Cash Flow Benefits Still not Fully Appreciated
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That trend has certainly been seen at the Tourism Exchange, an online marketplace for the real time supply and distribution of tourism services for the New Zealand tourism industry.
"We're definitely seeing a continuing growth in the adoption of online booking," said marketing manager, Yvonne Lim.
"Global trends tell us that over 65 per cent of people are now using the web to make and confirm their bookings. At the Tourism Exchange, our core driver is to be able to convert interest in an operator's product into bookings in real time. In the past it's been OK for an operator just to have an enquiry button and an 'email-us button' but consumers are no longer looking for a 24 hour confirmation of their booking – they want instant confirmation. They're not prepared to wait for somebody to get back to them. By then, they've already booked with a competitor. We want to ensure the consumer is able to confirm their booking at the same point at which their interest in it had been aroused by their online research. That's what real time's all about."
But Mrs Lim says those at the Tourism Exchange can see that there are a number of operators across New Zealand who have yet to embrace real time. "Obviously the larger hotel chains have more sophisticated systems, but for many small and midsized properties across New Zealand, we're still seeing a lot of on-request type systems in use. That can mean lost bookings because travellers are going to have to wait for a confirmation from the property they would like to stay in.
"A consumer might have set aside the time to do their online research, but they're not necessarily going to be doing that 24 – 48 hours later. People are busy and they want to be able to complete their transaction at the same time that they looked at a property online and decided that was where they wanted to stay." Mrs Lim believes the New Zealand market has still got quite a way to go in terms of adopting real time, including a lack of understanding of the cash-flow benefits of taking payment in full up front.
"Part of securing the booking in real time is that the consumer actually has to pay for it at the time of booking. Often operators are taking payment three months in advance.
"We still hear of cases where operators have not even taken a deposit on a booking for a five day or more stay over a peak travel period. They might be a small property and if the guests don't show up, it can be very expensive. Taking payment up front is a definite benefit because consumers are much more motivated to arrive and stay if they've paid in full. It's no different than what they now have to do with airlines. Accommodation is just following the same trend."
