need to come to your city, town, hill station etc. Invest in investigating why people come to the destination where your property exists. Use the information on your hotel website to attract more visitors. It is as simple as that. Why use the internet? Unlike the printed media, the Internet gives you global reach at a throw away cost. It gives your hotel permanent presence 24 X 7. So people who want to reach you need not hunt through magazines and directories, they just put in your website name in their browser. The Internet gives you the power to make a sales pitch by remote control to a customer and close a sale on the website itself.
It is not as if Indian hoteliers are not aware of the benefits of this exciting medium. They are. But the fact is, few have approached it with the seriousness that it deserves.
Most hotels have extended the historic commission based relationship with the agents to their online model. Consequently, any guest hunting for a hotel room on the Internet through a search engine will be flooded with a plethora of offers from all kinds of agents for a wide range of hotels. None of the results thrown up by the search engine would be from a hotel website itself. That’s simply because the hotel would not have bothered putting up a branded website in the first place. Even if it had a website up, it probably would not have invested in a sound website popularisation programme to popularise it.
Now let’s look at some of the Indian hotel as well as agent websites. Most have just put up a basic `information only’ website and a lot of them have an email based enquiry mechanism for online sales. This system usually delivers a response to the customer’s enquiry in about 24 hours. Practically nobody offers a real time solution which is complete in all respects. An ideal online solution would give the guests 4 critical facilities. One: It gives the guest a room availability status instantly Two: It gives the guest the facility to reserve a room instantly Three: It gives the guest the facility to pay online instantly through his credit card. Four: It gives the guest a printed confirmation instantly. No waiting, no doubts and no niggling worries. If a reputed hotel’s website were to offer this, I would bet my bottom dollar that customers would be queuing up to snap up rooms. Case in point: The Leela Hotels. Their website has implemented an online solution called ResAvenue recently. It has been a couple of months since its implementation and the cash register hasn’t stopped ringing. And the cost of acquiring the extra sales has proved to be virtually negligible!
In India, where the Internet medium is yet to be exploited, this is the right the time to invest in building your hotel brand through your website. At this point in time, Indian hotels are not yet held for ransom by strong Internet savvy intermediaries and agents as it has happened in the West. There is ample research which shows that customers overwhelmingly prefer to buy directly from the source rather than buy through intermediaries. There is a perception that a room rate carried on the hotel website carries the stamp of authenticity and authority. Hotels can make the most of this by offering the best Internet room rate on their hotel website, so that customers’ belief that the hotel website always gives the best room rates is reinforced through every interaction. So hoteliers in India have a unique opportunity to create a strong brand presence through the hotel website and manage intermediaries from a position of strength.
Converting your `information only’ hotel website into an effective online sales channel is a task that needs vision, perseverance and commitment – both logistical and financial. There are broadly three areas of expertise required to successfully take your hotel online.
Brand and Product Management:
Work out and implement sound strategies for positioning the hotel brand, product packaging, inventory and pricing management. Run a forward looking CRM program and work out a proactive policy to track online customer behaviour. Set up a dialogue and create packages to suit their special requirements. Reward loyal online customers with sops like free room upgrades etc. This could prove to be beneficial in the long run.
Website Popularity Management:
The secret of running a successful commercial website is recognizing that you have to get a lot of things done and you can’t do it alone in these days of specialization. Your website has to be found, get seen, get visited, and get browsed through. Only then can it start selling your product. Just as a bookstore which doesn’t encourage browsing will always suffer from poor sales, a website which doesn’t welcome the customer and compel him to browse through and experience the hotel brand cannot hope to be very successful. Content relevance, information presentation, easy navigability, quality of resources on destination and shopping guides are some of the content areas you can focus onto increase the attractiveness of your hotel website.
85% of Internet users use search engines to hunt for what they require. Search Engine Optimization campaigns are a must. Your entire hotel website needs to be optimized so that finding and getting to your website is easy, navigating it is easy and interacting with it is easy. The world of website optimization with terms like keyword research, algorithm tracking, link creation and exchange can be mind boggling to the uninitiated. Partnering strong website brand building companies such as eBrandz can help the hotel management team navigate the transient world of website optimization and continue focusing on its core competency, which is creating and selling a hospitality product.
Technology and Logistics Management:
The progress of commerce goes hand in hand with the progress of technology. That’s a nice lofty statement to read in conceptual terms. But it is a nightmare for those who have to live with the nuts and bolts of technology. The cost of empowering your hotel website to work as an independent commercial channel can be prohibitive.
To begin with, you have to spend a packet to plan and write the software for a reservation engine to run off your website. Then spend again on creating customized software that integrates into varied payment gateways of financial institutions to enable your website to process payments. All this demands resources - a lot of resources. Software needs to be updated. Servers need regular upgrade. Software programmers, engineers, telecom experts need to be on the payroll. Then there are logistics to work out with the financial institutions. You will need to co-coordinate with banks and credit card companies for commercial tie-ups. Invest in know how and people to manage Frauds and Risk, pay the high cost of implementing security certifications for your website. All in all, this could put off even the most vociferous supporter of eCommerce.
The good news is that once again, you can partner an online service provider like ResAvenue who will take care of all these daunting tasks for a small fee. You won’t have to spend on manpower, servers, infrastructure or software. A nominal monthly rental is all you have to pay such a provider. But it is important to select the right provider. A full service partner who can manage both the reservation software as well as the payment processing is the bare minimum. Since you will get customers from across the globe, the questions to ask are: How many currency options does the processor offer? Is the reservation engine multi-lingual? What kind of flexibility and ease does the customer have to manage the business rules such as rates and inventory management? What kind of MIS features does the software provide?
According to global industry estimates, in just 2 years, 1 out of every 4 rooms sold, will be sold through the Internet. Of this 60% will be direct-to-customer through the hotel website and the rest through intermediaries such as online travel agents. That’s a huge percentage. The good news is that the cost of acquiring the sale through the hotel website will be a fraction of what you pay as commission to traditional channels. That is a huge saving in the long run. All you need to transform your hotel website from a pretty online brochure to a high performance sales channel is a good reservation engine and a payment gateway working in tandem.
All in all, by signing on the right partners, your hotel website can get a head start over the competition and give you the vital edge in the long run. With cheap broadband access already a reality in India, the penetration of Internet access into the Indian household is likely to increase dramatically. Today, the most popular activity that people indulge in on the Internet apart from entertainment, is shopping. Travel related shopping, though it accounts for a miniscule percentage of all shopping today, is likely to grow exponentially in the next few months. Did you know that the largest number of transactions in the country today takes place on the Indian Railways website irctc.co.in? What is the second question that most travellers are likely to ask after, “How do I get there?” Yes, it is “Where do I stay?” Any hotel which can provide that answer clearly and can meet the expectations of the traveller will get his or her business.