Category Archives: Direct Connect

The battle between American Airlines and Online Travel Agencies has hotels cleared for take off

Along with a brighter outlook for the hotel industry comes a new alternative to the high cost of doing business with online travel giants like Expedia and Orbitz.

If you conduct a Google search for “hotels in New York City” the search return will provide more than 84 million results where most feature links to third-party travel sites offering rates for hotels in New York City.

When a consumer elects to book his hotel room through one of these third-party sites it could cost the hotel more than eight times the transaction cost as compared to if the same transaction were to be booked directly with the hotel.

According to a much discussed article released by Hospitality eBusiness Strategies titled In Hospitality, Not All Internet Bookings are Created Equal a direct booking through the hotel’s website is approximately $13 per transaction whereas a booking through a third-party site could cost the same hotel nearly $108 per transaction.

“During tough economic times hotels historically relied on the OTA distribution model to help get rooms sold,” said Chris Wenz, Partner & Co-Founder of Hotelmine, “but now that the hospitality industry appears to be in a recovery mode, there’s no better time than now for them to re-think their distribution strategy.”

‘Digging in their heels”

OTAs are not going away and most industry insiders would suggest that they may be digging in their heels with hoteliers much the same way they are with American Airlines in order to control product offerings, pricing, and lucrative contracts that provide abnormally high commissions and wholesale rates.

“A number of hoteliers and hotel management firms that we have known for years are suggesting that they will address their online marketing strategies and ‘best practices’ in order to take back some of the ground that they lost over the past four years,” Wenz said.  “That’s why a direct connect distribution model makes sense for both the hotel and the consumer because the hotel can reduce their distribution and conversion costs and have more of a profit margin to create incentives and value-adds for the consumer.”

Examples of these best practices include;

  • Strict rate parity, a best rate guarantee, and don’t allow a third-party to undersell a hotel.
  • Hotels will need to expand their social media presence on sites like Facebook and offer special deals or promotions to those who are following them on the site.
  • And finally, a hotel needs to begin to analyze options that will move them beyond traditional search methods and engage prospective consumers the very moment they start thinking about travel.

“The Concept”

Wenz, who has a background in developing technology solutions for group and leisure travel, recognized a void in the marketplace and began to design a solution that would directly connect a customer with a hotel.

“I have been following online leisure travel and social media trends for the past five years and came up with the concept that is now Hotelmine,” said Wenz.

Hotelmine may look like any other leisure travel site but that’s where the similarities stop.

The site’s model combines a Business 2 Consumer platform with a Peer 2 Peer social media architecture that allows consumers to book direct with the hotel and to share their research, travel plans, and transactions with family and friends on the top social media sites.

Hoteliers have full control over their offerings and sell products, services, and value-adds the way they want to sell them in a transparent environment where consumers can make an informed decision about which hotel best suits their taste or budget.

When it’s time to book, the consumer books directly by calling the hotel or through the hotel’s website booking engine.

“The countdown’s on”

“We are now tying up some loose ends with the site and should have it ready for the scheduled soft launch on February 14th,” Wenz stated, “and we are continuing to pre-register new hotels on almost a daily basis.”

“We couldn’t be at a better place and at a better time,” suggested Wenz, “and the feedback and response from the hotel community has been overwhelming and continues to spur us on to the successful launch of Hotelmine.”

Tom Costello is the CEO, Partner & Co-Founder of Groups International, a company that provides marketing, consultative services, and technology solutions to the group and leisure travel markets.  Connect with him on TwitterLinkedIn, and Facebook or contact him by email.