Self confessed nethead, Roderick Eime, reminisces on the birth of the ‘net and examines pitfalls its flourishing future.
It wasn’t that long ago when the Internet was derided as an esoteric plaything for geeks, nerds and the socially incompetent. I remember extolling the virtues of email to my friends and clients in the early ‘90s and triumphantly displaying my first web page in 1994. Some immediately saw the possibilities while many others, even the majority I must say, had to be dragged screaming to the computer. Now, over a decade later, it’s hard to imagine life without a tollpass for the Information Superhighway.
But, the Information Superhighway, like any public thoroughfare is fraught with peril. There are the cyber equivalents of highwaymen, lane-swervers, tailgaters and even car-jackers. Just as our use of the tools and advantages of the new technology have increased so too has our need for increased security and awareness. Once all we had to worry about were silly viruses that pulled faces at us on the screen, now there are Trojan horses, key loggers, spyware, malware, scams and the ever present fear of identity theft. And the speed limit is on an exponential curve; our once plodding 14.4 kbs modems have been replaced by lightspeed ADSL hubs pumping data at 24,000kbs.
Without too much debate, the most staggering recent development has been the Google phenomenon. Beginning with two nerds in a garage in 1996, Google now indexes well over 10 Billion web pages, is valued at US$80 Billion and employs 5,000 people worldwide. Google’s plans for ‘net domination are truly mind boggling. For one thing, they plan to index all the words from every book ever written. Gasp!
Google’s advertising through search keywords is the cornerstone of their financial success, and Internet marketers are only now going to grips with this convoluted formula. The quest for top Google rankings is now paramount.
The State of the Nation
HM canvassed the major players in the on-line booking scene for their take on the changing world.
Hitwise – ‘Travel’ amongst the most popular topics on the web
Hitwise is the leading independent online competitive intelligence service. Hitwise provides its 1200 global clients with daily insights on how their customers interact with a broad range of competitive websites, and how their competitors use different tactics to attract online customers.
We asked James Borg, Marketing Director – Hitwise Asia Pacific, how he saw the trend for Internet traffic heading to travel (and hotel) web sites.
“Travel sites, including destination, airline and hotel sites, account for a huge slice of the total Internet traffic pie. Hitwise predominantly measures traffic to individual sites within a given industry sector and in doing so we turn up some very interesting data.
Some grab-fact tidbits:
• 69% of all travel sites visited by Australians are local
• Travel is roughly equal to sport in Internet popularity (2.5%)
• Virgin Blue claims 90% of flights booked on-line
• Visitors spend 7 mins on average per site
• Monday is the most popular day for travel sites
“Our Director of Research UK, Heather Hopkins, did some analysis recently on the search terms sending UK visits to hotel websites and noticed two particularly interesting things:
– The most searched for hotel brands also have the most visited websites
– Searches for locations make up a larger share of search terms sending visits to hotel websites than do brand searches.
“Travelodge UK, InterContinental Hotels, and Premier Travel Inn own the brands that were most searched for by UK internet users. These hotel chains also have the most visited hotel websites in the UK. This pattern continues down the rankings with the exception of easyJethotels.com which relies on its sister company easyJet for visits rather than its own brand strength.
“So, the most searched for hotels brands also have the most visited websites — but this need not be so! There is tremendous opportunity for smaller hotels to snap up market share from the leading players by capitalizing on the location opportunity!”
Total online accommodation sales in Australia during calendar year 2005 were estimated by Euromonitor International to be A$788.5 million from a total accommodation market valued at A$9,233 million. The compound annual average growth rate for online accommodation has been approximately 42% per annum.
Intercontinental Hotels Group – Keeping brand integrity in online environment
The Internet continues to be an important booking channel for InterContinental Hotels Group across all segments, as customers continue to research and book travel online.
InterContinental Hotels Group promotes its branded booking sites – www.intercontinental.com, www.crowneplaza.com.au, www.crowneplaza.co.nz, www.holidayinn.com.au, www.holidayinn.co.nz and www.priorityclub.com – in all marketing activity.
The Group promises that these sites offer the best available rates for its hotels on the web, through its Lowest Internet Rate Guarantee. This Guarantee stipulates that if a customer finds a genuinely more competitive, all-inclusive rate elsewhere on the Internet, the Group will beat that rate by 10%.
InterContinental Hotels Group was the first hotel Company to introduce a global Internet Distribution Standard, outlining how it wished to do business with third party online travel Companies. One of the benefits of this Standard was to ensure the Group could maintain its Lowest Internet Rate Guarantee.
Between 2003 and 2005, the Group’s hotels in the Asia Pacific region saw a 120% increase in online bookings. In 2003, half of the Group’s online bookings were via its own sites while the remaining 50% were via third party travel portals. By 2005, 65% of bookings were being made via the Group’s own sites, with 35% via third parties.
“Since the introduction of our Internet Distribution Standard and Lowest Internet Rate Guarantee, we have seen a marked increase in popularity of our brand websites. We have also established stronger relationships with online travel companies, who complement what we are doing with our own sites,” said InterContinental Hotels Group regional director of sales and marketing Australia, New Zealand and South Pacific, Karin Nielsen.
“Our Internet Distribution Standard ensures that our online rates are completely transparent for the consumer, whether they’re found on our sites or a third party’s. This is the key benefit of a system that has precipitated a fundamental shift in the way the hotel industry sells online,” Ms Nielsen said.
Wotif.com – Trading strong on back of growing leisure dollar
Launched in March 2000, Wotif.com is the leading online accommodation booking service in Australasia, offering more than 7,900 properties in 38 countries.
The site cur
rently attracts approximately two million user sessions each month and converts this traffic into approximately 110,000 booking each month.
In both 2004 and 2005 Wotif.com was ranked as the number one ‘Travel – Destinations and Accommodation’ website across Australia, by Hitwise (the internet intelligence service).
The increasing popularity of the website as a means to book accommodation is attributed by Wotif.com to a number of key industry drivers:
* General macro-economic conditions – relating to a correlation between growth in disposable income and the level of tourism expenditure, with the Australian economy currently recording strong levels of economic growth while experiencing low inflation and low interest rates
* The increasing level of broadband penetration
* Consumer trust in e-commerce
* Growth of the independent traveller,
* Supplier adoption of the website.
Wotif.com has just announced a strong trading and profit result for FY2006 driven by substantial growth in accommodation sold across all regions available on Wotif.com’s website. Room nights sold increased 40%, reaching 2.74 million room nights (compared with 1.96 million in FY2005), with room nights sold in Australia up 37%, and New Zealand up 42%.
Despite strong growth, online sales still represent only a small percentage of total sales in the Australian accommodation industry. Euromonitor International has estimated online sales represent 8.5% of total accommodation turnover in calendar 2005. Wotif.com believes that the online channel will continue to experience strong growth by attracting customers away from traditional sales channels. It is considered that the convenience, product range, transparency and value provided by the online channel are driving a structural change in consumer behaviour in the sector. This belief is supported by industry estimates, with Euromonitor International forecasting online sales to reach at least 11% by 2010.
Zuji.com – Shorter Lead Times, Short Stays Favour On-Line Booking.
Most hotel stays (overall 36%) are booked in the week prior to check-in, especially in Hong Kong (44%), Singapore (48%) and Korea (44%).
Australians (43%) and New Zealanders (39%) book hotels online with longest lead times in Asia of more than a month in advance of pre check-in, although more than a quarter of hotels (26%) booked online on ZUJI sites across Asia Pacific are booked more than one month in advance of check-in.
In the past two years, comparing available hotel booking patterns in Q2 2004, hotel booking habits have remained reasonably steady in Australia where 46% of hotels were booked with more than a month lead time pre-check-in (now 43%).
Booking lead time has reduced in countries like Singapore, where in Q2 2004, only 28% of bookings were made during the week before check-in – now 48%. Similarly, in Hong Kong, in Q2 2004, only 19% of bookings were made during the week before check-in – now 44%.
One, two and three night stays dominate the hotel booking trends, with 78% of
hotel bookings comprising 1/2/3 night stays. While predominantly short stay bookings, the length of stay has increased since Q2 2004 when 43% of all hotel bookings on ZUJI sites were for one night stays (now only 29%).
“Shopping for accommodation online is big business in Australia. We have some excellent hotel relationships that are of paramount importance to us. Having just added 12,000 new hotels to our portfolio of properties, ZUJI now offers customers a choice of over 72,000 hotels worldwide at fantastic rates. Whether the traveller is looking to make a booking a year in advance or a same day, last minute check-in, ZUJI can accommodate. We also offer our customers access to consumer reviews, maps, photos and plenty of information about the property’s amenities and surrounding attractions. These added extras have proved to be very important to Australian consumers when it comes to the crunch of making a decision to book a hotel.” – Peter Smith, General Manager ZUJI Australia
Lastminute.com.au – Keeping brands a secret assures lowest rate
Within only five months since its soft launch, the popularity of Secret Hotels has grown exponentially with over 25,000 room nights booked into Secret Hotels!
Web savvy hotels nationwide have integrated lastminute.com’s Secret Hotels as an extension of their online distribution network. “Secret Hotels is the proactive way for hotels to successfully move inventory without the fear of brand erosion due to the lack of rate parity. This is possible as the hotel name is not advertised to the general public. The results have been incredible; with some hotels selling in excess of 1,000 room nights in a single month, which would otherwise have become wasted inventory,” says Brad Gurrie, General Manager Hotels at lastminute.com.au.
Aside from providing numerous benefits to hoteliers, Secret Hotels is also proving to actively stimulate new demand within the FIT leisure travel market, with close to 80% of customers booking into a Secret Hotel for various leisure purposes such as romantic getaways. “Secret Hotels foster opportunistic purchases where customers are booking rooms on the spur of the moment to take advantage of the low rates. Instead of catching a taxi home, they’re often paying the same price to check into one of the mystery rooms that start a $79 per night for a 3.5 star hotel,” says Brad Gurrie.
Accor – Going multi-lingual to gather Asian bounty
Accor’s new web site offers booking options in seven Asian languages as well as English.
The launch of Accor’s accorhotels web sites follows a significant increase of 40% in on-line booking in 2006 (year to date) compared to the same period in 2005.
Accor’s Australian website (www.accorhotels.com.au) has seen record growth in 2006 and the new look website, launched in early September 2006, aims to provide Accor guests with increased flexibility to book a selection of room styles, rates and ‘added extra’ options such as breakfast, massages and late check-out.
Visitors to the website will be greeted with a new search function amalgamating the Asian hotel website with the Australia, New Zealand and Pacific websites, enabling them to book an Accor hotel in any of 16 countries across the Asia Pacific region.
The website is available in seven local languages: simplified Chinese, traditional Chinese, Vietnamese, Thai, Indonesian, Korean and Japanese.
about Hotel and Accommodation Management
HM, now in its 10th year, is the leading accommodation trade magazine in the region and is distributed to most accommodation properties in Australia, Fiji, New Zealand, Noumea, Vanuatu and Tahiti. The magazine has a circulation of over 6000 and is received by all tiers of hotel management (from front office staff to general managers, regional directors and CEOs) throughout the three countries. HM also has alliances with the HMAA (Hotel Motel Accommodation Association) in Australia, the New Zealand Hotel Council (NZHC) and the FHA (Fiji Hotels Association).