HEDNA Tackles Online Group Booking
The Hotel Electronic Distribution Network Association in May issued its first white paper aimed at educating hoteliers on the burgeoning market segment demanding online group booking technology. The paper identifies six key success factors for hoteliers in building a standard system for online distribution, most notably defining the value of groups to the property, considering the use of third-party vendors to facilitate online booking and fixing deficiencies in central reservation and property management systems to allow for more flexible parameters.
"Online group travel, for the hotel industry, is the next large opportunity in terms of marketshare out there. We feel that it is a relatively untapped marketplace, but one which, developed properly, can be very valuable to the industry," said Edward Perry, chairman of the association's group distribution management subcommittee.
The committee was formed in response to a 2005 membership survey that showed many member companies still were unsure on how to form a strategy for the group market, Perry said. HEDNA is comprised of hoteliers, management companies, representation companies, reservation service providers and other players in the hotel distribution industry.
"The goal of the committee was to come up with some research on what is currently available in the marketplace and some guidelines or suggestions on how companies might want to move ahead in the future," said Perry, who also serves as director of e-commerce for WorldHotels, a sales and marketing company for 500 member hotels in 70 countries.
"The major challenge that we found in the process of our research was scattered technology issues that need to be resolved before online group travel really becomes a major force in the marketplace and takes over marketshare from other segments," Perry said. "We found that there are some gaps in terms of how a hotel chain actually goes about formulating their e-commerce strategy for groups. There needs to be greater coordination between hotel companies and global distribution system service providers and other providers of online technology to formulate a clear strategy that everyone can follow."
The paper identifies key industry challenges and key success factors for online group distribution. Many members have complained that current technology has a limited ability to be flexible and specific. Other challenges named in the paper were integration and connectivity, real-time availability, the diverse needs of market players, revenue management strategies, impact on existing customer relationships, implementation of strategies and globalization.
The rise of technology companies aimed at streamlining room block distribution online has sparked greater consumer demand for online group booking, he said. Not every property is ideal for online group booking, and transient volume offers more flexibility and profitability, but the entire industry can benefit from the development of standardized technology.
"What we are hoping to offer are options to properties or to management companies to consider," Perry said. "It's not a one-stop shop. It depends on the market segment."
Perry said he sees two trends developing among HEDNA members. Large chains rich in human and financial resources are creating their own booking products for groups, and smaller chains and independent properties are leaning toward third-party providers for distribution technology.
Initial development of distribution technology, which Perry identified as room blocks, is expected to increase during the next 12 months. Access to meeting space and catering services would be developed during the next two years to three years. "You need to start somewhere, and the somewhere at this point seems to be in the area of rooms only," he said.
The committee is working to further research the issues brought up in the white paper, Perry said. "It is the intent of the committee to begin working with other group-related organizations, as well as organizations like the National Business Travel Association and the like to be able to integrate some of the thought processes that came about in preparation for the white paper," Perry said.