Evolution of Channel Management


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  • 1946:Wikipedia - http://en.wikipedia.org/wiki/Computer_reservations_systemOriginsIn 1946, American Airlines installed the first automated booking system, the experimental electromechanicalReservisor. A newer machine with temporary storage based on a magnetic drum, the MagnetronicReservisor, soon followed. This system proved successful, and was soon being used by several airlines, as well as Sheraton Hotels and Goodyear for inventory control. It was seriously hampered by the need for local human operators to do the actual lookups; ticketing agents would have to call a booking office, whose operators would direct a small team operating the Reservisor and then read the results over the telephone. There was no way for agents to directly query the system.[citat1953:Wikipedia - http://en.wikipedia.org/wiki/Computer_reservations_systemIn 1953, American Airlines CEOC. R. Smith chanced to sit next to R. Blair Smith, a senior IBM sales representative, on a flight from Los Angeles to New York. C.R. invited Blair to visit their Reservisor system and look for ways that IBM could improve the system. Blair alerted Thomas Watson Jr. that American was interested in a major collaboration, and a series of low-level studies started. Their idea of an automated airline reservation system (ARS) resulted in a 1959 venture known as the Semi-Automatic Business Research Environment (SABRE), launched the following year.[3] By the time the network was completed in December 1964, it was the largest civil data processing system in the world.1959: http://en.wikipedia.org/wiki/Sabre_%28computer_system%29 Sabre Holdings' history starts with SABRE (Semi-automated Business Research Environment), a computer reservation system which was developed to automate the way American Airlines booked reservations.In the 1950s, American Airlines was facing a serious challenge in its ability to quickly handle airline reservations in an era that witnessed high growth in passenger volumes in the airline industry. Before the introduction of SABRE, the airline's system for booking flights was entirely manual, having developed from the techniques originally developed at its Little Rock, Arkansas reservations center in the 1920s. In this manual system, a team of eight operators would sort through a rotating file with cards for every flight. When a seat was booked, the operators would place a mark on the side of the card, and knew visually whether it was full. This part of the process was not all that slow, at least when there were not that many planes, but the entire end-to-end task of looking for a flight, reserving a seat and then writing up the ticket could take up to three hours in some cases, and 90 minutes on average. The system also had limited room to scale. It was limited to about eight operators because that was the maximum that could fit around the file, so in order to handle more queries the only solution was to add more layers of hierarchy to filter down requests into batches1969: http://en.wikipedia.org/wiki/ARPANETThe Advanced Research Projects Agency Network (ARPANET) was one of the world's first operational packet switching networks, the first network to implement TCP/IP, and the progenitor of what was to become the global Internet. The network was initially funded by the Advanced Research Projects Agency (ARPA, later DARPA) within the U.S. Department of Defense for use by its projects at universities and research laboratories in the US. The packet switching of the ARPANET, together with TCP/IP, would form the backbone of how the Internet works. The packet switching was based on concepts and designs by American engineer Paul Baran, British scientist Donald Davies[1][2] and Lawrence Roberts of the Lincoln Laboratory.[3] The TCP/IP communication protocols were developed for ARPANET by computer scientists Robert Kahn and Vinton Cerf.1973: http://en.wikipedia.org/wiki/History_of_mobile_phonesPrior to 1973, mobile telephony was limited to phones installed in cars and other vehicles.[18] Motorola was the first company to produce a handheld mobile phone. On 3 April 1973 when Martin Cooper, a Motorola researcher and executive, made the first mobile telephone call from handheld subscriber equipment, placing a call to Dr.Joel S. Engel of Bell Labs.[5][6] The prototype handheld phone used by Dr. Cooper weighed 1.1 kg and measured 23 cm long, 13 cm deep and 4.45 cm wide. The prototype offered a talk time of just 30 minutes and took 10 hours to re-charge.[7]John F. Mitchell,[9][10][11] Motorola's chief of portable communication products and Cooper's boss in 1973, played a key role in advancing the development of handheld mobile telephone equipment. Mitchell successfully pushed Motorola to develop wireless communication products that would be small enough to use anywhere and participated in the design of the cellular phone.1985: http://www.americanairlines.in/intl/de/aboutUs/history.jsp
  • 1986: http://www.revenueanalytics.com/pdf/3248_rpm201039a.pdf1993: Galileo was formed in 1987 by nine European carriers -- British Airways, KLM Royal Dutch Airlines, Alitalia, Swissair, Austrian Airlines, Olympic, Sabena, Air Portugal and Aer Lingus.[3]In response and to prevent possible government intervention, United Airlines spun-off its Apollo reservation system, which was then controlled by Covia. Galileo International was born when Covia acquired Europe's Galileo and merged it with the Apollo system in 1992.[3]1994:Finding initial success in the travel and technology niche, Davis developed another service targeted to that same market. He followed up by establishing the Hotel Clearing Corporation (HCC) in 1992. HCC enabled travel agents to consolidate their hotel commissions in one check for a small fee. In addition, in 1994 the company launched the first Internet site for booking hotels in real-time. It was called TravelWeb. Consumers responded well to the new service. A year later Davis created Pegasus Systems as the umbrella under which all three technological travel services operated. Pegasus Systems was the parent company of THISCO, HCC, and TravelWeb.Read more: http://www.answers.com/topic/pegasus-solutions-inc#ixzz2magmA2PM1995:1994–1997: Beginnings & SpyglassThe first Internet Explorer was derived from SpyglassMosaic. The original Mosaic came from NCSA, but since NCSA was a public entity it relied on Spyglass as its commercial licensing partner. Spyglass in turn delivered two versions of the Mosaic browser to Microsoft, one wholly based on the NCSA source code, and another engineered from scratch but conceptually modeled on the NCSA browser. Internet Explorer was initially built using the Spyglass, not the NCSA source code[2] The license to Microsoft provided Spyglass (and thus NCSA) with a quarterly fee plus a percentage of Microsoft's revenues for the software.http://en.wikipedia.org/wiki/History_of_Internet_Explorer#1994.E2.80.931997:_Beginnings_.26_Spyglass1997: http://www.placestostay.com/about/#about-us
  • 199, 2000: Phocuswright,eTrak Reporthttp://www.wiredhotelier.com/news/4015397.html 2001: Expedia CEO Richard Barton declines to give a figure for its share of the online travel market, but the company -- the largest of such Web services -- is clocking triple-digit annual growth in gross revenues. Net operating income increased by nearly 200% from the fourth quarter of 2001 to the first quarter of 2002, from $6.1 million to $17.8 million. That's a lot of hotel rooms, rental cars, and plane tickets.http://www.businessweek.com/stories/2002-07-17/the-view-from-expedias-pilot In 2002 46,997,385 million hotel reservations were made through the top four GDS systems alone. Based on an average daily rate of US $127 and an average length of stay of 2.2 days, 2002 GDS hotel bookings produced over 103 million room nights and US $13.1 billion in revenue for hotels worldwide. Source: HEDNA ninth annual Survey of GDS Hotel ReservationsBy 2002, over 51% of the total annual online bookings of $6.3 billion were earned through hotels’ own websites (i.e., remaining 49% were through those specialized online travel agencies).2003: Share of annual online hotel booking rose by 13% to USD 99 billion. SEO gets popular. In 2003 there was a 49% increase in online hotel sales over 2002. Today 9% of total hotel bookings (one in 12) is made online. By 2005 20% of all hotel room bookings (one in 5) will be made online. Source: PhoCusWright Hotel & Lodging Commerce 2002-2005: Distribution Strategies And Market Forecasts. For the first six months of 2003, total Internet reservations showed a growth of 36 percent compared to the same period in 2002. Hotel statistics show that almost 6 in 10 people who book travel on the Internet also reserve hotel rooms
  • 2006:The online channel share stands 37.6%. PhoCusWright projects that online travel agencies will represent 54% of the market in 2006.
  • 2010: “Google is seeing that mobile hotel queries have grown almost 3000% in three short years”May 13, 2010 Interview with Rob Torres, managing director for Travel, GoogleByRitesh Gupta The usage of mobile phones for travel planning and booking continues to be on the rise. This trend is gaining prominence especially with tangible results being shared by various travel companies.Published: 13 May 2010Interview with Rob Torres, managing director for Travel, Googlehttp://www.eyefortravel.com/mobile-and-technology/%E2%80%9Cgoogle-seeing-mobile-hotel-queries-have-grown-almost-3000-three-short-years%E2%80%9D 2012: http://www.buuteeq.com/blog/infographic-hotel-digital-marketing-web-mobile-social/ 2013: According to data compiled by Hotels.com, mobile apps are vital for last-minute hotel bookings. The travel expert found that a whopping 60 percent of mobile bookings from the first half of 2013 were made for same-day check-in, while 68 percent of bookings were made within two days of check-in.
  • Hotel guests travel with an increasing number of personal devices and their own information and entertainment content. A SmartBrief poll showed that 45% of hotel guests travel with two devices and 40% with three or more. - See more at: http://www.hotelnewsnow.com/Article/10764/10-trends-in-hotel-technology#sthash.0CYLzCic.dpuf
  • http://www.statisticbrain.com/internet-travel-hotel-booking-statistics/Statistic Verification Source: eTrack, eMarketer, Alexa.com Research Date: 6.18.2013 Arguably one the best features of the internet is the ease at which one can research and book travel plans. Internet travel booking revenue has grown by more than 73% over the past five years. Online Travel Booking StatisticsData Number of travel bookings made on the internet each year 148.3 million Percent of all travel reservations made on the internet 57 %Percent of same day hotel reservations made from a smartphone 65 %When looking at the top 30 brands, online hotel bookings accounted for 57 percent of all reservations made in late 2010. That is an increase of 19 percent since 2006 according to an eTRACK report and speaks to the urgency for hotels to get in the game with a custom site that caters to online room reservations.As online travel reservations have reached their highest peak, smartphones have enabled a new form of Internet-based room booking to step into the spotlight, adding to the complexity of developing a successful Internet marketing strategDespite the obstacles, there is a small but significant amount of travel booking being done via smartphone. And much of that booking is same-day purchases, according to eMarketer. When travel shoppers use their mobile phones, they tend to be looking for a last-minute flight, car rental or hotel room. Recent data reported by some of the largest online travel agencies showed just how common last-minute booking is: Both Orbitz and Travelocity have reported that more than 60% of hotel bookings made on mobile phones were for the same day.
  • A recent survey of 415 travelers by Hotel.com reported that 38% want free and fast Internet access in their hotel rooms. Of course they would, and I would like free International telephone calls, free first run movies, and free mini-bar.According to a poll taken by the SmartBrief online service, 85% of travelers believe Wi-Fi in hotels should be free. Kimpton and Marriott have approached the issue in different ways. At Kimpton, said Nelson, the service is free for guests who enroll in the chain’s loyalty program. - See more at: http://www.hotelnewsnow.com/Article/10764/10-trends-in-hotel-technology#sthash.HwO9aN3g.dpuf
  • http://www.forbes.com/sites/marketshare/2012/05/07/are-brands-wielding-more-influence-in-social-media-than-we-thought/Survey by MarketForceAs one who has read, dissected and written about many a study regarding social media, brands and consumers, I can tell you I for one was quite surprised to see read the findings of a survey recently conducted by Market Force – a worldwide leader in customer intelligence solutions.In querying more than 12,000 consumers in the US and UK, they wanted to see how consumers engaged with varying industries – retail, restaurant, travel, entertainment and financial businesses to be specific, via the big dogs of social media: Facebook, Twitter, LinkedIn and Google+.One finding which was not surprising was the fact that 81% of US respondents indicated posts from their friends directly influenced their purchase decision. This finding supports an early study done by the Chief Marketing Officer (CMO) Council and Lithium, a social media tech firm, which revealed 80% of respondents “tried new things based on friends’ suggestions.”The finding that did surprise me, however, was that 78% of respondents said the posts by companies they follow on social media impact their purchases.This is surprising to me because the aforementioned surveys and studies re: the use of social media, brands and consumers I have disseminated pretty much said the same thing which is that consumers are not all that interested in content but rather want something i.e. a promotion, giveaway, etc. when it comes to social media and their favorite brands.The findings of SearchEngine Land’s Local Consumer Review Survey (2012) show a positive shift in consumer trust and appreciation of online reviews.Approximately 72% of consumers surveyed said that they trust online reviews as much as personal recommendations, while 52% said that positive online reviews make them more likely to use a local business.http://searchengineland.com/study-72-of-consumers-trust-online-reviews-as-much-as-personal-recommendations-114152
  • 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 brand.com 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: usa@eevmax.com Tel: +44 (0) 20 7422 7528 Fax: +44 (0) 44 (0) 20 7265 5100 E-mail: uk@erevmax.com Visit us at www.erevmax.com Confidential & Proprietary 17