The document provides guiding principles for destination e-commerce. It discusses that a destination management organization (DMO) should ensure all local business categories have access to an e-commerce system, not just accommodation. Customers should be able to view and book multiple products in one place. The DMO should aim to distribute inventory on major online shops and platforms to reach 80% of customers who use 20% of media. It then discusses various channels for distributing e-commerce offers, including direct sales on merchant websites, resellers who sell direct to customers like Expedia, wholesalers who sell to travel agents, and global distribution systems used by travel agents. It emphasizes the importance of distribution beyond a company's own website.

1. University Of Kashmir
 PRESENTED BY: Faizan Irshad
 19122111010
 Presenting Topic: Guiding Principles for Destination E-Commerce

2. Guiding Principles for
Destination E-commerce

3.  Guiding Principles for Destination E-commerce
• The DMO should aim to ensure that all categories of business in the destination
have access to an e-commerce system. Some DMOs have made bookings for
accommodation the priority, because this may be the deciding factor for the visitor
before they commit to the destination. But e-ticketing for major events and shows,
multi-venue passes, and rail and coach passes, is often equally important
• Ideally, customers should be able to see a unified view of the price of all the
products, and be able to book as many of them through the one view as will secure
their decision to come. This is an essential role of a destination website
• Apply the 80:20 rule – that 80% of people use only 20% of the media. Thus the
DMO should aim to have its inventory on the right ‘shelves’ in all the most
important online shops. These should be the merchant’s own website, and the sites
of retail agents and wholesalers. The DMO should allocate just as much resource to
achieving this distribution as to presenting the e-commerce service on its own site.

4.  Channels for Distributing E-commerce Offers
• As in pre-internet days, there is constant competition online
between those who sell direct and those who are intermediaries.
Most individual tourism suppliers will opt to use both, and the
DMO should be helping them in both.
• Like the display in a walk-in shop, any e-commerce offer needs to
be put in front of enough of the right potential customers. So it is
vital to consider how much distribution can be achieved, beyond
whatever your own website can provide, and at what cost.

5. Direct Sale
• The first channel of distribution is when the merchant (a hotel,
for example) acts as their own e-commerce direct seller.
• Every large business, and a rapidly increasing number of small
businesses, now do this.
• In many countries it is made easy for SMEs not just by the e-
commerce services of their DMO, but by companies that offer
independent e-commerce systems to buy or rent, such as
Guestlink or Frontdesk.
• Some may rely solely on buyers finding their website or being
directed to it, but many also use other channels as well.

6.  Via Resellers Who Sell Online Direct to the Public
• If the customer’s contract is with the reseller then the reseller is a tour
operator. If the customer’s contract is with each element (hotel, transport,
and so on) that they are buying, then the reseller is a retail agent. Online,
thanks to the growth of dynamic packaging, they now look much the same
to the customer. Examples are eBookers in Europe, Orbitz in the United
States of America, Expedia, Opodo, Lastminute, Superbreak in the United
Kingdom, and Wotif in Australia and New Zealand. There will be different
market leaders in each of your target markets.
• These offers are often summarised in price comparison websites such as
www.travelsupermarket.com. Users of this site can compare prices of
more than 3,000 Bed&Breakfast (B&Bs) in the United Kingdom from over
20 accommodation websites including SME specialist Eviivo (which runs
Frontdesk), as well as Laterooms, Active, Superbreak, eBookers and
Opodo.
• The more specialist retail travel agents sell fully independent tours (FITs),
whether bespoke or prepackaged. Their sales outlets may include websites
and walk-in shops.
• They may also have a central call centre, or distribute calls from a central
telephone number to their shops. They buy their stock direct from hotels
and carriers, and from wholesalers

7.  Via Wholesalers Who Sell to Specialist Retail Travel
Agents
• Wholesaler websites give retail travel agents an easy view of a
large number of supplier websites’ content, and allow the agent to
pick and mix to assemble the FIT. Examples are www.travelcog.com
and www.agents.octopustravel.com
• Online agents now sell local services that were previously only
bought direct by the visitor locally. An example is Octopustravel,
with 15,000 agents worldwide registered, up 68% in 2006.
• These wholesalers generally deal with any suitable business that
will give them an allocation of rooms, so the DMO should find out
which wholesalers are most active in their destination, and inform
their hotels.
• There is also a good opportunity for destinations and wholesalers
to give or to take SME inventory from each other

8.  Via the Global Distribution Systems
• The global distribution systems (GDS) are Amadeus, Sabre, Galileo and Worldspan.
• These are the linked computer systems that, before the internet arrived, allowed over 450
airlines, 50 major car rental companies and ‘only’ 37,000 hotels to be booked by around
half a million travel agents anywhere in the world.
• The hotels they sell are mostly those of the major chains. Costs for the travel suppliers in
maintaining their ICT links to the GDSs are high, and so is commission on bookings to the
GDS and the agent. They remain very strong for business travel – for example, the new
Silverjet low-cost business-class airline expects 60% of bookings from agents via the GDS.
• GDS distribution is highly significant for medium-size hotels and for groups of smaller
hotels that have a common reservation system. Also, they help to power much of the
content of the global website brands, especially those they own: Sabre owns Travelocity
and LastMinute, for example, and Galileo’s parent Travelport also owns Expedia and
Octopus. An example of the onward distribution they achieve is that Octopus is providing
hotel accommodation, and call centre back-up, on the 40 websites of Singapore Airlines.
• Because most of the GDS product is in big hotels, there is a market gap for e-commerce
services sold through the GDS that offer a good range of small, lower-cost accommodation
bookable online in real time.
• There is a huge opportunity for DMOs here, mainly at a national level, if they can meet the
commercial and operational challenges, including the higher level of commission required.

9. Thank You