ICT and e-business in the tourism industry ICT adoption ... - empirica

Tourism
Whereas today, the visible costs of distribution – commissions and costs for marketing –
are constant throughout the year, in the future, the height of both (commissions and
marketing costs) will be based on the aspect of seasonality. In terms of hidden costs, the
potential for future cost reduction is more complex.
Cost of electronic channels: In the future Accor intends to realise more direct
bookings via its own online-booking sites. Increased web-based direct marketing
efforts shall bolster this effort. More direct internet bookings additionally imply
fewer costs for external electronic channels, such as the various GDS solutions
that Accor is using.
Cost of direct bookings: These costs basically reflect the activity-based costs for
direct bookings in a hotel, e.g. the costs for picking up the phone and manually
executing a room reservation. 57 Accor intends to reduce costs of this kind by
means of emphasising the use of direct, web-based links for hotel reservations.
Costs for sales forces: In the past, the rates of intermediaries were based on
their brand name, their history and thus their negotiation position. For the future,
Accor envisages a performance-driven kind of reimbursement. Determining factors
will be neither the name nor the history of the intermediary but, exclusively, the
number of bookings that it provides to the group. The negotiation of reimbursement
agreements should be conducted centrally, addressing all Accor hotels at the same
time and not, as is the case today, for the group’s different sub-divisions. This is
considered to significantly decrease the sales costs.
Lessons learned
This case study illustrates a number of lessons learned:
1. The introduction of e-business solutions does not necessarily decrease the costs
for a company. On the contrary, for Accor the costs of online distribution turned out
to be higher than those of classic distribution channels due to a steadily increasing
number of intermediaries.
2. E-business solutions allow the automatic collection of information which can be
used for controlling purposes. In this way, Accor was able to thoroughly analyse the
structure of its distribution costs.
3. The introduction of e-business solutions may finally have repercussions on the
strategic choices of companies in various fields of their business. In the
accommodation sector, e-business solutions may change distribution strategies
fundamentally, impact negotiations for commissions paid to intermediaries or even
alter the structure of distribution channels.
4. Regarding CRM, the introduction of e-business solutions allows for more targeted,
direct marketing activities. Though the impacts of Accor’s CRM activities are not
yet visible, these activities may reinforce the group’s negotiation power vis-à-vis
intermediaries active on the market, both traditional and web-based.
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In this context, especially so-called off-line websites provoke many telephone reservations,
which trigger additional activity based costs for individual hotels.
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