The Internet in the hotel industry has been a revolution. No doubt about that. It has completely changed the way we find, discover and book hotels within 10 years. I would personally put the big turning point in 2002.
However, how much the Internet has actually improved the bottom line in the hotel industry? Have we seen an increase of occupancies? Average room rates? REV PAR? Gross Operating Profits? While the Internet and social media have revolutionized the way we promote hotels and sell rooms, are we spending less on sales road shows? Have we seen a decrease in sales departments payroll? Or have the savings simply been re-allocated to the newly created large e-commerce departments (and related search engine marketing expenses)?
In other word, if the technology has increased the efficiency and rationalize expenses, has it been simply balanced by a dramatic increase of all sorts of new expenses?
Or have the buyers (guests) been the only big winners in a revolution that was initiated by the sellers (hotels)? Have the hotels lost out at their own game?
I have started writing a white paper about the above and I would love to hear your opinion and experiences. Please feel free to share here or email me at fabrice_burtin (at) yahoo.com.
Fabrice Burtin – July 2010
Anthony Green
July 13, 2010
Good question. I believe it has, and specifically for small, independent hotels.
Daphne Mavrommati
July 16, 2010
It has turned us into paranoid computer slaves! Both as hoteliers and as potential hotel guests. As hoteliers, we are constantly fussing about our reviews and worrying about overbookings by overlapping online booking systems… As potential hotel guests we are never sure if the website pictures are real and which review to trust… In short the opportunities are fantastic, but the psychological cost unbearable!
Fabrice Burtin
July 16, 2010
I completely share your point. The time we spend on internet nowdays is a killer. I was tweeting about that matter this morning actually. Is it physically possible to absorb all information given to us by the internet and still have a life? Same for the hospitality industry. The amount of information a hotel has to digest on marketing websites, best practice sites, social media sites, travel review sites, third party travel sites etc. is absolutely phenomenal. I suggest you read http://a.nthonygreen.com who has a good opinion on the way internet has changed the life of small independent hotels like yours.
David Morton
July 26, 2010
Hotel sales & marketing has always been predicated on ‘relationship, relationship, relationship’. In the historical fixed rate environment (remember when tariff cards were printed in advance, valid for an entire calendar year?) pre-Internet – more interaction, more appointments, more linkages were all good, as rate stayed constant.
In today’s Internet world, lowest rate is the overwhelming driver and open-minded potential guests, who don’t particularly care in which specific hotel they stay in a given location, use broadband Internet as the most powerful hotel ‘revenue reduction’ system ever invented.
Fabrice Burtin
July 26, 2010
Hi David, Thanks a lot for sharing your view on the matter. I have actually listened with a lot interest to your interview with Josiah last week on http://www.hotelmarketingstrategies.com/david-morton-book-direct/. You’ve explained with brutal simplicity the concept of rate parity and why this is inevitable. Online marketing and pricing policies cannot be dissociated.
What the internet has done is to flatten the distribution channels. What used to be a very complex industry, with multiple distribution channels, has been rationalised with most transactions going through one large pipe ( with the exception of the leisure groups segment).
These channels are not anymore the private hunting grounds of the big chains and the commercial gap that existed before with independent hotels is being reduced. The famous advertising tagline TAKE ME TO THE HILTON has lost a lot of its power as staying at the Hilton is not a forced obligation anymore… As you said, guests don’t particularly care in which specific hotel they stay in a given location. A large choice are at their fingertips!
The waterfront shaw
November 4, 2011
Hi,
Great Blog. I am totally agree with your blog that internet is really a revolution for hotel industry. Many hotels are taking advantage of internet. Thanks for sharing this information with me.