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Small Hotels in India Consider Online Reservations

28. May 2012
The country is getting ready for online tourism.
Small Hotels in India Consider Online Reservations

The need for online reservation platforms is growing, and with it, the demand for complementary hotel reservation services, like booking theater tickets, cultural tours, etc.

Global distribution systems (GDS) compile airline, hotel and transport company inventory and distribute it to customers, however most of the small hotels in India do not use these tools. InterGlobe Technology Quotient Pvt. Ltd(ITQ ), a GDS from InterGlobe Enterprises Ltd, manages the low-cost airline IndiGo, and plans to launch a new platform that will allow small hotels to connect to the new platform and book and sell easily and simply through online and traditional agencies.

Currently, a hotel has to spend at least a million rupees for GDS software that reaches point of sale. The new system will be more economical and therefore more accessible and cost effective for small hotels. Thanks to this new application, approximately 30% more hotels will be able to book through GDS.

As of now only 10% of the hotels in India offer this option. On last count, India has between 200,000 and 300,000 hotels. Government figures for 2010 indicate that in terms of accommodations, 125,000 hotel rooms are qualified and 2.5 million are not. According to ITQ president JB Singh, marketing opportunities will result from promoting this area. Large hotel chains, which account for some 20,000 to 30,000 rooms, are already on GDS systems, but 400,000 to 500,000 quality hotel rooms are still left out. And the number keeps growing.

Ankur Bhatia, director of Bird Group, a travel conglomerate that owns Amadeus India Pvt Ltd, believes that hotels are resigned to using local distribution systems that target domestic tourism and that are much cheaper than GDS. Amadeus is a leading global distribution system with a 60% market share of the Indian subcontinent´s travel technology.

According to Chetan Kapoor, research associate at PhoCusWright Inc, a travel research firm, “online agencies have signed direct contracts with many of these independent owners. It is important for GDS companies to attract more hotels since online agencies (OTAs) are strong in this market”.

JB Singh says that “in addition to getting more domestic hotels to go online, hotel ancillary services have to be added too. The way revenue is generated is changing with more combinations of travel products and an increased demand for theater, cultural events and tourism”.

Bookings via smart phones are also growing. In that regard, BJ Singh says that in a few months his company will launch a new mobile platform. According to Chetan Kapoor, “It is easy to book a flight by mobile phone, but for now, hotel reservations are more complicated. Besides, the process gets slowed down by not having a unified platform that can includes several mobile servers. The challenge is in how these companies can convey the online experience, and how the customer can receive the service through mobile”.



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