‘Digital window’ closing fast for hotels: FastBooking chief
By Benjamin Cher November 17, 2015
- Hotels need more than just a website to attract today’s guests
- The need to be more digital-friendly extends to guest services
GOING on a holiday is now a smoother process, with consumers able to explore and book travel and accommodations without having to go through middle-men.
The online market for travel is huge. According to Statistics Brain, 148.3 million online travel bookings are made each year, and they comprise 57% of all travel reservations.
This is an issue for hoteliers, according to FastBooking co-chief executive officer Jean-Luc Chrétien.
“The hotel industry is a service business and not a technology business,” he told Digital News Asia (DNA) in Singapore.
“Hotel companies invested little into systems, with many still using legacy systems based on airline booking systems,” he added.
Paris-based FastBooking, founded in 2000, provides e-commerce solutions to the hospitality industry. Earlier this year, it was acquired by French giant the AccorHotels group.
The rapid growth of travellers looking online for accommodations took many hoteliers by surprise, according to Chrétien.
“Hotels, like everyone else, built websites, but no one anticipated that booking hotels would go online so fast,” he said.
“It took less than 10 years for people with desktops, and it took less than five years for people to start booking with their smartphones,” he added.
This spawned the online travel agency (OTA), a new “species” within the travel industry that had never been seen before, Chrétien said.
“These companies were born online and started to organise themselves to allow consumers to access travel and hospitality options online,” he said.
Having guests book via an online travel agent was accepted by hoteliers, until this started eating into their profit margins.
“Hoteliers were okay with this arrangement when OTAs brought in 10% of online business, but when it became 50% of online business, it became more of a problem,” Chrétien said.
“That’s when they realised they needed a tool to access technology and help with their web marketing,” he added.
The great leveller
While the Internet has often been touted as a great leveller, allowing anyone with access to go up against the goliaths, this opportunity is closing for hoteliers, Chrétien (pic above) argued.
“When the Internet arrived, everyone saw the opportunity for small hotels and chains and it was true because it opened access to the consumer,” he said.
When consumers search online for accommodations from halfway round the world, search engines show results other than the huge hotel chains and groups. “Consumers can now access small boutique hotels, and bed-and-breakfasts,” he added.
But this space is closing up, and even the smaller hotels are finding it hard. Now, merely having a website is not enough to attract consumers to stay, with OTAs dominating the search results, Chrétien argued.
“The opportunity is closing and becoming more difficult for these smaller players, as even the big hotel groups are entering the space,” he said.
Hoteliers face three main challenges in adapting to and attracting the digital traveller, according to Chrétien.
The first is distribution, or “how do I get traffic and customers to my website?
“Most hoteliers did a little advertising, but now they need to focus on all of the steps of a customer’s journey,” he said.
From before they arrive, to after they leave, hoteliers need to provide the right experience with the right tools.
The second challenge is making their hotel ‘digitally-friendly’ enough for today’s breed of consumer.
Citing an example when he was traveling in Italy, Chrétien bemoaned how hard it was to use the hotel WiFi.
“Using the Web and connecting to the WiFi was a nightmare – it was slow and complex, and pictures took five minutes to download.
“It is not just about accessing the hotel’s services – if the WiFi doesn’t work very well, customers cannot access other essential services like Uber, online check-ins for trains or flights, etc.,” he said.
Basic WiFi access needs to be more seamless and simple before hoteliers can even think about pushing their other services via digital channels, he stressed.
The third challenge revolves around the hotels themselves, and their employers, making use of digital technologies.
“The beauty of digital and analytics is that hoteliers can collect information from their website and mobile app, making them much more efficient at marketing and understanding the customer,” Chrétien said.
There is still the need to make this information easy and accessible for employees to understand –information must be able to be transferred from the digital realm to the front-desk and other hotel services, he added.
Chrétien pointed out that even the giants have trouble with this, citing an example of a FastBooking partner who stayed at a hotel owned by parent company Accor.
“He said that it was a very nice and comfortable hotel, and he had a good stay – except that he had booked online and the front-desk asked for his name, which is normal, but had also asked for all his details, including his credit card number, that had already been given in the online booking.
“Why was this information not available to the front-desk? Or even at the fitness centre, which asked him for his name and room number? If they have his name, they should have his room number as well,” he said.
This continued even at checkout, where the partner had to give his name, room number, and credit card details all over again, according to Chrétien.
“While hotels might say that the system cannot do it, as a customer, that’s not my problem. You need to find ways to make the process seamless within the hotel,” he said.
The digital future
Still, Chrétien believes that there will be fewer OTAs around in the future.
“I think we will see more consolidation on the side of the OTAs, and fewer players than right now,” he said.
“Hoteliers will become stronger in that field [online booking], and we will see a balance because they can’t do direct business all the time – there will be a need for distribution,” he added.
Chrétien believes the main area of interest would be what role non-travel players like Facebook and Google will play.
“Google is set to be a big player, and might become the referee of this space,” he said.
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