Avenues targets hospitality sector through ResAvenue

Even as occupancy rates in hotels reach new highs, hospitality chains in India are still giving away a large chunk of their margins to middlemen and tour operators. Can the Internet, which has revolutionised other sectors, help cut away middlemen and transform this sector too? Avenues India, a player known for pioneering e-commerce in India through its affordable payment gateway is now betting big on its product for the hospitality industry—ResAvenue, which the company believes will boost profits in the hospitality industry. Srikanth R P has the details

By going online, hotels can cut through the distribution channel, save on costs and more importantly gain direct access to the end-customer, says Vishwas Patel

Like many other sectors in 2003, tourism too saw encouraging growth. The arrival of international tourists into India saw an increase of 20.8 percent over 2002. Additionally, most international travel magazines positioned India as one of the top five destinations to visit in the world. But despite this encouraging growth and attention, India still lags behind in the global tourism stakes and has currently less than 1 percent of the global tourism market.

While the Internet is a popular medium to attract the global traveller, Indian hospitality chains suffer when it comes to closing a deal because of the lack of necessary infrastructure to complete an e-commerce transaction. While many Indian hospitality chains do have websites, online interaction is restricted only to the initial contact through the website. In the absence of a proper e-commerce solution, the rest of the transaction is still done through the offline model (telephone, fax or e-mail). While there is a tremendous need, not many hotels apart from the Taj Group have a mechanism to complete an entire transaction online. But the potential certainly exists and is significant.

Globally, over 20 percent of hotel inventories were bought on the Net last year, of which 70 percent consisted of direct-to-customer sales. But while Indian hotels would like to use the Internet to enable more direct-to-customer sales, they are hampered by the cost of investing in a reservation solution.

Avenues India, a player known for revolutionising the e-commerce scenario in India, is now looking at repeating its success in the hospitality industry through a specialised hotel reservation engine christened ‘ResAvenue’.

Says Vishwas Patel, CEO, Avenues India, “While tourism is one of the biggest emerging sectors in India, hotels have to still pay close to 30 percent to tour operators and agents. In these times of intense competition, it would be more appropriate if hotels could pass on savings to the end-customer. Our product, ResAvenue, can help a hotel become more efficient by doing everything online. For example, room selection, dates, requests for airport pick-ups and most importantly, payment of deposits can all be done online.”

Besides saving costs, hotels can also gain direct access to the end-customer. For hotels who do not want to do away with their traditional system and want a combination of both systems, the product has an option of an agent log-on. Pre-negotiated contract rates with hotels can be fed into the system and agents can book reservations for their customers online. The system also has an option of a corporate log-on, which organisations can use for bulk bookings.

While pricing has been a key reason why companies in the hospitality sector stay away from investing in a reservation solution, a hotel can avail of ResAvenue from a range starting at Rs 10,000. Besides, a hotel does not need to invest in infrastructure as the operation is hosted out of Avenue’s servers. All a hotel needs is a PC with an Internet connection. While individual hotel websites may not be as popular as travel sites, the company believes that this approach will help a hotel target the end-customer directly and pass on savings to customers. As most hotels are interested in attracting the global traveller, ResAvenue has the option of supporting multiple languages and currencies. Also built into the system is a powerful customer relationship management (CRM) module that displays several statistics useful for marketing.

More importantly, the product will give small hotels a big chance to compete aggressively with large hospitality chains.

Conclusion

With pricing that is extremely affordable for small as well as large hotels, ResAvenue has the capability to gain big market share in an industry that does not have a cost-effective solution to cater to its needs. With a product that is priced at one-tenth of what is charged by other vendors and with additional features, ResAvenue does seem to have an enormous advantage over other competitors. Besides pricing and features, one big advantage the company enjoys is its indigenously developed payment gateway that is India’s largest payment gateway today. With the hospitality sector clearly on the upward curve, the product launch could not have come at a better time as more and more hotels are looking at targeting the global traveller.

srikanth@expresscomputeronline.com