Today I would like to discuss the significant role and influence of the e-marketing, online reservation channels, and social travel networks on the hospitality industry. If someone needed to travel 20 years ago how he or she could choose and book a hotel? In the best scenario he or she could find it in some travel magazine with limited information and pictures and make a reservation by phone. In the worst case he or she could just find it in the phonebook and make a reservation by phone without any information about the hotel except the short talk with the reservation or travel agent. However, the booking process changed with the creation of the Internet, so most hotels now build colorful web-sites with plenty information about the hotel and ability to make a reservation online. It was a dramatic change in the way of doing business for the hotels. But still this was not the most efficient and most popular way of making reservations. Thus only small percent of total reservations were submitted online and hotel web sites were very simple, not dynamic and mostly played an information role—offering “brochure-ware.” The ”revolution” happened in the e-marketing, online reservation channels, and social travel networks with invention of Web 2.0, which not only had changed the previous ”old-fashioned” use of the Internet, but also opened the door of opportunities for the future applications. It basically helped to connect customers with hotels online and added new players in the hospitality industry, like online retailers, intermediaries, and content providers. Social networks also sprang up like TripAdvisor which enabled hotel guests to comment on their stay for others looking to book at trip.

E-marketing and online reservations are significant part of total hotel reservations today and increasing rapidly. Max Starkov, Chief eBusiness Strategist at Hospitality eBusiness Strategies, in the Hotel Internet Marketing Best Practices and 2009 Action Plan argues that “by 2010 the Internet will contribute over 45% of all hotel bookings in North America.” I agree with Mr. Starkov’s opinion that the role and importance of e-marketing and online reservation channels are continuously driving sales in the hospitality industry. Travelers are becoming more knowledgeable and demanding because trusted sources of information are widely available today through the Internet. Online reservation channels force hotels to drop prices and provide customers with plenty of hotel choices. Customers and online reservation channels have much stronger bargaining power today than hotels. Competition is becoming more aggressive. Thus hotels are on the lookout for new and more efficient ways to catch the customer and win his loyalty. The knowledge and use of e-marketing and online reservation channels are a competitive advantage for hotel managers today. It is crucial--especially in today’s economic downturn--to use it as the revenue enhancement tool to increase and maintain company profitability. “In difficult economic times like this, Internet marketing can help smart hoteliers generate incremental revenues, improve ROIs, attract more affluent travelers, and out-smart the competition,”- said Mr. Starkov in 2009 benchmark survey on e-business strategies. Furthermore, the e-marketing and abundance of online reservation channels today are changing the global structure of the hospitality business. For example, in Europe, Middle East, and Mediterranean regions Tour Operators historically were the major players on the hospitality business arena. They were the intermediary between the travelers and hotels. Therefore they had tremendous bargaining power over the hotels, airlines, and customers because they were buying inventory (rooms and seats in the airplanes), bundling the ‘deals’, and selling them to the customers. But today they are losing their market share dramatically because customers can get information and make online reservations themselves without Tour Operator assistance. I think that in the next decade online reservations either through online reservation channels or hotel web sites will totally supplant the traditional reservations by phone and through travel agents, because they are much faster, convenient (24/7), and do not cost anything for customer. Also online reservation channels and hotel web-sites started to use ‘virtual tours’, ‘match the room with your personality type’, and personalized newsletters to provide customers with the maximum information about the hotel, room, amenities, prices, and special offers and help them to make a choice.

Furthermore, I think it is important to understand the continuously increasing role of social travel networks like TripAdvisor in influencing and shaping customer travel choices. If yesterday’s travelers received mostly positive facts about the desired hotel from travel magazines, TV, or the hotel web site, today they have access to more realistic and reliable information, submitted by the other travelers on travel social networks like TripAdvisor.com. Moreover they can share their own experiences with other users. TripAdvisor.com is becoming a powerful tool not only in influencing and shaping customers preferences but also in forcing hotels to improve the quality of service. Hotel managers cannot ignore their influence anymore. Good hotel managers usually check the content postings about their hotel on a daily basis and react immediately to any complaints about the hotel. For example, in the Taj Hotel Group every hotel manager must submit a report about the time of response and recovery actions for every customer complaint on TripAdvisor.com. It can cost him his job if he does not react in-time. Therefore TripAdvisor.com is a not only a great source of reliable information for travelers, but also it is their protection from the possibility of poor service. The number of visitors to TripAdvisor.com had been growing dramatically since it was created. Thus according to TripAdvisor.com Press Release today TripAdvisor, LLC attracts nearly 32 million monthly visitors across 12 popular travel brands. TripAdvisor-branded sites make up the largest travel community in the world, with 24 million monthly visitors, six million registered members and 15 million reviews and opinions. Featuring real advice from real travelers, TripAdvisor-branded sites cover 300,000+ hotels and attractions and operate in the U.S.” I think in the future the number and importance of travel social networks will grow and they will play not only the role of content-provider, but also could add some other activities: for example ‘Trip planner’-helping travelers plan the ‘perfect’ vacation based on their preferences, ‘Life Interviews with Travelers’, sharing of travel experiences with photos on Flickr or videos on YouTube. I also see Facebook, Twitter and MySpace exposing groups in a social network to relevant travel booking opportunities based on their giving permission to group members’ travel itineraries.