Reverse Travel Auctions E Business


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Reverse Travel Auctions E Business

  1. 1. E BUSINESS Reverse Travel Auctions 1
  2. 2. Reverse auctions’history  Reverse auctions gained popularity in the late 1990s as a result of the emergence of Internet-based online auction tools.  FreeMarkets was the first company, launched in 1995 by former McKinsey to use the reverse auctions process.  At the beginning of the new millennium, eBay created an online auction model where buyers compete to each other for their highest price for a particular item.  In 2005, the reverse auction concept arrived in France. 2
  3. 3. The reverse auctions process  An online auctions is a process where Internet buyers can set a purchase price as the basis for finding a vendor willing to sell at that price.  Reverse auctions can effectively be used for procurement of a variety of goods and services, as well as financial products.  Unlike a typical auction, prices in a reverse auction decrease as the bidding process continues.  The objective of reverse auctions process is to stimulate the demand.  The target of reverse auctions is price sensitive customers. 3
  4. 4. The reverse auctions process 4
  5. 5. Reverse auctions’benefits Reduce of the product’s cost, saving money. Save time by using online reverse auctions website It is quick (competitors normally have only minutes to do their bidding) It encourages competitors to focus on each other’s pricing 5
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  7. 7. Reverse auctions in the travel industry Case study : 7
  8. 8. Business description:  Priceline is an OTA that uses the reverse auctions process as their main strategy.  enables customers to name their price. “Name your own price”.  In 2002, Priceline licensed its “Name Your Own Price” travel system to eBay.  The offer of Priceline is airline tickets, hotel rooms, car rentals, and Vacation Packages.  Priceline is the parent company of the European organization 8
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  10. 10. Hotels’ profile on  Priceline hotel participants are major national brands: what are their characteristics? Well known brand that customers can easily identify They have quality standards, that most customers are familiar with. They negotiate Net price/non commissionable They have perishable inventory, because of their huge capacity (room inventory) It is easy for customers to have information 10 about hotel chains.
  11. 11. Sites giving customers advice on using reverse auctions  :  This site gives information about the benefits of using a reverse auctions process whether its is for a company or for a buyer. It really gives details on how to use a reverse auctions process.  this website describes the history, the issues and opportunities about reverse auctions.  : it is like Ebay, a website which sales products and services with a reserve auctions model. In this website the process of purchasing a product is well described and easy for the customers to understand. 11
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  15. 15. The keys points of using the reverse auctions process. • The buyer posts an order with the amount of it price 1 • Multiple sellers offer the desired product at competitive 1 prices • The seller who posts the lowest bid is the winner of an 2 auction. • The Buyer receives a contact information from 3 • Buyer-to-seller funds transfer 4 • Buyer receives the product 5 15
  16. 16. Conclusion :How can a hotel best participate in a reverse auction site?  Hotels most particulary chain hotels can participate in reverse auction by adding their hotel to a well known OTA which uses the reverse auctions process  The hotel must choose the OTA regarding its reputation, its fee policy, its rate of customers’satisfaction and its cancellation policy.  It will allow the hotel to sell its inventory and gain revenues. 16
  17. 17. Webography      17