Hoteliers: Internet sales cut both ways
January 28, 2004 |
The business model for online hotel bookings is changing. The economic recovery has put hotels in a stronger bargaining position when it comes to renewing contracts.
The business model for online hotel bookings is changing. The economic recovery in tourism and the national economy has put hotels, especially the national chains, in a stronger bargaining position when it comes to renewing annual contracts.
Many chains will no longer guarantee the lowest rates to the online services, Loute said. Instead, they’ve started their own Web sites and reserved the best rates for those customers.
E-commerce is a double-edged sword. When you’re empty, you need to put heads in the beds to make a profit, and online services help.
When the hotel is full, it loses revenue because it can’t sell the rooms it has obligated contractually to the online services. Most contracts allow the hotel to sell those rooms only if the service hasn’t booked them within 48 hours of the arrival date.
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