Web 2.0
&
The Online Marketplace
Joe Nguyen, Director - Global eCommerce
BLOG - http://ecommerceforhotels.blogspot.com
1

Why Is The Online Marketplace
Important For Hotels?
 In the US, 22%, 25%, 28% of all hotel bookings will be
made online in the years 2005, 2006 and 2007. Another
1/4 of hotel bookings will be influenced by the Internet,
but done offline (call Centre, walk-ins, group bookings,
etc). This figure includes Online Travel Agencies (OTA)
as well as direct-to-brand business.
- Source: PhoCusWright US Online Travel Overview Dec 2006.
 By the end of 2010, over 45% of all hotel bookings will
be completed online - Source: Merrill Lynch
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BUT - Where is it coming from?
Meta-
Corporate search
Website Blogs Sites
OTAs
Search
Hotel Engines Social
Website
Networks
3

How Do We Currently View The
Online Consumer’s Buying Cycle?
SHOP
PURCHASE
4

What Is The Online Consumer’s
Buying Cycle NOW?
 With the web, research is
now easy, quick, and
immensely insightful
RESEARCH
 Previously, this research
was offline or at best
SHOP going to the hotels’
websites or OTAs sites.
 Web 2.0/Travel 2.0
PURCHASE provides a lot more
information than before
5

WEB 2.0 - What is it?
 1) Social Networking?
 Friendster.com
 Tripadvisor.com
 Myspace.com
 Youtube.com
 Flickr.com
 Blogspot.com
 FaceBook
 2) Technology?
 Really Simple Syndication (RSS
Feeds)
 Blogs, Vlogs
In 2004, Tim OʼReilly of OʼReilly Media  Asynchronous Javascript and
coined the term Web 2.0 for a XML (AJAX)
conference, to describe the new age of  “Mash Ups”
the Internet.  Widgets
 Google Earth/Maps
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WEB 2.0 - What does it mean?
 Firstly, WEB 1.0 - what did IT mean?….. TRANSPARENCY
 Consumers are going direct to suppliers, and businesses are going direct to each
other
 Traditional intermediaries (like travel agents) got sidelined by airlines and hotels.
 Information is at the hand of the consumers and end users giving rise to ebay,
amazon, and expedia
 Consumers have more information and more choices; they can SHOP much
easier
 WEB 2.0 means INCREASED TRANSPARENCY
 Not only will end-users see a company’s product, but they will also have a better
idea of how it performs BEFORE they purchase
 They can compare and contrast a hotel’s rates offered across online channels
(online direct vs expedia vs cheaphotels.com vs telephone booking)
 They will know which rooms has a nice view and which room is “haunted”
 Consumers can RESEARCH much easier and better
7

CGM Changes Minds of Online
Travel Buyers
 51 percent of respondents used CGM (Consumer
Generated Media) to help narrow a choice
 23 percent employed consumer-created information to
confirm a decision
 15 percent used it to pick their top choice.
 21.2 percent of travel purchaser surveyed said consumer
review sites influenced their choices, while 11.3 percent
noted online advice from consumers did so.
 Advice from family and friends and corporate Web sites,
however, had more impact. Friends and relatives
influenced 38.3 percent of participants, and around one-
third said company sites had an effect.
Source: The ClickZ Network, Dec 14, 2006
8

WEB 2.0 - What does it mean to a
hotel/ hotel group?
Whose Role Is It?
Rate Parity, Rate Parity, Rate Parity!!! Revenue Management/
Sales
Reputation Management online is key
• Look for and listen to the feedback Sales & Marketing/
• Be Honest and upfront to the customer
MarCom
• Respond professionally as if they were in front of you
Transparency works both ways
• It’s free market research. Your customers are telling Sales & Marketing
you what they want
• Understand the data
• Target the campaigns and sales effort
At the hotel, deliver the Brand Promise Operations/
• Service, Service, Service Front Desk
• Be customer focussed
• Mind the “little things”
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Rate Parity Is KEY!!
10

Research Then SHOP
 How do consumers shop
once they have done their
Research?
RESEARCH
 What tools do they use?
 Where do they go?
SHOP
PURCHASE
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How Do Consumers SHOP?
Direct to Websites
Direct Internet
Booking Engine
90% Via
Corp Site
Search Engines
Inventory
CRS/PMS
Hotel Site
CRS/GDS/
Extranets
OTAs
Users
12

M & C Traffic Breakdown - 2007
Graph
13

In Summary…
 The consumer’s online buying
cycle has been expanded to
include detailed RESEARCH -
RESEARCH using both search engines and
Web 2.0.
 Consumers still rely heavily on
SHOP search engines to do their
SHOPPING and hence so are
OTAs, Web 2.0 travel portals,
and hotel companies.
PURCHASE
 For hotels, each part of the
organization must do their
respective roles to match the
new increasingly transparent
marketplace
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Web 2.0
&
The Online Marketplace
Joe Nguyen, Director - Global eCommerce
BLOG - http://ecommerceforhotels.blogspot.com
15