Hotel E-Bookings Catching On

Booking hotel rooms online has lagged behind the levels of travelers booking air, but travel buyers with significant air bookings last week told Business Travel News that the gap narrowed in 2001, saying travelers' increasing comfort with online booking and improvements to the systems have made the hotel piece more user-friendly.

"The percentage of our hotel bookings online went up in 2001 to the point where it's almost rivaling the number of air bookings," said Cheryl Hutchinson, corporate travel manager of American Management Systems, an information technology consulting firm in Fairfax, Va. "We've been able to achieve roughly 80 percent adoption of air flights booked online and the hotel piece, which was slower to catch on, has now approached that level as well." AMS has approximately 2,500 frequent travelers and uses the GetThere booking tool.

Hutchinson speculated as to why lodging has been the "lingering piece" of the online booking process at her company. "In terms of ease of booking, air was the easiest to execute, followed by car rentals, followed by hotels," she said. "It might have been a matter of the large number of hotels available to choose from in many markets, compared with the more limited options in airlines or car rental providers. Or travelers may simply have wanted to speak to an agent to be reassured the hotel room they were being offered met their specifications."

As travelers have continued to use online tools to book the air flights, they've grown more comfortable with the technology and are more likely to make use of its other functionality. "Air is a simpler buy, so many of our travelers logically started out with that and started booking cars and then hotels, once they felt more assured," said Elaine Triggs, vice president and corporate travel manager of Wachovia (formerly First Union Corp.) in Charlotte, N.C. At Wachovia, adoption rates for air bookings are broken out separately from car rental and hotel bookings, which are broken out together in an "all other" category. Approximately 40 percent of these bookings are now done online, compared with 43 percent of air bookings as of mid-year 2001. Wachovia, which has roughly 7,000 frequent travelers, uses TRX Inc.'s ResAssist booking product.

At the same time travelers were becoming more comfortable with online technology, such providers as GetThere and TRX continued to improve the hotel portion of their online tools in 2001. "Travelers needed to have a better way to navigate the information being shown," Triggs said. "The providers responded by making the presentation more appealing through the use of things like icons, color and bolding. This was important because it helped facilitate booking."

Overall, booking online has been shown to be cost-effective for companies, but, specifically, booking hotels online in 2001created additional cost savings, almost inadvertently. "When travelers book hotels this way, we've found they're much more likely to choose one at a lower price point than they are when booking through an agent," said Jim Lee, corporate travel manager for Honeywell in Morristown, N.J., who also saw an increase in online hotel bookings in 2001 vis-à-vis air bookings. Honeywell presently uses Sabre's BTS booking product, but plans to transition to American Express' CTO tool later this year.

Lee said the agent typically is under time pressure to complete the booking and, therefore, will only cite one or two sample hotels—and rates—in a given destination. "By contrast, the online display provides a more detailed list of properties and rates, allowing travelers to take their time and make a more informed decision in terms of potential cost savings," he said. "For the most part, travelers want to be good corporate citizens and they'll choose the lower price option more times than not." Mapping features, which let travelers confirm the proximity of a hotel in relation to their business appointments, also became more sophisticated in 2001.

Online hotel listings can be structured so that both preferred and non-preferred properties in a city are included. "We found that including the non-preferred in such a crowded market as Chicago, for example, didn't really discourage the use of the preferred properties and actually ended up giving us valuable flexibility," said AMS' Hutchinson. "It's very clear to travelers—through highlighting—which are the preferred choices. But the hotels where we have negotiated rates mostly turn out to be close to either our own offices in the city or the offices of our major clients. Non-preferred choices, therefore, were important to include in case the preferreds were sold out or the travelers' business took them to other parts of the city where we had no preferreds."

For their part, such online booking tool developers as GetThere and TRX take some responsibility for the historic discrepancy in hotel adoption rates versus air. "When online tools were first rolled out, there was a tendency to focus on air, which was natural since air represented the largest dollar volume," said Jay Gabany, GetThere director of product marketing. "There was also a percentage of trips that didn't require a hotel or where travelers left the hotel booking up to the people they were visiting who knew the local market."

Yet, Gabany said the online booking record for hotels was really no worse—and, in many ways, better—than the record when booking with an agency. "Our research for last year indicated that roughly one-out-of-four to one-out-of-three reservations made online for air was accompanied by a booking for hotel. By contrast, only one out of five air reservations made through an agency was combined with a hotel booking," he said.

According to Gabany, this was about both the proficiency of online technology and shortcomings with the agency system. "Many agencies reduced staff last year, which put even greater pressure on the remaining agents to complete the call quickly. Historically, agencies often didn't push for hotel bookings because they were so labor-intensive, hotel commissions could be hard to collect, and there was so much more money to be made in air."

At the same time, the user interface on the hotel portion of the booking tool wasn't as well-defined as it subsequently became. "Once the tool screwed up in its hotel information, the system understandably lost credibility with travelers," said Steve Reynolds, TRX executive vice president. "In terms of proximity to where you needed to be in a city, for example, you wouldn't be confident your hotel was where you needed to be."

This year, by contrast, the mapping feature has become much more sophisticated. "In the latest generation, in fact, travelers enter the address of their business appointments and the system displays all the hotels in that area," Reynolds said. "Coming is a trip model format where with one click, the traveler can book air, car and hotel."