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OTA’s merging markets

July 6th, 2011

By far the most interesting supply chain in hotel industry is the development of the Online Travel Agents (OTA). As the competition is increasing, the OTA’s are continuous looking into ways how to improve business. The first start happened with preferred listings, which resulted in a higher commission charge to the hotels. Hotels could improve their ranking on the website, by paying a higher commission rate. Higher on the list, could results in more bookings.

Recently, OTA’s have been offering free booking engine, or low cost booking engines to use on the hotel’s own website. It will make updating of rates and allocations easier, as you will have to manage one extranet. As hotel’s are focusing on cost control, they should be aware that these models can push more business to the OTA website and results in more and higher commission payments. Alternatively, the hotel could sign up with a channel manager to create a solution to the distribution of all the Extranets. As the OTA has no strong commitment informs of investment, they will not have the real interest to sell you particular hotel, just any which will sign up. More can be learned at our page on Web marketing, how you can effectively market your website.

The latest trend to capture the interest of online shoppers would be to offer the complete package. Expedia, Orbits and Travelocity, have already long lasting relationships with the Airline industry and selling tickets online (even combined with the best hotels deals) As this has proven to be successful in the long haul market, Expedia has teamed up with Air Asia and selling also Air Asia flights in a very strong Asian market.  Also their biggest competitor in Asia, AGODA has entered into a partnership with Cathay Holidays Limited, the travel agency arm of Cathay Pacific Airways, through which Cathay Holidays will distribute agoda.com’s hotel product.

With the deal, travelers booking a ticket through CathayPacific.com will now have access to agoda’s worldwide instantly-confirmable inventory, while Cathay Holidays will be able to provide up-to-the-minute rates and promotions in more than 100 countries.

This will be the only beginning, as OTA’s have a very customer friendly business model, the classical travel agent is currently booking rooms via the OTA and soon they will book tickets as well. This would be the service of a travel agent to those travelers, who have no experience to book their trips on the internet.

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Amazing arrivals Thailand

July 5th, 2011

According to the latest report by TTG Asia, Thailand is still a popular destination and the marketing efforts have paid off. Their slogan, Amazing Thailand, achieved last year over 15 Million foreign visitors, which will likely be surplussed this coming year with 19.5 Million foreign arrivals.

The old slogan, Amazing Thailand, is good for 24.85 Billion USD in revenue next year. Again it shows how important Tourism is for the region and that strategic planning and management is key to take a good share of this revenue.  The TAT is planning to introduce two key marketing messages for the Asian and one for the US and European market. In addition they too have seen the importance of the digital marketing and will focusing more of their strategy on social network channels as Facebook.

Choosing the rights strategy is a key success factor to achieve your marketing plans. Though social media is still very weak in their contribution to the decision making process in the tourism industry according to a research done by Google. The word of mouth is still the number one.

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Price war for Bangkok Luxury Hotels

April 30th, 2011
Bangkok hotels have been seeing signs of recovery in the first three months of the year after a problematic 2010. But growing supply will continue to fuel the ongoing price war, according to Colliers International Thailand’s market report Q1/2011. (source: TTG Asia)

Hotels in the luxury segment saw occupancy rates increase to more than 70 per cent in the first quarter, compared to the mid-60 per cent figure in the same period last year, and the mid-50 per cent figure in the fourth quarter of 2010.

In contrast, their average daily rate (ADR) fell 16 per cent to just above 4,000 baht (US$13) from more than 5,000 baht in the first quarter of 2010, and about 5,000 baht in the fourth quarter of 2010 due to competition from upper-scale hotels, where ADR in the first quarter of this year remained stable year-on-year in the mid-3,000 baht range.

Meanwhile, their revenue-per-available-room (RevPar), which dropped significantly in the second quarter of last year during Bangkok’s political turbulence, improved quarter-on-quarter, as Thailand gradually regained traveller’s confidence through to the first quarter of this year.

“The concern now is that the industry may be in the beginning of a rate reduction spiral, especially with the expected future growth in supply in the luxury sector. Hotels in this sector already are highly competitive when compared to other cities in the region,” according to the report.

Colliers further stated that Bangkok’s current inventory of 15,100 rooms in the luxury hotel segment is slated to expand by 1,400 new rooms this year and another 6,000 rooms in the next two years.

Bangkok has a total of 698 hotels and 102,483 rooms, according to the Thai Hotels Association. At least 12 hotels and 2,362 rooms are set to open this year, with another eight hotels and 1,929 rooms to be added next year.

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