As hoteliers grapple with pricing strategies on the
Internet, inbound tour operators in Asia are caught in the
middle. They are the ones who get the wholesale rates, and
some are passing them on to websites while others are still
uncertain in this rapidly-changing business environment.
At the recent PATA Travel Mart, almost every inbound
agent said they had been approached by dot.com startups for
hotel rates. Thus far, inbound agents say, the requests
have only been for hotel rates, not tour rates. "No one
seems to want packages," said one major operator.
Thus far, Hong Kong, Thailand and Malaysia are said to
be the main markets which have seen the most activity in
terms of local agents passing on nett rates to websites.
One Hong Kong-based agent told TravelWeekly East he has no
hesitation about passing on his nett rates to cyber
agents.
"Why not," he said, adding he puts on a 10 percent
markup. "This world is very cruel, if I don't give, someone
will give." His only concern is being paid and he collects
money directly on every booking made. He is receiving 20
bookings a day through third party websites. In contrast,
Paul Chiu, managing director of PC Tours & Travel, Hong
Kong, said that while he has been approached by cyber
agents, "we are not involved yet because hotels are quite
sensitive and quite rightly so. Our wholesaler clients are
also sensitive about this."
"I am not sure of the side effects of this development
because I have no experience of it. I understand other
agents have given their rates. Will this put me at a
competitive disadvantage? I don't know. But so far our
traditional business is doing well, we haven't seen any
erosion." Chiu said that while his agency gets rates for
different market segments, "with the Internet, the world is
one button.
"The dot.com revolution of our business will happen but
I am not sure how I will be positioned in it. Perhaps we
need another type of rate structure. Everyone has to make a
living, somehow it will balance itself out."
Chiu said the key was to focus on what you do best. "I
am still seeking how to protect our partners - hotels and
wholesalers. There is a degree of ethics and professional
conduct." Clement Tan, sales manager of RMG Tours
Singapore, is also caught between "loyalty to wholesalers
and the worldwide web".
"Web agents have asked us for rates but at this point in
time, we are saying no. But you never know, we may be
forced into a situation. We are not the cheapest in the
market and someone will always come up with a better
price."
Tan also believes tour operators in Singapore face a
different challenge - are they as necessary to the tourism
experience as operators in more diverse destinations?
"Other destinations like Malaysia and Thailand are offering
a total experience. Singapore is unique, it's three to four
days and it's so easy to get around."
One operator who has no qualms about working with web
agents is Asian Trails which gives volume deals for volume
production, said group managing director Luzi Matzig. "Many
hotels don't like it but they shouldn't worry where we get
the business from, even it's from the Internet. It's
another channel of distrubtion and it is up to the agents
how they develop sales, whether through brochures or
websites."
His main concern is getting paid and he collects
upfront. Asian Trails sees about two million baht
(US$53,000) a month in web bookings from third party
agents. "If a hotel sets conditions, then we will abide by
the conditions but it will be to their disadvantage. We do
get contracted rates by market but we try to discourage
such deals. We deal with 300 hotels in Thailand and it
would get complicated."
While Matzig concedes that hoteliers should be
concerned about yield erosion, "it's a new way of doing
business", he said. "One or two have called and said they
are unhappy. We say, fine, we will delist you. No hard
feelings."