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Value of the Internet for the Consumer

Presentation to the February 1999 EuroHotec Conference, Vienna

There is no doubt in my mind about the Internet's current significance and future potential!

One illustration of the Internet's significance is the just-released 1998 year-end production statistics for five of the largest Internet travel booking sites:

Travelocity
Microsoft Expedia
Preview Travel
Internet Travel Network

Together, in 1998, these 5 sites processed (according to Philip Wolf), one billion, forty-three million dollars in bookings.  A number that speaks for itself.

The Internet is undeniably a powerful medium, but there are specific characteristics -- some positive, some negative -- about which consumers are well advised to be mindful.

First, let's quickly look at the negatives:

1. For many, the Internet carries a promise of unlimited information.  The reality sometimes, however, is sadly hollow content.  The information the consumer finds on the net is sometimes "a mile wide and an inch deep".  In some cases, it is little more than rack brochures transposed to a web site.
   

2. Information is often laborious to locate.  Difficult to use and inefficient search engines produce hundreds, thousands or hundreds of thousands of qualifying sites leading to information overload.
   

3. Add to this, inconsistent accuracy.  Data displayed is sometimes:
       - Out of date
       - Contradictory
       - Misleading, or
       - Just plain wrong!
   
   Let's pause here for a word of caution for all who serve up information on the world wide web.  Incomplete, vague, or inaccurate data may well result in inaccurate consumer expectations, and, therefore, angry, disappointed clients, who then tell their friends, who tell their friends, and so on.
   

4. Next negative -- the Promise of Best Pricing.  A dangerous misconception and I'm not certain where it originated.  "Best pricing" is no truer on the Internet than through 800 number toll free services.  Best prices are not assured . . . not even necessarily intended.  Let me voice my uneasiness that this expectation may well lead to pain for all concerned at some point in the future.
   

5. The Registration Hassle.  Again and again consumers are asked to register before entering a site.  This is inconvenient and invasive.  It's not required in the real world.
   

6. The comparison conundrum.  Today there is no easy opportunity for side-by-side hotel price comparisons such as the GDSs allow.  This will change.  This may well be the "killer application" for Internet travel.
   

7. The "Could Not Locate Site" message.  In other words, inconsistent site availability.
   

8. Credit card purchase concerns.  I would suggest these are no longer valid but "perception is reality".
   

9. The World Wide Wait.  About which we are all familiar.  Recent estimates provided in The Industry Standard indicate that the travel industry is missing out on $28,000,000 per month in revenue because of limited bandwidth problems.

Having identified these negatives, let's turn to the positive characteristics.

The Internet is:

1. An unparalleled global information resource.  It is supported -- fed -- by suppliers, libraries, data bases, and organizations from around the world.  It is an unprecedented information repository.
   

2. It offers outstandingly convenient accessibility.  It is open around the clock -- 7 x 24 x 365.  Plus there is no concern about the availability of, or inconvenience to, a real person.
   

3. In many cases the Internet goes far beyond superficial printed sales literature.  It offers product details, often together with analysis and evaluations plus user comments.  Either good or bad, these are powerful decision influences.
   

4. An unprecedented opportunity to build a customized experience.  Through personal research travelers can plan in detail, in consequence arriving better prepared and better informed, departing with a higher level of satisfaction with their overall travel experience.
   

5. The Net offers the opportunity for supplier/guest pre/post dialogue.  In advance of travel, to answer questions, to shape expectations.  In follow-up, to receive feedback and to perpetuate and strengthen the relationship increasing the likelihood of repeat/referral business.
   

6. Through the Net, the traveler will be served by conventional and emerging sales models.  The latter include e-bay.com and priceline.com.

So, what's the bottom line?  I believe the Internet:

• Is already and will continue even more dramatically to change consumer shopping and buy habits.
  

• Will eliminate all of the negative issues I identified earlier -- some sooner, some later but eventually all of them.
  

• It will happen faster than we expect.  And finally,
  

• It will have much more far-reaching consequence than we today expect.

© John Burns and Hospitality Technology Consulting 1999.