"Online Contracting" Increases Travel Agent Production and Support

Feb 12, 2004
Hotelexchange.com recently announced the launch of an "online contracting" facility as a component of their Pelican online hotel reservation system. Online contracting is designed to take advantage of widespread Internet use among travel agents by eliminating the need for manual, fixed-term contracts to "lock-in" room rates and room allotments.

"Hotels often do not realize that manual contracts with agencies to set room rates and allotments for a fixed period means that they are surrendering a measure of control over their product," said Hartono Liman, Director of Pelican System. "Online contracting allows hotels to set rates and allotments as the situation demands, as well as providing better service to agents and other clients".

Though direct reservations by end consumers through the Internet is a rapidly growing trend, travel agents and tour operators still account for 30 - 50 percent of total bookings. However, a recent survey by the American Society of Travel Agents (ASTA) shows that agents are increasingly Internet-savvy, with 98 percent of respondents reporting that they have Internet access at their agency.

According to the survey:

  • 76 percent of ASTA agencies book directly on supplier's Web sites.
  • 81 percent use the Internet to compare online prices with those listed in their GDS.
  • 89 percent provide Internet access for every staff member at their own workstations
  • 59 percent of surveyed agencies have their own web site.
  • 94 percent of ASTA agents regard e-mail as an indispensable business communication facility.

    The survey also reports that during 2003 travel agencies continued to expand, and the number of medium- and large-sized agencies increased. The ASTA Travel Agency Profile shows that the typical agency has five or six full-time employees (up one from 2002), and that the number of agencies reporting sales of US$5 million or more has increased from 12.5 percent to 15.1 percent.

    Online contracting uses the unique features of Internet-based communications - secure transmission of messages to pre-selected groups of recipients, real-time situational updates through instant confirmation of reservations - to provide an alternative to paper-based agreements, which can place hotels at a disadvantage if the market situation changes during the term of the contract. Online contracting allows hotels to distribute confidential room rates while maintaining control over room allotments during high/peak seasons.

    "Pelican is one of the few reservation management systems to offer online contracting" said Hartono Liman. "We feel that this feature is an important contribution to the growing role of the Internet in the travel industry"