Pricing is becoming key factor -Travel BargainOnline travel shoppers are not very loyal on where they shop 65 percent of o...
Pricing is becoming key factor
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Pricing is becoming key factor

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Published on: Mar 4, 2016

Transcripts - Pricing is becoming key factor

  • 1. Pricing is becoming key factor -Travel BargainOnline travel shoppers are not very loyal on where they shop 65 percent of online travelers do not viewthemselves as brand loyal. As much as they love to shop online and spend their time researching whatsuits their needs, they are not loyal to the companies from which they buy.The above scenario indicated that the travel suppliers have no choice but to participate in this onlinedistribution channel. The suppliers are realizing that the traditional channels like GDS Global DistributionSystem travel agent and call center reservation office is somewhat inefficient and expensive, especiallywhen the economy is weak. Ignoring online distribution channel and concentrating only on traditionaldistribution channels will result in lower occupancy, and higher distribution and operational costs fortravel suppliers. As online channels become more popular among suppliers their participation isincreasing.How Pricing and Distribution Become Key:9 11 caused a dramatic shift in how consumers booked their travel. The instability caused a large drop indemand for airlines, hotels and car rentals leading to ever lower prices. This low demand factor forcedtravel suppliers to introduce unprecedented discounts. Travel suppliers struggled to sell seats, rooms,car rentals to a significantly shrunk leisure and business travel market. Every air seat, room and auto notbooked cost their companies money. Better to sell dirt cheap than not to sell at all. But how to get theword outThe Internet allowed them to reach consumers, sell inventory outstrips their less progressivecompetition. Those suppliers who had no clear Internet strategy or understanding of how the Web andonline distribution works suffered.Discount hotel sites attract millions of buyers with their special rates leading to stratospheric salesthrough these channels. They thrive on hoteliers selling their distressed inventory at a fraction of theirnormal rates. Occupancy is the lowest it s been in years, hoteliers continue to work with leading onlineretailers to move inventory at lower price.The 6.3 billion in online hotel sales 2002 with are split roughly evenly between discount agency sites andhotel Web sites. PhoCusWright projects that around 75 of discount agency hotel site sales are via themerchant model, where the agency typically takes a 20 30 margin on the hotel net rate instead of theusual 10 commission. This approach has helped profits at Expedia and, who have roughly 60of online discount agency hotel sales.To Get More Information: expedia voucher , expidia hotels , expedia voucher code

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