Case 2 Reverse Auction

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Case 2 Reverse Auction

  1. 1. REVERSE AUCTION SITES BENEFITS FOR THE HOSPITALITY SECTOR
  2. 2. 1- Reverse travel auctions’ history 2- How does a reverse travel auction work? 3- The case of zujireverseauction.com 4- Sites that give customers advice on using reverse auctions 5- How can a hotel best participate in a reverse auction site ?
  3. 3. Reverse travel auctions’ history <ul><li>Reverse auction sites appeared in the online market thanks to the increase of use of the internet in the late 90’s. </li></ul><ul><li>1995 : Creation of the first online reverse auction : Freemarkets.com (bought by Ariba in 2004) </li></ul><ul><li>In 2000, Priceline.com was known for selling gaz and petrol through reverse auctions. It becomes the most famous reverse auction website. The site is now known thanks to its famous “Name your own price” policy. The site displays car rental, hotels, trips, air tickets… at the lowest price. </li></ul><ul><li>Reverse auctions are now used by many businesses to sell their inventories instead of loosing it. </li></ul>
  4. 4. How does it work ? In REVERSE AUCTION : The bidder is the SELLER and not the buyer. BUYERS create a project description and post it online. Invitations are then sent out to potential vendors who place a bid and describe their qualifications and the details of what their bid includes The sellers compete to sell goods to the buyer at the LOWEST PRICE .
  5. 5. How does it work ?
  6. 6. The case of ZUJI http://www.zujireverseauction.com
  7. 7. The case of ZUJI http://www.zujireverseauction.com This website essentially deals with Asian countries from 3 to 5 stars hotels : Indonesia, Australia Malaysia, Thailand, Vietnam, China, India and Japan. This website is part of the zuji.com website which is a travel company website. Each day (Monday to Friday) at 12pm, at least one reverse auction takes place in which price fall from 1 to 5 cents per second. As soon as the price is interesting, the buyer must jump on the occasion. This is very interactive for the buyer and allows the company/seller to sell their inventory.
  8. 8. Sites that give customers advice on using reverse auctions <ul><li>Many articles exist to give customers advice on using reverse auctions such as: </li></ul><ul><li>http://www.articlesbase.com/shopping-articles/5-tips-for-successful-reverse-bidding-in-a-unique-bid-auction-1454418.html </li></ul><ul><li>Some websites also exist such as: </li></ul><ul><li>Reverseauction.com </li></ul><ul><li>A blog on reverse auction ( http://www.blogcatalog.com/blog/reverse-auction ) </li></ul>
  9. 9. Reverseauction.com VERSUS reverse-auction-.com A website for everyone who wants to learn about reverse auctions Gives to the customers an overview of how reverse auction works, what are the benefits, its history. The customers cannot contact someone if they have questions The site does not talk about the different reverse auctions sites The site does not give the limits and the threats of using reverse auctions sites. This blog is mainly dedicated for professionals who wants to use reverse auction to develop their business. It is a guide This blog gives latest information and tips about the use of the different reverse auctions websites through articles The blog is linked to google Alert: therefore all the news are updated. This blog is a bit too complicated and not interactive enough for everyday customers.
  10. 10. How can a hotel best participate in a reverse auction site ? A hotel which wants to participate to a reverse auction site should : - First, learn about reverse auction. - Then, study the different reverse auction sites that exist (Opportunities, Threats, Benefits, competitors already on the sites…) - When the hotel picks a or several sites, it should make sure that the sites does not reveal its contact information (address, phone numbers…) to the customers in order to both protect its brand name and also make sure the buyers will not contact it directly to make an offer or threaten it. - Describe as best as it could its hotel and its services : this way the customers will not be disappointed when they arrive at the hotel and will not give a bad mark on the reverse auction website and therefore hotel. - Establish its inventory and make sure it will make money out of it even if the price of its services sold will be very low.

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