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How to Start a Travel Business Internet

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					                        2nd Annual Micronesian Tourism Executives Conference
                                “Visitor Satisfaction: Creating Expectations & Meeting Them”




E-Commerce and Online
Marketing Strategies
for the Tourism and Hospitality Industry

Max Palisson, Ph.D.
IT&E - Talaya Internet Services
Email: maxpat@ite.net




Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                   Outline
   Introduction: What is E-Commerce ?
      – E-Business or B2B
      – Recent Internet traffic and usage statistics
      – Trends in the Travel and Hospitality Industry


   Web Marketing Strategies
      –    Web vs. traditional media
      –    Establishing an online presence
      –    Knowing Your Audience
      –    Keys to a Successful Presence
      –    Start an E-commerce site


   Let’s Go Online

   Conclusion

    Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                   What is E-Commerce ?

   E-commerce, or electronic commerce can be defined as
    the way to conduct financial transactions electronically.

   With the explosive growth of the Internet, E-commerce now
    often refers to purchases made from websites with online
    stores

   Global e-commerce transactions expected to reach
    $9 billion in 2000 and $30 billion in 2005


    Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                   E-Business or “B2B”

   Describes how companies are changing the way they buy and sell
    products from each other, by doing online transactions and sharing
    information over the Internet.

   The value of transactions conducted on-line between companies will
    reach $1.5 trillion by 2004 (source: Goldman Sachs Investment Research)




   Recommended lecture: B2B Exchanges: The Killer Application in the Business-to-Business
    Internet Revolution by William W. Woods, Arthur Sculley




    Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                   Internet Traffic & Usage
                   Recent Statistics

World
   about 200 million Internet users


Japan
   ~ 21 million Internet users (Mar. 2000) = 10% of the world’s users !
   Users spend an average of 2 hours 30 minutes online over 5 sessions every week.
   They visit 6 unique sites each and view 49 pages per session.
   Most visited sites in February 2000: Yahoo! websites, NEC, MSN, Sony Online, Geocities,
    Dream Train Internet, Nifty Corporation, Lycos Network, Hi-Ho Internet Service and Goo.


Guam
   25,000-30,000 Internet/e-mail accounts with local ISPs on Guam and Saipan
   an estimated 6,000-8,000 additional accounts with UoG, GovGuam and private companies



    Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                   Online Trends for the
                   Travel and Hospitality Industry

   Business travel bookings online have doubled in the past 6 months
   28 % of business travelers make airline reservations over
    the Internet, vs. 33 % who book on the telephone
    (source: Greenfield Online 3-28-2000)


   Travel Sites Could Be Easier To Use: To be successful, online travel sites
    must be easy to navigate and keep graphics compressed with small size
    (source: WebCriteria.com, 3-21-2000).



   52.2 Million Online Travelers Use Internet For Planning
   16.5 Million Online Travelers Use Internet To Book Reservations

   Compared to all travelers, online travelers are more likely to be younger, have
    an annual household income above $75,000, be college-educated, and work
    in a professional/managerial occupation
    (source: TIA, Feb. 2000, http://www.tia.org/press/020800int.stm)
    Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                   Marketing Strategies:
                   Web vs. traditional media


     Most Marketing strategies still apply to the Web as a new media



Advantages of the Web as a new media :

   Media available 24x7 from virtually anywhere in the world
   Easy and immediate distribution of information to masses
   Expand your market reach to a global -worldwide- audience
   Potential to present multimedia information, and to interact with visitors
   Enhance customer services (offers information of services, feedback forms)

   Can be used to gather information about customers via online contests




    Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                 Marketing Strategies:
                 Before Establishing your Online Presence

Identify your goal(s) before starting
- Advertisement or simply information
- Online sales
- Online reservations
- Customer feedback

Identify your targeted market audience
- Current and prospective customers
   - Specific groups/categories: visitors from Japan, Korea,
   companies, new markets (ex: India)
- Business partners (B2B)



  Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                   Marketing Strategies:
                   Know Your Audience



   Occasional visitors may browse your pages and never return

   Regular visitors may return repeatedly to obtain some service

   Frequent visitors, such as your sales people, may use your pages
    for personal use, or to refer customers to the latest, always
    available information on your products and services.



How to adjust contents to your visitors ?
=> Implement a reward strategy to let you know about them


    Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                   Marketing Strategies:
                   Keys to a Successful Presence


   Interactivity, search functions, feedback forms

   Start small and grow

   Dedicate adequate resources: designing a website is not a one-time task !

   Provide links to other sites that relate to yours (tour operator sites, TIA)

   Respect your visitors’ time with fast loading pages and graphics

   Update your site regularly

   Sponsor contests and online-only promotions (online sales, discount
    coupons, interactive contests)



    Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                 Marketing Strategies:
                 Keys to a Successful Presence (2)

And don’t forget to …


                       Promote your website address !


  - Put it on all of your stationery and public documents

  - Mention it in all commercials and traditional advertisements

  - Register your site with Internet search engines and directories
       (50 % of visitors usually come from a search engine)


  Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                   What you should do


   Register your own domain name

   Use distinctive email addresses.

   Provide adequate staff training on both the Internet in general and
    the specific resources with which you provide them access.

   Capitalize on your investment. Once you have invested your time
    and money into creating an Internet presence, be sure to capitalize
    on it.




    Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                   What you should NOT do



                                                                                                 NO
   Send junk or unsolicited email.

   Disclose customer information.

   Forget that the Internet is a global medium with a multi-cultural
    audience (different language, culture and response).

   Approach Internet marketing without appropriate resources or
    adequate planning.

   Approach Internet marketing with a make-money-fast mentality.


    Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                   Start an E-commerce site
                   Major Steps

   If you want to offer credit card transactions, apply for a merchant bank
    account and consider a real-time credit card authorization system such
    as CyberCash (http://www.cybercash.com/)            (Note that Japanese people are wary of
    credit card fraud and loss of privacy and prefer to make cash payments).


   Decide on E-commerce package vs. custom programming (in-
    house or outsourced)

   Choose a web hosting company, based on features (Frontpage
    support, database integration, SSL secure transactions), platform
    (UNIX, NT), costs, reputation of security and reliability.

   Pick your own domain name and register it

   Get a site certificate for secure transactions (SSL)
    Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                   E-Commerce Applications
                   for the Travel and Hospitality Industry


   Plane ticket booking

   Travel package booking with/without travel insurance

   Hotel room reservation / e-mail inquiries

   Restaurant review with online feedback

   Shopping with shipping / delivery or pickup

   Marketing Research through online surveys/feedback with
    coupons, discounts or other incentives
    Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                   IHRA’s THINK- TANK VISIONS:
                   THE FUTURE OF HOSPITALITY TECHNOLOGY
                   Lausanne, Switzerland, from 14-15 February 2000 - http://www.ih-ra.com/newsroom/press/




The hospitality industry must overcome its general reluctance to invest in new ideas and
   technologies and look for applications that will drive the bottom line.


E-commerce
In order to generate increased revenues - while, at the same time, reducing costs -
    the Think Tank concluded that there were two key plans of action:

   Attracting new business and ensuring incremental business from existing clients,
    ie increasing their lifetime value.
   Greater focus on customer relationship management and loyalty building.

   At the same time, E-commerce also means business transacted with suppliers
    and, as an example, supply-chain economies of scale through bulk purchasing.



    Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
               Search Engine Registration
               Example: Yahoo search for “guam hotel”




Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
               Directory Listing + Online Promotions
               Example: LodgingDiscounts.com




Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
               Listing with Tour Agencies
               Example: Japan Travel Bureau




Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                Reduce costs and develop partnerships
                Example: http://www.hotel-online.com



Reduce  your hiring
and job advertising
costs
while reaching a
larger market

Find business
opportunities and
discounts

Develop
partnerships


 Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                Get Electronic Shelfspace on the Global
                Distribution Network - Example: GDS

A 'GDS' is a Global Distribution System, aka a Central Reservation System (CRS).


There are 4 main systems:
 Amadeus                    owners include Lufthansa, Air France, Iberia
 SABRE                      owned by American Airlines
 Galileo                    owners include United Airlines, BA, KLM, USAir, Swissair
 WORLDSPAN                  owners include TWA, NorthWest and Delta airlines


These systems dominate the world of airline bookings. When these systems expanded to
accept hotel and car rental bookings worldwide, they became global.
Now, travel agents can book air tickets, hotel rooms and rental cars all at the same time from
the one terminal.


This requires to regularly load the inventory (eg. hotel description, rates) into these systems.
For more info.: http://www.hotel-online.com/Neo/Trends/Andersen/1998_GDNShelfSpace.html
 Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                   The Travel and Hospitality Industry & the Web
                   International Tourism Exchange 3-20-2000




Leading travel industry executives attending the International
Tourism Exchange were debating ways to turn a profit from the Internet.



   While thoughtful use of the Internet can help travel companies to save on
    marketing expenses and travel agent commissions, industry executives are
    concerned at the low numbers of Internet surfers that actually book online.
   An executive from one German travel company said that
    only 0.2 percent of visitors to their site book online, while another said that
    only 3 percent of European hotels are now booked online.
   Those in the online travel business admit that the Internet is currently only
    suitable for simple and straightforward bookings.
   Those wishing to plan a complicated journey invariably turn to a travel agent for
    assistance.

    Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
                 In conclusion…

E-Commerce and Online Marketing can …

- Increase your visibility and accessibility in the worldwide
   market
- Increase your sales leads
- Reduce your administrative costs through B2B
- Add a new dimension to your marketing promotions
- Help you get closer to your customers (customer
   service), and understand them better (market research)

- Help you survive in a very competitive market
  Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam
               The End




        Thank you for your attention

                                           Any questions ?




Max Palisson - 2nd Annual Micronesian Tourism Executives Conference - April 5, 2000 - Hyatt Guam

				
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