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Booking Engine for National Tourism Organizations?

As many national tourism organizations all over the world hurry to provide hotel, air, car, and package reservation capabilities on their websites, either by building their own booking engine or by partnering by one of the major OTAs (Online Travel Agencies), it poses the question of the role of National Tourism Organizations (NTOs) or even state, provincial, regional, and teritorial Destination Marketing Organizations (DMOs). By talking to different NTOs and DMOs over the past year, I learned the following: It really depends on the mandate and structure of the organization, as well as the situation of the destination itself. For some NTOs and DMOs it may make sense in going with a booking engine, but certainly not always. Not to go into too much detail, the NTO or DMO should ask itself the key questions: Do we create value to the travel industry we are serving as well as the consumer by becoming another intermediary? Can we operate a booking engine in different languages, as well as providing adequate customer service? Will we be more effective in this very competitive global environment, and can these revenue streams be leveraged to execute better marketing programs and drive traffic to the websites? Are we alianating our partners (hotels, airlines, tour operators, etc.) by potentially competing with them, or are we actually facilitating a better online service by providing booking capabilities directly on the destination’s website? Are there other ways to create a better online experience for consumers and make it easy to connect potential travelers to the right tourism supplier?

I found the EnglandNet (powered by TravelFusion on VisitBritain) debate in the UK interesting however. Even though, the Travelmole article is from July 2006, it touches this issue directly. Especially have a look at some of the User Comments below…

STATE AID COMPLAINT UPDATED AGAINST ENGLANDNET
(Travelmole.com…19 July, 2006)

Almost 50 UK domestic organisations have made an updated complaint to the European Commission over VisitBritain’s EnglandNet online project.

It follows a state aid compliant by a group of 37 independent holiday cottage booking agencies including Hoseasons submitted to Brussels in 2004 relating to EnglandNet.

Devon-based independent holiday home company Helpful Holidays has submitted the updated complaint.

The firm says it objects to the use of public money to create websites which provide booking services that it claims compete directly with private sector firms already operating in the market.

The new complaint is supported by 49 agencies, trade associations, online marketing companies and the Forum of Private Business.

Helpful Holidays general manager Moray Bowater said: “We find it bizarre that despite our efforts to reach agreement with VisitBritain in 2004 they have pursued their commercial ambitions in respect of this project.

“The domestic holiday market is enormously competitive. Consumers have a wide choice of commercial organisations which will help them with their holiday choices and make bookings.

“The interference of the public sector into this already crowded market is unwelcome, unnecessary and will compete directly with private firms which already successfully offer consumers this service.”

VisitBritain said that should the Commission pursue the original complaint it will be for the UK government to respond.

“As such it would not be appropriate for VisitBritain to comment on the substance of the complaint at this stage.”

The spokesman added: “EnglandNet is a national online distribution system for marketing England’s tourism products that works behind our existing websites enjoyengland.com and visitbritain.com. It makes it far easier for consumers to find and book Britain’s rich variety of tourism products.

“The VisitBritain and EnjoyEngland websites will give national and international access to a potential 17 million website visits in the UK and worldwide, set to rise to over 25 million in the next three years.”

As part of the VisitBritain response, Hoseasons chief executive Richard Carrick was quoted as saying: “Hoseasons Holidays are keen to find a way of working with VisitBritain and EnglandNet and after recent discussions are close to this.

“Whilst we are confident that VisitBritain will not go down the road of establishing a commission earning agency which would effectively act in competition to existing booking agencies, there are already other precedents within the UK that give us cause for concern.”

VisitBritain chief executive Tom Wright said: “The opportunities provided by EnglandNet will be of tremendous importance to this country’s tourism industry and VisitBritain wants englandNet to be supported by all sectors. To that end VisitBritain will maintain a continuing dialogue with all interested parties.”


USER COMMENTS

Nigel Embry, 20 July 2006, 09:45:45
Head in the sand attitudes
Little wonder our balance of trade deficit for tourism continues to grow when so many in the trade persist in such ‘head in the sand’ attitudes.

EnglandNet offers everyone an opportunity to sell online without the need to persist in the outdated use of expensive middlemen. This is particularly significant in the case of small, individual operators whose margins are small and to whom the adtional cost of heavy commissions etc are a burden too far.

Rather than seeking to protect the out of date lifestyles of costly

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agencies let’s start to consider helping the individual, front line operator. This will encourage more business by reducing overheads and, hence, helping to make the industry more cost competitive with overseas rivals.

Iain Butterworth, 19 July 2006, 10:38:44
Very Foolish VisitBritain ?
Instead of VisitBritain spending vast amounts of “Public Money” on a scheme which is in direct competition to the agencies who currently attract thousands of visitors to our shores every year, why not invest these funds in additional marketing of Britain at home and abroad to further help visitor numbers?
There isn’t a problem with visitors using the internet to book holidays in Britain, agencies all over the country continue to invest in improving their own IT, let’s work together not in competition.
VisitBritain may firstly want to look at the mess their administrators are making of the current inspection system and invest some money to improve what is the cornerstone of our holiday business, QUALITY !!

Mark Chambers, 19 July 2006, 07:42:45
Campaign to reclaim VisitScotland web site launched
The complaint to the EU now includes the relationship between Visitscotland and the private company which operates its website (visitscotland.com).
The Scottish situation has been cited by the complainants as an example of what might happen in England.
A campaign has been launched by a group of accommodation providers in SW Scotland to reclaim the website into public ownership.
See
www.reclaimvs.com for further information.

Ashley De Safrin, 19 July 2006, 06:31:34
Tour Operators should think “bigger”
How many visitors from overseas will take the time to search out a UK tour operator’s website when they can find everything they want on one website?
Is it not much better to add your products onto a website which can bring you business you would not otherwise have got rather than squeal at “unfair play” when all VisitBritain is trying to do is to make it easier for the consumer to go to a one stop shop.
We really should be more mature about these issues and try to work together for the common good.

Stillers The Stickler, 19 July 2006, 09:23:23
Come on, EnglandNet!
Unless, of course, they can somehow negotiate to squeeze all their own inventory on the portal alongside EnglandNet’s, which is probably what this is all about.
Helpful Holidays general manager Moray Bowater said: “We find it bizarre that despite our efforts to reach agreement with VisitBritain in 2004 they have pursued their commercial ambitions in respect of this project.
“The domestic holiday market is enormously competitive…
Well, no, Moray. Not enormously competitive at all – perhaps only reasonably competitive, especially in the holiday cottage sector. There are too many overnight places in the market and too few self-catering places. And everything is horrendously overpriced.
It is noticeable that despite an increase over the last 20 years in the number of holiday cottage agencies in this country and in the size of their inventories, the margins which holiday cottage agencies enjoy have not substantially changed at all (even after Foot & Mouth). Some margins, indeed, are extraordinarily high for what the agency actually provides. Consumer demand continues to outstrip inventory supply and the profits accruing to agencies remain not just healthy but handsome.
Moray also says: “Consumers have a wide choice of commercial organisations which will help them with their holiday choices and make bookings…”
A disingenuous statement because it conveniently omits to mention the other party in the ménage à trois. Consumers may indeed have a wide choice, but holiday cottage owners DO NOT. Holiday cottage owners who wish to remain independent of agencies may promote their product on a few comparatively small-scale commercial non-agency websites which take bookings and via local Tourist Information Centres which take bookings on a commission basis.
However, until EnglandNet, there has been no state web outlet in England which both takes bookings on a national scale, with a size of inventory that merits national distribution and with a reach that national marketing spend can provide.
Independent holiday cottage owners have therefore suffered unnecessarily. They have suffered directly at the hands of the commercial agency sector which can and does provide strong national coverage. They have also suffered indirectly from the lack of state provision for marketing their properties with similar coverage via the web on a strict payment-by-results-only basis (ie., commission), rather than the traditional advertising fee-based model (which is both speculative and unaccountable).
Then there’s more…”The interference of the public sector into this already crowded market is unwelcome, unnecessary and will compete directly with private firms which already successfully offer consumers this service.”
I say that state competition is great competition. Thank God for the BBC in the competitive arena of a myriad of channels, for instance.
And, no, the market is not so crowded as to satisfy demand – summer inventory in particular is invariably sold out, meaning that demand in this is much higher than supply.
The state’s objective is to get more people on holiday in this country. And rightly so. It follows that much more self-catering inventory is required, especially at peak. It costs owners too much at the moment. A swift way of achieving success, though, is to offer a much reduced rental commission, so that more owners release more product onto the market independently of agencies. That is the threat (unremarked by Moray because it is undeniable) that EnglandNet poses to the holiday cottage agencies and a welcome one it is, too.
More power to the owners, please.

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