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Consistent pricing will give consumers booking confidence - Travel Trends

Peter C. Yesawich

The increasing popularity of the Internet for the distribution of travel services has provided lodging marketers with new and innovative ways to sell guestrooms. It also has created a market environment in which distressed or unsold inventory might be liquidated quickly and efficiently, often at deeply discounted prices.

Not surprisingly, consumers are delighted when they find a great deal online. Hoteliers, however, are beginning to question the wisdom of variable pricing across multiple distribution channels in an increasingly transparent world.

A majority of active leisure travelers in the United States believe the Internet is the place to get the best prices for travel services. According to our 2003 National Travel Monitor, the percentage of active leisure travelers who believe the Internet is the source for best pricing has risen a remarkable 20 percentage points during the past 12 months, to 58 percent from 38 percent, as illustrated in the chart.

However, as most travel suppliers will attest, this belief doesn't necessarily reflect reality, nor is it a perception many would like to propagate. And therein lies the challenge, because price integrity is difficult to achieve in a fiercely competitive market environment, especially one in which third parties and/or franchisees control much of the inventory.

A related perception also has begun to emerge among consumers--that it's necessary to visit multiple Web sites to find the best rate. The typical online purchaser of travel services visits an average of four Web sites before booking.

Consumers are behaving this way because no one wants to overpay in a buyers' market, and the sites have developed technology that makes these comparative searches easier than ever. The problem is, the more consumers shop around, the higher the probability they will find an alternative to the brand that inspired their search.

This doesn't mean the Internet shouldn't be used aggressively to promote special packages and rates. It should--because of its marvelous reach and ability to deliver results quickly. But consumers should find the same deals wherever they look, otherwise their current suspicion about what might be hiding behind "door number three" will continue to grow.

Hoteliers need to convince consumers the rate will be the same regardless of where they find it. And even more importantly, they need to compete on the inherent appeal of their brand rather than the multiple ways in which people are able to shop and book it.

Consumer's perceptions about sources for best travel pricing

                                   2002   2003

Hotel/airline/car rental company   33%    22%
Internet/online service            38%    58%
Travel agent                       29%    20%

Source: 2003 National Travel Monitor

Note: Table made from bar graph.

hmm@advanstar.com

Peter Yesawich is president and c.e.o. of Yesawich, Pepperdine, Brown & Russell.

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