Notes on Online – Direct Segment in Resort Hotel Management

In a destination like Antalya where Tour Operator sales are dominant, if I say "I tried" for a long time -about 13 years- for online or, more comprehensively, "direct segment", I guess you would guess that the past years have been exhausting.

I do not find statements such as -I have done it, -It has existed with me-. After all, nothing started with a person, so I think that nothing ends with a person. Taking it from 1 and bringing it to 2 is the most enjoyable part of the job for me. What do I mean? -You may have the latest model car, but if it doesn't help you go farther from where you are, what do we understand from this? Luckily there is someone else who agrees with me!

"If I can see further, it's because I stand on the shoulders of giants before me." #Isaac Newton

How did this segment, which we call online, disturb the dominance of Tour Operators?

In this article, I share my own observations on the "direct segment", that's all! No more, no less...

Why has “B2C” become so popular when we have giant tourism stakeholders that we call travel agencies or Tour Operators?

In fact, like many things in life, there is not only one reason for this, but more than one;

1-Changing consumer habits (I make a reservation using my credit card from where I live, what is the need for those who say to go to the agency)

2-Analysis capability brought by the internet (I read comment portals, compare prices, those who say I can book whenever I want and cancel whenever I want)

3- Decrease in the demand and confidence in manpower (Those who say they don't need anyone's advice or help; I can do my own thing)

4-The need to eliminate intermediaries (Those who say they don't want to pay additional money to intermediaries, I don't want to pay anyone up front, I don't want to make surprise payments, I don't need anyone between me and the hotel for my own reservation)

5- Distrust caused by fraud (There are people who have lost their money, defrauded, regardless of agency or operator, so those who say they do not want to have similar problems)

6-Price sensitivities in the consumers due to the price pollution caused by hotels due to ignorance, insatiability and ignorance of mathematics, and accordingly, the constant search for cheap prices.

In fact, there may be those who have forgotten that, or say that he is rocking well from his seat. My answer: be patient! more below...

In fact, "the need to voice a general misconception" is one of the driving forces that led me to write this article.?

It is possible to come across up to 15 different market / price types in a classic resort hotel in the Mediterranean basin - depending on the hotel and region. Domestic market, middle east, Iran, western Europe, eastern Europe, America, India, Balkan, Baltic, Russian-speaking countries, England, Scandinavia... think about the excel tables prepared for these regions with different prices; I'm tired even typing.

Basically, the guest coming to the hotel; It receives the same service regardless of price, segment, agency, operator. In other words, no glaze soda is served because it comes from Russia, and no one is offered Beypazar? soda because it comes from America. (In the past, there were outdated businesses that offered service differences by giving rainbow-colored armbands, but I want to believe they are outdated!) But when it comes to price, forty somersaults are made. Unpredictable parameters, especially when constructing demand, cause various inconsistencies in the supply phase.

The following examples are listed for those who have the patience to read;

1-Forecast, that is, if the estimation is not done correctly, there may be hotels that have to sell the room, which was sold for 100 € in February with the early booking discount, for 90 € in September!?

2-For example; There are those who pay 90 € for being English, $120 for being Russian, and 1.800 ? for being Turkish. The hotel is the same room, the service is the same but there are price differences according to nationality!

3- It is 100 € in the agency, but when the discount is added on the online portals, the prices can go down to 90 €!

4-There are those who get a smile when they buy from an agency and get advantages such as discounts at the spa and free late check-out when they buy from the online portal!?

5-In the hotel where the agency says there is no room, you can find a room through the call center by calling the hotel directly!

Of course, as a result of all these inconsistencies, the "intelligent end consumer" can make optimal reservations at the end of an online discovery process.

In summary;?

In resort hotel management, the online-direct segment is not the dominant segment of the budget, but it is a candidate to be the segment with the highest ADR thanks to its dynamic pricing power!

(It's good to open a big parenthesis here; there is an ignorant mass of executives who see online reservations as "goose to pluck"! Don't do it! The online consumer is basically the one who prefers to use their credit card in their pocket instead of going to the agency.)

Some ignorance regarding online pricing;

1- They fill the hotel for 50 $ on average, but they try to sell the remaining 1 room for 250 $. 250 $ does not cover the loss of 50 $ sold, they do not know!

2-They give a price offer to the mice group. They double the prices online. So that the group does not come from online. What if 8 billion people outside the group wanted to come? Let them not come!

3-They look at the commissioned portals as a bogeyman. Receiving without giving belongs to Allah, but they do not know!

4-It is difficult to copy and paste catalogs to agencies, but it is easy to update content in many online portals, they think!

5-They close online to for 2 partners which are VIP and their website is closed, but there are hotels that are open to sale except online, do not be surprised!

Years ago, there were those who said "tour operators are over, agencies are over". There is still. To be logical, it would not be utopian that tour packages that include "cheap plane seat + cheap hotel room + cheap insurance + cheap transfer" services will retain their advantage for many years to come.

The essence of the matter is that it is useful to keep the price gap between B2B and B2C as close to the margin as possible, instead of childish wars for that segment. The segment that generates the most revenue with the highest ADR is king.

I wish you a healthy and enjoyable 2023 / 09 January 2023

Yakup Demir