Online Budget Hotels: Aggregators to Accumulators
Indian Hospitality Industry
1. How did technology change the Indian hospitality industry’s supply-side capabilities?
The Indian hospitality industry relied heavily on manual inventory and rate control, which led to considerable time and resource wastage, overbooking and inconsistent rates across online websites. With technology, hotels are able to automate online inventory and rate management. Hotels can target a larger online market with fewer employees. This gives them the bandwidth to focus on improving quality, customer experience and maximizing revenue. In addition, reviews that are transparent to future customers mean that hotels can no longer hide quality and service issues.
2. How do you think the online segment would affect the competitive fortunes of the brick-and-mortar segment of Indian hospitality industry?
To stay competitive, brick-and-mortar hotels need to focus on online visibility, customer satisfaction and rate competitiveness. The online segment has disrupted the sense of complacency enjoyed by established players. By working with companies such as Vista Rooms, mid-range hotels can now provide services, manage customers and online reach on par with four-star and five-star hotels without the inhibiting cost of adding technology and employees skilled in revenue and reputation management.
3. Certain companies, like FabHotels, operate on a franchisee model. How is this model different from inventory model?
A franchisee model is one where the chain operates the hotel, making all the day-to-day decisions on behalf of the owner – including the hotel operations. The owner is also forced to replace the hotels brand name with the chains. With the inventory model, the hotel is free to use their brand name for the inventory not provided to the chain. Also, in the inventory model the chain does not interfere with the operation of the hotel – which the owners are free to do as they please..........
