The the guests to acquire information from sources

The rapid growth of
tourism industry is promoted by the accessibility of information and
technological advancements with the help of the internet (Buhalis, 2004).
Guests tend to have their own reasons when booking through a distribution
channel. The facilities provided, price, room availability, and information
contributing to their decision are crucial considerations in choosing a booking
channel. In order to increase the efficiency of products and services sales,
hotel has adopted multi-channel distribution. Having a huge variety and range
of options for the customer will make the hotel more accessible and convenient.

Customers’ perceived risks
and value affects their decision making process as they will put their expectation
against the possible product that they will receive. Before deciding on the
distribution channel in which guests will book their rooms, first they must
obtain some information about the hotel and the channels. The lack of
sufficient knowledge about the important particulars may raise uncertainty and
doubt in the mind of guests. This might lead to guests not making a decision
that suit them price-wise and time-wise as they are not as well-informed as they
could. There are two types of research that the client can go through to avoid
this situation. They are internal information search and external information search.

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The source of
information may come from the guests’ personal past experience; this is also called
an internal search (Money & Crotts, 2003). On the other hand, external
search requires the guests to acquire information from sources other than their
own memory (Lee & Lee, 2005). It is practiced when the information obtained
from the internal information research is not enough/ the guest is not
satisfied with Hotel websites, travel agencies, and online booking sites can
provide some closure about the hotel. According to Roberts and Mason (2004),
there will always be doubt and fear in the mind of guests during the booking
processes. The main aim of consulting with a distribution channel is to
increase the clients’ understanding about the booking process and the
organization itself.

Different types of
tourists may differ in their perception towards the accessibility and ease of
booking through the different distribution channels. Travelers of different
backgrounds may also affect their decisions. Some people prefer the traditional
methods of booking rooms in hotels and some people react to the influence of
internet and take advantage of the new facilities offered.

Hotel-owned Websites/Direct
Booking

More hotels are taking
the opportunity to use their own websites as a booking channel. This will
decrease the expenses towards agency commission (Crnojevac, 2010). Hotels must
not neglect their own websites and direct online marketing when choosing
appropriate booking channels. As the internet culture keeps on evolving, hotels
must not be content with their current position. Most of them pick up the trend
and introduced their own websites for the sake of retaining and increasing
their market share.

Some people prefer the
convenience of making direct booking with the hotel or even perform walk-in. In
some cases, the hotel website will offer discounts for a specific credit card
payment or for a certain event. But it is widely known that most people choose
to 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 to
boost sales and booking from the website. Having a competent and creative
marketing team may help in promoting the hotel’s technological contributions.

Establishing and
managing a hotel website takes up time and might be pricey. A web designer and
marketing strategist must be employed to achieve the desired website that
embodies the hotel’s value and personality accurately. Guests booking through
the hotel reservation system will be given a confirmation number and be routed
to the individual hotels (Burns, 2016). Some hotel website only features
information about the hotel and others offer the facility of booking a room
reservation.

Traditional travel
agents

A lot of people still
rely on the counselling services provided by travel agents. High search cost
can be avoided when a personnel is helping with the guests’ enquiries (Mayr,
2009). They are the entities that traditionally mediate the customers and
suppliers. But as the OTA is taking over their job function, they will be
forced to embrace the technological advancements. This is also called as
Cybermediaries. Those travel agents that take the risk in order to excel and
remain relevant in the current industry will surpass the performance of travel
agencies that refuse to change or improve.

Nowadays, more and more
people feel the need to save their time. By having to visit or make a phone
call to a travel agency they waste their time and energy. Some travel agents
may even charge the guests with consultation fee or service tax once they book
through the agency. Their loyal customers are usually the big spenders. They
will usually return year after year (Marsh, 1994).

Those people who still
choose to have the assistance of a travel agent usually look for the personal
counselling and face-to-face contact. They try to materialize the intangible
product through their marketing communication skill. This is an added value
that other distribution channels may not provide. Some people may also prefer
direct human consultation and interaction as well as the service they offer to
help. The convenience of not booking your own room is the purpose and reason
for 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 potential
customers and brings down the selling price by decreasing the costs of services
and time spent (Heung, 2003). Habit is one of the factors that may alter the
effect of trust, attitude, and commitment on the intention of booking hotel
online (Agag, 2016). When an action has become a habit, it will be harder for
external forces to alter it. This may work against OTAs as some people have
made traditional booking method a habitual action.

Through this
advancement, the industry is facing some challenges as well as benefits. They
have gained importance of the past decade as it opens up new revenue growth
opportunities. As long as there are rooms available in the hotel, customers are
able to book the room through OTA. But these third-party websites usually sell
the room at a much lower price or huge amount of discounts. Furthermore, the hotel
must pay commission to the OTA (Line & Runyan, 2012). This may hinder the
hotel from selling a large amount of rooms through third-party websites (Morosan & Jeong,
2008).

There is an increasing
number of travelers that do their research and bookings through the internet
before travelling (Kim & Lee, 2004). OTA has a strong advertising power and
sometimes even foreshadow traditional travel agencies and hotel-owned websites
due to their low price and fast services. Internet has provided accessibility
and flexibility when it comes to planning and obtaining information. It only
takes 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 multiple
tabs.

According to a
research, about 32% of the hotel revenue is generated through online bookings
in 2013. It has become easier for technologically savvy customers to find the
best price available in the market by browsing through the internet. Some price
sensitive customers are hard to please and attract as they have high
expectations for rooms with low prices. They have developed a deal-seeking
behavior and tend to be pickier. Guests will compare the deal between one site
and another to find the best rate in the market at that particular time of
booking (Jiang, 2003).