Does technology
dislike tour operators?

The Internet has
become
the Promised Land
of the discount

A rather alarming study that reveals how far behind actors in the travel sector appear to be. Atinera, an Amadeus subsidiary, recently carried out a survey indicating that the different distribution systems used by American tour operators are still far from fully benefiting from the progress that was made in the technologic sector in the last few years.

According to this study that surveyed a total of 59 American tour operators, 89% of them sell their products through offline travel agents and make 85% of their sales over the phone.

Even though 59% of these tour operators manage to make some of their bookings through the Internet, these bookings are in fact nothing more than pre-reservation forms that are sent by email from the Internet web sites.

Real time bookings are still very rare.

According to this study, 19% of tour operators would make just over 5% of their sales through the Internet when this figure amounts to as much as 16% for travel agents.

The consequence of all this is quite simple: 62% of tour operators declare that they depend on the retail trade for more than half of their sales. Even worse, 32% of tour operators claim that 90 to 100% of their sales depend on travel agents.

Even if we view these figures from another angle, only 24% of tour operators make more than half of their sales directly with their final customers, 16% make less than 5% of their sales directly with them and 21% do not make any of their sales directly with their customers…

The reasons for all this are extremely well highlighted by this survey: 80% of the surveyed tour operators declare that they rely on outdated reservation systems and 9% of them (the smallest ones) declare that they do not have any reservation system at all.

Consequences prove just as big as the technologic gap appears to be: less than 47% of tour operators know how much time they need to make a transaction and less than 16% are actually unable to give an estimate of how much a transaction usually costs!

Of course, the United-States, just as the rest of the world, do have efficient tour operators technologically speaking but this study does not mention any of their achievements nor their online dynamism.

Nevertheless, these figures give us something to think about. People usually say that the tourism sector lives on very small margins, and if we are to believe the conditions described above, we do not see how things might change…

Source : Atinera.com

The Internet has become the Promised Land of the discount

Whether it is in the airline sector, easyjet.com, ryanair.com, buzzaway.com, southwest.com, or in some other sectors, the Internet has actually become a growing vector for the discount prices offered in the eTourism sector.

The latest trend is the one adopted by Six Continent Hotels, which now proves able to offer those of its customers that make an online booking a 30% discount on public prices, as long as the booking is made at least 21 days before the beginning of their stay.

The same offer also applies to Holiday Inn, Staybridge Suites, Inter-Continental and Crowne Plazza; it also proves to be an answer to the numerous discount offers, that prove more aggressive every day, that are now offered on web sites such as Hotwire, Expedia or Travelocity.

The profitability of the Internet discount depends on two key factors: optimised filling up rates as well as online transactions that prove less costly to deal with than offline ones

Nevertheless, if these positive aspects do seem obvious, they prove much more difficult to illustrate in commercial terms: how do you tell those of your customers who are used to paying a high price that they can now get huge discounts by using the Internet?

Pressured by professional discounters, producers have no choice left but to follow the lead, or even precede it.

The online translation of measures such as the one adopted by Hotwire.com is now a real success, as the discount is becoming a noble thing, reaching very select brands such as the Crowne Plazza hotels in the case of Six Continents Hotels.

The discount in the eTourism sector is no longer a marginal market dedicated to bargain hunters only but it is now becoming a wholly normalised product.

After the airline, hotel and car rental sectors at discounted prices, it is now the whole range of products in the travel sector that is being reshaped on the Internet.

Those who refuse to play the game will pay a high price: they will have no choice left but to play second roles on the Internet.