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No 2000/5 - Paris, Monday August 28, 2000


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  ASPs arrive in the eTourism sector. We look at  

Businesses built on the ASP (Application Service Provider) model are currently enjoying a bout of success.

And although a recent study conducted by the research firm Dataquest predicts that 60% of ASPs will have gone out of business by 2001, investors are enthusiastic about them. Benefits include: Repeat business via subscriptions to the service, shared means, after-sales service reduced to the strict minimum, etc.

Up to now, ASPs have mostly been present in the computing field (e.g.: remote back-up of data, shared access to ERP functions); they are now starting to appear in the eTourism sector.

The recent launch of is a case in point. The idea behind the service is to offer hotel owners and holiday promoters ready-made Internet modules for their own eTourism websites. offers a standard booking engine, reporting functions, access to a base containing information about potential customers, an administrative service (useful for updating hotel room availability) and opt-in tools for eMarketing operations.

Customers can choose the services they want to integrate into their own websites from the range offered by The benefits are obvious: there are no heavy IT development costs, it is cheaper to contact customers and there is an online service for monitoring bookings. has positioned itself clearly as a web services subcontractor.


In our opinion, this type of service should rapidly develop around the needs of general public eTourism sites: reservation engine, product details, consumer information, email services. Moreover, this service philosophy is similar to that of content syndication (e.g.: buying news bulletins to put on your site's home page).

But, the most innovating point seems to us to be in the way the new ASP services are paid for. This is based on a monthly fee ($74 for's basic formula).

This is a real break from normal tourist industry practices, generally based on a commission system. is using this as a key selling point to convince its customers of the benefits they will reap - particularly if their turnover increases during the subscription period!

The ASPs are bringing a new way of functioning to the eTourism sector, based on more traditional customer/supplier exchanges in which suppliers are paid according to their cost structure.'s investments are centred on its information system, the ergonomy of its services and the quality of access to its technical platform.

As its role is simply to provide the two parties with web services enabling them to exchange information more efficiently, it is not directly involved in the relationship between travellers and hoteliers. So it seems logical not to link payment for its services to the result of the transactions between the end customer and the hotelier.

However, eTourism companies are not used to working in this way and usually prefer the commission system in which they only pay their partners when they successfully bring them business.

I believe, however, that the low subscription fee will allow this type of service to take off fairly quickly. On the other hand, setting up the ASP services is relatively simple and does not really constitute a technological entrance barrier.

The entrance barrier will therefore be dependent on the number of customers each ASP has. As the numbers increase, the fixed costs could be divided between the different customers, enabling the subscription fee to go down further.

There will certainly be some tough battles in this field over the coming months as an increasing number of newcomers enter the market.

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