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Evolution of Channel Management


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Evolution of Channel Management

  1. 1. Evolution of Hotel Online Distribution Michael McCartan, CEO, eRevMax December 2013
  2. 2. In the beginning…       God created men and women Men and women wanted to travel They built hotels to stay at different places Hotels wanted to maximize profits and expand Men and women developed tools for hotel management and distribution And so it all began.... Confidential & Proprietary
  3. 3. ON A SERIOUS NOTE… Confidential & Proprietary
  4. 4. American Airlines installed the first automated booking system known as ‘Electromechanical Reservisor’’ SABRE - Semi-Automatic Business Research Environment was launched AA invited IBM to improve this system, which resulted in the first-automated airline reservation system Confidential & Proprietary Motorola invented the first cell phone ARPANET, the first version of Internet was launched More than 10,000 travel agents use SABRE Time Magazine featured PC as the ‘Person of the Year'
  5. 5. Bill Marriott incorporated ‘Yield Management’ in the marketing strategy of Marriott Hotels. As ‘Yield’ was a term from the airline industry, Marriott called it 'Revenue' 11 airlines joined hands to form Galileo Confidential & Proprietary Hotel Electronic Distribution Network Association (HEDNA) formed Launch of IE Pegasus launched its first online booking engine Trvaelweb WorldRes launched Placestostay, the first online search engine for hotels Travelocity and Expedia launched Arrival of Google
  6. 6. 39% hotel bookings made through electronic medium eRevMax Inc. was founded. RTShopper launched TripAdvisor is launched. Online hotel reservations touch USD ​$ 2.8 Bn, only 4% of the pie Confidential & Proprietary After September 11th, Expedia saw hotel bookings grow by 120% in 2002 47 million hotel reservations made ​through the 4 main GDS 9% hotel bookings made online Launch of Blackberry smartphone
  7. 7. Launch of You Tube Launch of Facebook Launch of kayak by cofounders of Expedia, Travelocity & Orbitz Internet surpasses GDS in reservations Global recession Arrival of Twitter First Android phone unveiled iPhone launched Confidential & Proprietary
  8. 8. Online bookings reach 32.7%, Google reports 3000% increase in hotel mobile search 21% of searches come from mobile devices (7% from tablets and 14% from mobile phones) and 79% via desktops Google Hotel Finder launched Confidential & Proprietary 2/3rds of hotel brands support a mobile-optimized site with mobile booking functionality Number of travel bookings made on the internet each year 148.3 million 60% mobile bookings are done for same-day booking
  9. 9. How channel management has evolved.. 2003 2009 2012 9% of hotel 33% of hotel 58% bookings worldwide are made online 1996 -97 online bookings come from OTAs OTAs & Best Price Guarantee as key driver to book online First Generation 1996 – 2002 2000 - 2002 4% of total booking come from online 120% growth in hotel transactions in Expedia as online shopping gets popular Confidential & Proprietary Second Generation 2003 - 2009 Seasonal Rates FO / Reservations Manager in charge No Revenue Management of Americans prefer Third Generation 2010 onwards 1000+ of extranets Potential clients can easily shop New Role: Revenue Manager Dynamic Rates
  10. 10. Hotel Technology Trends for 2014 Confidential & Proprietary
  11. 11. Trend 1 Device Automation 40% of hotel guests travel with 3 or more devices Make sure your guests have electronic (adequate and easy-to-reach plugs, bandwidth capabilities) and ergonomic (seating and surfaces) support they expect Confidential & Proprietary
  12. 12. Trend 2 Virtual Bookings 57% travel reservations are made on the internet 65% same-day hotel bookings made from smartphone Invest in a cloud-based Property Management System and e-Distribution Gateway, which provide easy access and the ability to update in real-time Confidential & Proprietary
  13. 13. Trend 3 Leverage the Billboard Effect 14% increase in direct 1.5% increase in ADR bookings due to OTA listings (Average Daily Rate) The increase in offline bookings of a property when it is listed on an Online Travel Agency (OTA) is termed as the Billboard Effect. This season, invest to capture a greater visibility on the web. Confidential & Proprietary
  14. 14. Trend 4 Wi-Fi is King.. 38% guests report Wi-Fi as a 85% guests want free key factor while booking a hotel Wi-Fi access in hotels To start with, provide free Wi-Fi to guests enrolled in select programs, extended-stay hotels and in lobbies of full-service properties, preferred customers etc. Confidential & Proprietary
  15. 15. Trend 5 Social Media rules! 78% customers influenced by 72% guests trusts online reviews company posts during the purchase as much as personal recommendations Employ social media as marketing, communication and guest-service tool. Use online reputation tools not only to manage reviews, but also for customer engagement. Confidential & Proprietary
  16. 16. Trend 6 Meta Search helps largest OTAs 57 Currently Kayak sends times more people to the OTAs than to sites. Confidential & Proprietary 50% Nearly of TripAdvisor’s revenue comes from Priceline Inc and Expedia Inc
  17. 17. Thank You US Sales Office: eRevMax Inc. 37 North Orange Avenue, Suite 500 Orlando, Florida 32801, U.S.A UK Sales Office: eRevMax Ltd. 28 Leman Street London E18ER, United Kingdom Tel: +1 (321) 251 6559 Fax: +1 (321) 206 8630 E-mail: Tel: +44 (0) 20 7422 7528 Fax: +44 (0) 44 (0) 20 7265 5100 E-mail: Visit us at Confidential & Proprietary 17