UK: more than half of Internet users book travel online

This article deals with the results of a study carried out in the UK which reveals that nowadays less than 7% of the British research and book their holidays on the high street whereas the rest of the lot use at some stage the Internet before going on holidays.

These figures demonstrate the role of the Internet in the UK as far as travelling is concerned. Without going into more detail in terms of numbers, it can easily be understood that this phenomenom touches each and every layer of the population, whether young, middle-aged or elderlies.

However, the role of the high street holiday bureaux are not to be denied. The Internet is mainly used to research holiday but still a significant part still prefers to go to the bureau or make a phone call in order to be insured (and probably reassured) that the booking will properly be taken into account. In other words, it seems that paying online has still not become an habit to all for security reasons.

Also researched in this article, the way people choose the travel websites. Just like for any other product friends'recommendations play a significant role as well as search engines, airline websites, travel agencies'websites and travelling guides'websites. Furthermore, previous consumers comments can be found there, which also influence the potential customer in its buying decision.

Let's now aplly these informations to revenue management. My own point of view is that it is a nigthmare!!!! Internet is great: it is a wonderful tool to get cheap information but the problem is that you get so much and in so many different places that it seems difficult to keep an eye on each and try to control something.

It seems that the only way to grab potential customers'attention is to be in all those places that influence them (ie. be in the travel guides and keep on eye at the most popular web sites while still while trying to stay in the good books of the travel agents). Also one has to be very carefull to offer the right product to all these different channels.

Also, since only 7% of travellers only use travel agents, Wouldn't it be interesting for a company to offer better deals through the latter channel rather than on the Internet, just to make the special deals harder to find and privilege the customers who do encounter them?

Expedias's profit drops as travelers book directly

This article is about the consequences of hotel applying the principles of revenue management to online travels agencies. For instance, here, Expedia has announced a net income loss of more than 60 millions for its third quarter.

The reasons for this loss are as follow

a- There is more and more competition among travel agencies. Therefore, customers have more and more possiblities to choose another agency than Expedia. However, this more of marketing matter for these actors within that market

b- Hotels and airline companies prefer to distribute their inventory themselves as they make more margin out of it. In other words, when there are a lot of bookings made, there is no reason for those firms to go through travel agencies to sell their rooms or airline seats. This also implies that they do not have to decrease the prices in order to attract more customers; hence their prfit margin goes up.

This article demonstrates that buying behaviors have changes but maybe not as much as we mught think. Even though a significant proportion of hotels customers do buy their rooms online through online travel agencies, there is still another significant part that still contacts the hotel directly to book.

This is very important in terms of revenue management. Offer a larger panel of prices will certainly increase hotel's occupancy, but the latter can also be fully booked through the hotel itself. Morality: before offering discounted prices, a hotel should anticipate beforehand as to how many bookings it can get directly.