Issue dated - 9th
February 2004

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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.

[email-masked]

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