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UK Looks Online for Hotel Reviews

Nearly half of UK consumers who use the Internet to research travel decide not to book a hotel because of a negative online review, according to American Express' "Hospitality Monitor 2007" report, conducted by Loudhouse Research. The study was conducted in April 2007, and was based on telephone interviews of senior operations staff at hotels and restaurants in Europe.

Over eight in 10 UK consumers researched online before booking a hotel, and 62% did so before booking a restaurant.

Taking the good reviews with the bad, 77% of UK hotels and 80% of restaurants said the growth in consumer-generated content is a business opportunity.

Kathryn Pretzel Shiels of American Express said, "The industry is clearly taking steps to better understand this channel. In fact, 67% of UK hotels and 77% of UK restaurants say they actively monitor content posted on independent review sites."

The study also asked hotel and restaurant operators about their online marketing efforts, and found that 57% of hotels and half of restaurants used affiliate marketing. Over four in 10 hotels and restaurants used search marketing. While seven in 10 hotels used direct e-mail, only 17% of restaurants did.

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Online Travelers Bargain-Hunt on the Web

The Internet as a trip starting point.

Roughly a quarter of US Internet users traveled on a commercial airline or booked a hotel in both 2005 and 2006, according to PhoCusWright's "Consumer Travel Trends Survey Ninth Edition."

Yet the proportion of people doing these things fell by a percentage point between 2005 and 2006. With the number of Internet-using travelers steady, will competition for their attention increase?

For certain travel products, consumers find the Internet ideal for conducting research but not for booking reservations. Burst Media found that a much higher percentage of survey respondents planned to research online and book offline hotel accommodations (50.1%) than airline flights (39.2%) or car rental reservations (12.2%).

Generally speaking, the more complex the travel product, the more likely it will be researched online but booked offline. Travelers who book offline cite help from live customer service agents as a major incentive.

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Internet Marketing and Distribution Trends Impacting the Hospitality Industry from 2007-2010

Background
In the past several years, we have all watched the remarkable growth of the online travel marketplace. With an increasing number of travel consumers doing travel research online (75% of adults in the US - TIA), gaining broadband Internet access at home and becoming more and more accustomed to doing business and transacting on the web, we will continue to see this growth across market segments at an ever increasing rate.

Here is the online travel adoption rate in 2005 and 2008:
                                       2005           2008
North America                 42%             60%
Europe                            15%             41%
APAC                                9%             20%
                                 (PhoCusWright 2007)

Hospitality:  (USA, % of all bookings):

                               2004    2005   2006  2007  2010
U.S. Hospitality:     20%       25%     29%    33%    45%
      (Merrill Lynch, PhoCusWright, HeBS)

This year, 40% of all leisure and 35% of business travel bookings will be done online. By 2010 over 50% of leisure bookings are expected to be online. The percentage of meeting planners researching and booking online is also growing at a rapid pace. An estimated 89% of planners are researching event locations on the web, and by 2008, 41% of all groups and meetings travel revenues will come from the Internet.

Direct vs. Indirect Online Distribution
The direct online channel will continue to be the main focus for hoteliers. The industry as a whole has realized that not only has the Internet become the preferred channel for travel consumers to plan and book lodging, but the direct online channel is the cheapest form of distribution. The shift from indirect to direct online distribution will continue to be a major trend in the next several years:

Overall for the industry (USA): 2003    2005   2007  2008   2010
Hotel Branded Websites:            53%     54%      60%    62%    65%
Intermediary Websites:              47%     46%      40%    38%    35%

In 2006 the major hotel brands enjoyed an above the average direct vs. indirect online ratio of 81.4% vs. 18.6%.

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China and Web 2.0

With the world's second-largest and fastest-growing Internet user population, China has become the next frontier for Web 2.0 activity. In recent months, MySpace, Yahoo! and Google have all made inroads into the Chinese market by either launching local versions of their sites or investing in China-based technology or social networking startups.

Venture capitalists are also heeding the call. Intel Capital, the financial services unit of the US semiconductor giant, invested an undisclosed sum — said to be in the millions of dollars — in fast-rising Chinese social network 51.com. Sequoia Capital, Redpoint Ventures, Highland Capital Partners, General Atlantic and IDG Technology Venture Investment have also staked claims on various Chinese Web 2.0 companies, according to articles in BusinessWeek and The Wall Street Journal.

By 2011, the number of Internet users in China is expected to grow to 246 million, up from 134 million in 2006, according to eMarketer estimates. This represents an average annual growth rate of 13% for the five-year period.

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Brazil Beats a Path Online

After lagging for a number of years, Brazil is finally dancing online. 

Although home connectivity still remains too costly for the majority of Brazilians, the country already leads Latin America in the number of Internet users, ahead of both Argentina and Mexico.

Like most of the world, many Brazilians have become accustomed to going online as part of everyday life, with Internet usage increasing steadily from about 9% of the total population (17.5 million) in 2005 to an expected 22% of population (43.7 million) in 2011.

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Online distribution of hotels ‘could be pushed back a decade’

Converging risk factors in the travel market could push online distribution back 10 years, warns the boss of a leading hotel representation company.

Niels Pedersen, managing director of 1,500-member consortium Supranational Hotels, highlighting six danger signs to which the sector must respond, called for regulation of e-commerce suppliers.

He said: "I foresee a buyers market returning within 12-18 months - partly as the cost of travel rises through fuel charges and environmental taxes, and partly because too many new hotels are being built. 

"Before then, however, today's rip-off market – high prices, low efficiency, widespread guest dissatisfaction – is returning the reputation of online bookings to the pioneering days of the mid-1990s.

"The answer is for e-commerce suppliers to become regulated and then establish agreed and accredited standards for bedroom sourcing, payment protection and problem solving, or alternatively risk losing their market to the safer jurisdiction of travel agents."

Pedersen says the six issues to be tackled are:

·         There is currently a sellers market for hotels in many locations and they are fuller and therefore more choosy as to the electronic middlemen with whom they want to work.  In addition, the major hotel brands are trying to cut out intermediaries in favour of attracting bookings direct.

·         This means that commissions to such dot.com suppliers are being halved from recent levels of 25% or more, and consequently their call centre operations are being reduced in size and efficiency and cannot properly handle any booking problems that arise.

·         Disillusion with unreliable email communication is mounting because an estimated 1 in 6 goes astray – whether inadvertently deleted, or diverted by anti-spam security. More guests are arriving to find no knowledge of their booking, and no room in a full hotel.

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Broadband Spreads Out, Speeds Up

The number of broadband subscribers will reach 567 million worldwide by 2011, up from the current 285 million, according to In-Stat's "Broadband Gets Big: Global Broadband Subs Hit 285 Million" report. New subscribers totaled 65 million in the 12 months prior to May 2007.

DSL and cable modems account for 92% of broadband connections worldwide. The report stated that over half of the world's broadband access will come from DSL connections by 2011.

Mike Paxton of In-Stat attributed the growth to a basic desire for speedier Internet connections.

Mr. Paxton also said, "The emergence of online applications such as viewing video clips or TV programming, downloading music files, and even playing online games, are fueling end-user demand for 'fatter pipes.'"

eMarketer's own projections are based on the Federal Communications Commission's definition of at least 200 kbps in at least one direction. eMarketer also counts broadband households, not individual subscriptions. By this count, the number of broadband-connected households will reach more than 497 million worldwide by 2011, up from 251.2 million in 2006.

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Mobile TV Awareness, Then Adoption

Mobile broadcast TV subscribers will total 155.6 million worldwide by the end of 2012, up from 4.4 million in June 2007, according to Datamonitor's "Opportunities in the Mobile Broadcast TV Market, 2006-2012" report.

Infonetics had estimated previously that paying mobile TV subscribers would total 46 million in 2010. Datamonitor's 2010 estimate is a more aggressive 65.6 million.

eMarketer projects that by 2011 there will be significantly more paying mobile video subscribers than mobile TV subscribers worldwide, largely because of the level of 3G penetration. Specifically, there will be approximately 120 million 3G subscribers who pay a premium on top of their data subscriptions for mobile video clips or streams. There will be nearly 80 million mobile TV subscribers worldwide by 2011.

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The Ups and Downs of European Online Travel

eMarketer estimates that online travel sales in the five major travel markets of Europe — France, Germany, Italy, Spain and the UK — will total nearly $49 billion this year, up 27% over 2006.

That's the good news.

"Over the next four years, as the European online travel market matures, sales growth in the sector will steadily decrease," says Jeffrey Grau, eMarketer Senior Analyst and the author of the new report, European Online Travel. "Conversely, that means competition for online travel dollars is going to increase."

After peaking in 2005, personal travel and tourism spending growth (online and offline) by the 25 European Union member states entered a moderate phase, as evidenced by data published by the World Travel & Tourism Council (WTTC).

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Webwag Widgets Go Mobile

Webwag, a personalized portal similar to iGoogle, Netvibes, Pageflakes and others, has launched a mobile version of their service. Webwag Mobile beta version synchronizes with the Webwag.com start page; for example, the RSS items you read on the mobile version should be marked as read on the desktop version.

We’re a bit skeptical about mobile widgets: how many widgets can you actually place on a small screen of a mobile? And how much sense does it make to have tiny apps in an even tinier form on a tiny device? But, judging from the screenshot Webwag has done quite a good job at smallifying their widgets even further, so it just might work.

Webwag mobile will first be available on Java mobile handsets, and by the end of this month, Webwag will provide developers with an API to build mobile widgets.