Report: E-Commerce Could Offer More Hospitality

Hotels and other businesses in the hospitality industry can make better use of the Internet to market and manage their businesses, according to a report released Monday by professional services firm Andersen.

While the industry has been a "comparatively slow adopter" of new technologies, the report found that executives do expect over the next few years to increase their use of the Web for sales and marketing programs like virtual property tours, as well as for loyalty programs and guest-history management.

The hospitality industry also plans to "aggressively" adopt online programs for reservations, data management and other functions, said the report. A survey of hospitality executives around the world found that most expect to take 15.4 percent of their reservations over the Internet in three years, up from 4.9 percent currently.

Sales, Marketing First

Sales and marketing are the first to be integrated into a hospitality company's Internet operations, the report said, followed by distribution, recruitment and procurement.

One-third of those surveyed said they had current or planned distribution relationships with portals like AOL, Yahoo! or Amazon. Those with arrangements in place said they had a "slightly higher than average effectiveness ratio."

Said Andersen partner Roger Cline, a co-author of the study: "One of the main attractions of online distribution for hospitality companies is the opportunity to reduce the high costs of distribution they have historically faced."

Travel agency commissions and other fees could be cut by up to 10 percent as businesses put their distribution systems online, the study found.

Plans in Place

Large organizations are more likely to use an extranet to connect with other businesses, like suppliers or customers, Andersen said. Overall, one-third of the hotels surveyed said they connected with other businesses over the Web, with 42 percent of large chains and 26 percent of smaller businesses saying they did so.

Fifty-eight percent of the hotels surveyed have a "formal e-business strategy" in place, the report found. Larger chains are more likely to have an e-business plan, with those in the Asia-Pacific region "more proactively planning" for the future.

More than 70 percent of the hotels in that region said they had a strategy in place, followed by 66 percent in Europe, the Mideast, India and Africa, and 55 percent in the Americas.

Tsk Tisch

The report was compiled in conjunction with New York University's Preston Robert Tisch Center for Hospitality, Tourism and Travel Administration, and trade association Hospitality Financial and Technology Professionals.

The Tisch Center, part of NYU's School of Continuing and Professional Studies, said the Internet is such a vital tool for the industry that it will offer graduate students a four-course concentration in hospitality e-commerce beginning in the fall.