HOTELMARKETING.COM

Travel search engines turn up the heat for hotels

December 13, 2004 |

The hotel industry, already struggling to cope with the popularity of Internet reservations among customers, now faces further pressure from the development of 'Travel Search'.

The hotel industry, already struggling to cope with the popularity of Internet reservations among customers, now faces further pressure from the development of ‘Travel Search’.

Travel search engines are a new development in Internet travel, and include Sidestep, Yahoo’s Farechase and Mobissimo, with AOL planning to launch its own travel search engine in 2005. They operate like referral services, searching the Internet for the lowest prices and receiving a commission for every sale they make.

The price transparency that travel search engines make possible puts additional price-pressure on hoteliers, who are already paying commissions on an increasing percentage of their bookings coming through online travel agents such as Travelocity, Expedia and Orbitz.

“By using travel search engines, customers can now scan the lowest prices available for a particular city or hotel”, said Graham Caswell, CEO of Hotel Sales Online, an Internet marketing company specialising in the hotel industry. “The whole business model of travel search is to help the consumer find the lowest possible price, so this development can only increase price competition in the hotel industry”.

“Everybody wants the lowest possible price and its easy to compare hotel room prices, especially on the Internet”, said Caswell. “The problem is that every hotel is different, and offers different facilities, different levels of service and a different location. In order to emphasise these differences and avoid having their hotel rooms turned into commodities, hoteliers must communicate with the customer directly”, he said.

The Internet has revolutionized hotel marketing, as more and more hotel customers prefer to book online.  However many hoteliers, particularly from individual hotels and small hotel groups, have found it difficult to connect with Internet customers directly and so rely on various travel intermediaries for an increasing percentage of their bookings.

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