Hotels is gaining control on online booking

In our Lecture 6, we discussed the type of travel and tourism services website such as Expedia.com, Travelocity.com, Priceline.com and others. Indeed, the extablishment of such new intermediaries has benefited a lot of consumers. However, it did had some impacts on the hotel operators.

This article is on how the hotel operators gaining the control of the online sales from the independent website like expedia.com and priceline.com.

Hotels corner market on online bookings (Source: Yahoo! News)
By Kyle Peterson Wed Feb 15

LOS ANGELES (Reuters) -

Hotel companies have gained control of online sales despite fears years ago that independent Web sites would take the majority of business.

Hilton Hotels and Marriott International executives, speaking this week at the Reuters Hotels and Casinos Summit held in Los Angeles, said they are not dependent on travel agencies for sales but find such outlets helpful to unload last-minute bookings that otherwise would have gone unsold.

Hilton in particular takes pride in its Web site, claiming that 90 percent of its total online sales are made there.

Third-party travel sites led by Expedia Inc's Hotels.com were powerful forces in the travel industry a few years ago as hoteliers in the midst of a downturn struggled to attract guests, and Web sites delivered.

But as the industry's fortunes have improved, hotel companies have wrested back control of inventory and room pricing and focused on building their own Web sites.

Consumer perceptions of supplier direct sites operated by hotels, airlines and car rental companies have improved, especially among customers who prefer to avoid the booking fees charged by third-party travel agencies.

Travel agencies like Priceline.com and Expedia Inc. have become entrenched in the online travel market, but executives at the top hotel chains see them chiefly as a way to move extra rooms, keeping the bulk of their inventory for themselves.

The agencies' strength lies in their ability to provide price comparisons for shoppers and to book package deals that may be cheaper than booking lodging and transportation separately, analysts say.

Some agencies send phone messages on flight status, customer reviews of destinations and similar services to make the booking process easier and more enjoyable.

Priceline Chief Executive Jeffery Boyd, however, told Reuters on Monday that his company will continue to concentrate on providing customers with the lowest fares.

Additionally, Priceline and its rivals are working hard to penetrate European markets where Internet shopping is blossoming.

"We're establishing a very serious business in Europe for Priceline," Boyd said. "If you're looking at purely online reservations, we are now one of the biggest players in Europe."

Priceline reported $165 million of gross bookings for hotels in Europe in the third quarter of 2005, representing about 30 percent of its overall gross bookings.

Questions:

1. What's the impact of E-Commerce on Tourism in Malaysia?
2. How effective is the local web-based tourism services in Malaysia so far?
3. What are the incentives should be given to the local tourism industry, especially in promoting the use of online booking among the hotels and resorts in Malaysia?