More than just your average
turn-key website
Overview of Online Hotel Booking Process:
Most hotels
that offer online bookings are affiliates of multiple technology
companies, commonly referred to as distribution channels (DC), that
run proprietary e-commerce software to handle these transactions.
There are two major types of DC’s; third-party merchant models and
commission based models. We have left a simple explanation of these
two models below.
Third-party
merchant models:
The two largest DC’s in terms of
rooms consumed are Expedia.com and Hotels.com, who both primarily
operate on the merchant model. What they do is buy blocks of rooms
from you at a discounted rate, typically 70%, and then sell the rooms
at 95% of the list price. They sell about ½ of their rooms through
their own marketing efforts, and they sell the other ½ through
affiliate sites like ours: DiscountHotelUSA.com. How this part of the
affiliate program works is, Hotels.com gives us access to their
database and every time someone books a room on DiscountHotelusa.com
we get 5% of the total room booking.
The three major advantages of this
type of system:
- Economy of scale
in advertising
- Automated Real
Time Booking
- No need to manage
rates, once block is sold.
The major disadvantages are:
- They take 30% of
your profits.
- They train
users to use their system to book rooms, not yours
Commission
based models:
The commission based model is very
simple and works as follows. Your property signs up for their program
and you are given a login and password to the back-end of their
system. Once in their back-end you are allowed to manage your
inventory and supply via a web interface. Once a room is consumed you
must pay your provider around 10% of the total you received for the
room. Another nice thing about this model is that once you are signed
up you can place a private labeled booking engine on your hotel’s
web site that lets consumers book directly from there, and the private
label keeps the look and feel of your web-site during the booking
process. The commission model players such as, Travelnow.com (owned by
Hotels.com) and WorldRes.com don’t book as many rooms, and don’t
have quite the affiliate network of the bigger merchant ones, but are
better suited to smaller properties.
The three major advantages of this type of system:
- Can control rates
and inventory in real time
- Typically you get
to keep more of the revenue generated from selling rooms
- Private label
booking engine can increase your brand equity
The major disadvantages are:
- Man hours needed
to control rates and availability
- Smaller
distribution network to sell rooms through
Cost and the Development Process:
There are so
many answers to the question "How much will this cost and how
long will it take?" Most of the factors will depend on the
quality of your existing marketing material, the resources of your
organization, and exactly what you want. In the initial stages of
providing our clients a concrete answer to these question we will
explain the process, what you can do to lower the costs, and the steps
necessary to make the project a success. If you would like us to
control almost all aspects of the design process we can do that too.
If you would like
more information about our company
please visit:
www.NolaWebmasters.com
or call
(504) 899-1987
