Since the internet use is constantly increasing in the tourism industry, the hospitality sector has to
face tough competition due to a rising number of new intermediaries such
as OTAs and others distribution channels taking place on this powerful
communication mean that represents the web 2.0.
More and more hotels,
and especially independent brand hotels, are concerned about the increasing
power of these online intermediaries on their sales and call for more regulated
and fair-play behaviours/policies considered as too strict and hardly flexible.
In Paris, OTA’s represent 30% of the hotels’ revenue. Last October, Independent
Hoteliers in the capital have even decided to create the UHI (Union
des Hoteliers Indépendants) in order to be united in a single buying
group, and with the other already existing French federations, exert more
pressure on online OTAs and their sales-paralysing commissions and practices.
Image 1. Credit: entreprisesbrest.free.fr
Aware
of this “direct-indirect distribution” critical situation within the
hospitality industry, Barteo.com wants
to take advantage of it by creating an alternative solution. Based on the
negotiation aspect already used overseas on websites such as Priceline.com in USA, this internet
platform aims to propose a “zero restriction” solution to hoteliers as state
the platform’s co-creators Thomas Hiley and Tony Grippon. Then it is about to
give “more flexibility to hoteliers and stimulate the customer during its
booking process” (Hiley & Grippon interview, December 2013).
Created in May 2013 by two French, Thomas Hiley and Tony Grippon, the
website is a B to C platform that offers to the customer the possibility to
negotiate its hotel’s bedroom in a confidential way. The customer going through
this platform could “save from 5 to 35% on their bookings” compared to
traditional online solutions ensures the group’s sales director Tony Grippon
(19% in average for September 2013 quoted the latter in an article issued the
15th of November 2013 in L’Echo
touristique.com).
For the hotels, the
advantage is to get more flexibility thanks to a tool 100% adjustable. Hoteliers
rule the game by adjusting prices to seasons and last minutes on real time,
allowing or not allotments and closing their sales whenever they want more
easily than with any OTAs. This of course allows them to get a higher impact on
their own occupancy rate than through other intermediaries and facilitate their
yield managers’ job. Through this platform they have also the possibility to
propose two kinds of services to their customers: “negotiable” or “non-negotiable”
(public price) rooms.
A negotiable room,
real advantage of this platform, is working as follows; the customer has the
possibility to start the confidential sale by proposing its own price. The
website ensures an immediate answer to any negotiation. However, the sale
undertaken directly with the hotel will give only 3 attempts to the latter. Through
the platform’s extranet a hotel displays its public rates, similarly to the one
on OTAs’ websites, but also its floor price which will be used during the
private negotiation. It is an ideal solution for upscale hotels wishing both to
preserve their image of quality and increase their occupancy rate since the floor
price remains confidential. Indeed, it works on a one-to-one negotiation
between the hotel and the customer. Hotels are then free to implement their own
sales strategy. Finally, to lower hotel charges, all negotiated room is prepaid
and non-refundable.
Obviously, a 14%
commission for negotiated rooms (and a 17% commission for non-negotiated ones) is
asked by the website in return of its service to bring customers. Yet this
remains lower than OTAs’ commissions estimated between 17 to 25% today (in
October 2013).
Image 2.
Five months after its creation Barteo.com counts already around 300
hotels within the French, the Spanish and the Italian areas. Brands such as Lucien Barrière, Oceania, Paris Inn or
even Radisson Blu count among the
ones listed. Barteo.com,
mainly focusing on 3 to 5 star hotels wishes to reach the 1000 hotels listed
within the French area (or cover 10% of the French Hotels) by the end of 2014.
Still young this French start-up has a great potential
as no direct competitors are on the French market. Moreover, despite an old
concept of negotiation already used in late 90’s-early 2000’s on similar
websites (Zeprice, Prizzo, Jefixe.com or
today with Priceline.com abroad),
this platform seems to have wait for a more favourable and mature moment in the
new technology advances and the hospitality’s online sales to grow efficiently.
Future will say if this is finally happening at the right moment. Indeed, it is
not only about to use IT in any case, but it is rather to use it accordingly to
a need, at the right moment and with the appropriate tools.
Finally,
more
than a simple alternative to the online intermediaries already known, the
customer is here originally and directly involved in the sale process where it
can fill more powerful on the final decision. It also offers another mean to
satisfy a customer while giving the opportunity to hotels to collect data
directly from the customer thanks to the negotiation tool. A last question
remains; what will be, in the next months, the behaviours of OTAs towards this
trend proposing lower prices?
Written by Samantha Pinet & Marisol Bustos Otero.
Sources:
·
Hoteliers vs. OTAs:
·
Information on Barteo.com:
- Youtube’s video: http://www.youtube.com/watch?v=0unzhG84Rzc#t=16
Image credits:
·
Image 2: http://www.365nights.com
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