The rapid growth oftourism industry is promoted by the availability of information andtechnological advancements with the help of the internet (Buhalis, 2004).Guests tend to have their own reasons when booking through a distributionchannel. The facilities provided, price, room availability, and informationcontributing to their decision are crucial considerations in choosing a bookingchannel. In order to increase the efficiency of products and services sales,hotel has adopted multi-channel distribution.
Having a huge variety and rangeof options for the customer will make the hotel more accessible and convenient.Customers’ perceivedvalue and risks affects their decision making process as they will comparetheir expectation to the possible product that they will receive. Beforedeciding on the distribution channel in which guests will book their rooms,first they must obtain some information about the hotel and the channels. Thelack of sufficient knowledge about the important particulars may raise doubtand uncertainty in guests’ mind. This might lead to guests not making adecision that suit them price-wise and time-wise as they are not aswell-informed as they could.
There are two types of research that the clientcan go through to avoid this situation. They are internal information searchand external information search.The source ofinformation may come from the guests’ personal past experience; this is also calledan internal search (Money & Crotts, 2003). On the other hand, externalsearch requires the guests to acquire information from sources other than theirown memory (Lee & Lee, 2005). This method is done when the informationobtained from the internal information research is not enough/ the guest is notsatisfies with Hotel websites, travelagencies, and online booking sites can provide some closure about the hotel.According to Roberts and Mason (2004), there will always be doubt anduncertainty in guests’ mind during the booking process. The main aim ofconsulting with a distribution channel is to increase the clients’understanding about the booking process and the organization itself.
Different types oftourists may differ in their perception towards the accessibility and ease ofbooking through the different distribution channels. Travelers of differentbackgrounds may also affect their decisions. Some people prefer the traditionalmethods of booking rooms in hotels and some people react to the influence ofinternet and take advantage of the new facilities offered.Hotel-owned Websites/DirectBookingMore hotels are takingthe opportunity to use their own websites as a booking channel. This willdecrease the expenses towards agency commission (Crnojevac, 2010). Hotels mustnot neglect their own websites and direct online marketing when choosingappropriate booking channels.
As the internet culture keeps on evolving, hotelsmust not be content with their current position. Most of them pick up the trendand introduced their own websites for the sake of retaining and increasingtheir market share.Some people prefer theconvenience of making direct booking with the hotel or even perform walk-in. Insome cases, the hotel website will offer discounts for a specific credit cardpayment or for a certain event. But it is widely known that most people chooseto book their rooms via OTA and travel agents rather than the hotel’s website.More effort to promote the hotel-owned website is needed in order to be able toboost sales and booking from the website. Having a competent and creativemarketing team may help in promoting the hotel’s technological contributions.
Establishing andmanaging a hotel website takes up time and might be pricey. A web designer andmarketing strategist must be employed to achieve the desired website thatembodies the hotel’s value and personality accurately. Guests booking throughthe hotel reservation system will be given a confirmation number and be routedto the individual hotels (Burns, 2016). Some hotel website only featuresinformation about the hotel and others offer the facility of booking a roomreservation.Traditional travelagentsA lot of people stillrely on the counselling services provided by travel agents. High search costcan be avoided when a personnel is helping with the guests’ enquiries (Mayr,2009). They are the entities that traditionally mediate the customers andsuppliers.
But as the OTA is taking over their job function, they will beforced to embrace the technological advancements. This is also called asCybermediaries. Those travel agents that take the risk in order to excel andremain relevant in the current industry will surpass the performance of travelagencies that refuse to change or improve.Nowadays, more and morepeople feel the need to save their time.
By having to visit or make a phonecall to a travel agency they waste their time and energy. Some travel agentsmay even charge the guests with consultation fee or service tax once they bookthrough the agency. Their loyal customers are usually the big spenders. Theywill usually return year after year (Marsh, 1994). Those people who stillchoose to have the assistance of a travel agent usually look for the personalcounselling and face-to-face contact. They try to materialize the intangibleproduct through their marketing communication skill. This is an added valuethat other distribution channels may not provide. Some people may also preferdirect human consultation and interaction as well as the service they offer tohelp.
The convenience of not booking your own room is the purpose and reasonfor a travel agency’s existence. Online Travel Agents(OTA)Thanks to the internet,OTA has provided the industry with a new way of communicating the customers’wants and the hotels’ values. They provide a direct contact with the potentialcustomers and brings down the selling price by decreasing the costs of servicesand time spent (Heung, 2003). Habit is one of the factors that may alter theeffect of trust, attitude, and commitment on the intention of booking hotelonline (Agag, 2016). When an action has become a habit, it will be harder forexternal forces to alter it.
This may work against OTAs as some people havemade traditional booking method a habitual action.Through thisadvancement, the industry is facing some challenges as well as benefits. Theyhave gained importance of the past decade as it opens up new revenue growthopportunities.
As long as there are rooms available in the hotel, customers areable to book the room through OTA. But these third-party websites usually sellthe room at a much lower price or huge amount of discounts. Furthermore, the hotelmust pay commission to the OTA (Line & Runyan, 2012). This may hinder thehotel from selling a large amount of rooms through third-party websites (Morosan & Jeong,2008).There is an increasingnumber of travelers that do their research and bookings through the internetbefore travelling (Kim & Lee, 2004). OTA has a strong advertising power andsometimes even foreshadow traditional travel agencies and hotel-owned websitesdue to their low price and fast services.
Internet has provided accessibilityand flexibility when it comes to planning and obtaining information. It onlytakes you few clicks to know about the hotel and make a booking reservation.They can easily compare the features and price of the room by opening multipletabs.According to aresearch, about 32% of the hotel revenue is generated through online bookingsin 2013. It has become easier for technologically savvy customers to find thebest price available in the market by browsing through the internet. Some pricesensitive customers are hard to please and attract as they have highexpectations for rooms with low prices.
They have developed a deal-seekingbehavior and tend to be pickier. Guests will compare the deal between one siteand another to find the best rate in the market at that particular time ofbooking (Jiang, 2003).