EFT Travel Distribution Middle East 2008Considering the rapid pace with which the hospitality industry is growing in the Middle East, it is interesting to assess how the established chains are approaching their distribution in the region.

Published: 16 Jul 2008

EFT Travel Distribution Middle East 2008

Considering the rapid pace with which the hospitality industry is growing in the Middle East, it is interesting to assess how the established chains are approaching their distribution in the region.

While the traditional ways of booking continue to dominate, the hotels have also set objectives to drive more business through the online channels.

A company like Millennium Hotels & Resorts, which had set up its regional base only two years ago with three hotels, has now nine operational hotels. Plus, there are 12 more hotels under construction.

"With expansion in the region, we have also taken major steps with our distribution which has successfully moved some market share to our hotels to a stage where 14 percent of our business mix comes from electronic distribution channels versus two percent two years ago," shares Tarek Elsherif, Regional Director of Sales & Marketing, Millennium Hotels & Resorts - Middle East & N.Africa.

"We are taking advantage of being part of the global set up of Millennium & Copthorne Hotels with a very solid infrastructure in Asia Pacific, Europe and the US, which give us easy access to all these markets on both online and GDS levels," says Elsherif, who was one of the speakers during EyeforTravel's first Travel Distribution Middle East conference held in Dubai recently.

In an interview with EyeforTravel.com's Ritesh Gupta, he spoke about the direct channels, 3rd party Internet channels and much more. Excerpts:

Ritesh Gupta: How do you assess the role of channels such as hotel direct online and 3rd party Internet channels in this region?

Tarek Elsherif: From a hotelier's point of view and specifically from a sales and revenue management point of view, I see these channels as my extended sales force and my sales manager who reaches out to clients at their homes, computers and everywhere.

There are still hotels which consider these channels as a luxury that they cannot afford or they look at it as a medium to sell at your highest rates no matter what the competition is offering.

Ritesh Gupta: Do you think online is not the panacea for all distribution problems. What's your viewpoint regarding the same?

Tarek Elsherif: To start with we have to agree that there is a price for everything, and considering these channels as my extended sales team, then there should be at least some expenses equivalent to the salary of this sales person, who is represented in the web search optimisation, pay per click and IT.

I still believe that cost of doing business online is still less than GDS where you still have to pay transaction fees and commissions no matter how long is the stay and how low is the rate. (In online business), the actual cost of the booking is minimal and all the other expenses should be considered as cost of doing business.

Ritesh Gupta: Do you think Hotel Direct channel is becoming less important as the Internet grows and single image inventory becomes the standard across all hotels?

Tarek Elsherif: The hotel direct channel will still be an important channel especially in the Middle East where the majority of business is booked via personal contacts and not just generic booking on the Internet, although the Internet bookings are growing now in this region. However, there is still the cultural effect of dealing and interacting with someone we know or trust rather than dealing with a computer to make my booking.

Ritesh Gupta: How do you progress made by online travel intermediaries especially online travel agents in this region? How do you assess your relationship with such intermediaries?

Tarek Elsherif: Online travel intermediaries have grown very quickly in the region over the past three-four years. I see more and more new websites opening every day, however, there are very few of them that we can rely on for marketing and onward distribution. This is due to many reasons…the most important reason is credibility in offering genuine marketing services to promote our hotels.

Nowadays there is a lot of "home-based travel agencies" who would build up a nice website and then the same is promoted to hotels to be listed. Hotels end up being there for some time without really getting any business, not to mention paying the listing fees, positioning fess, etc…

We have built up a very strong relationship with all of them on both regional and global level to ensure that we are associated with key players and we are into a win-win situation.

Ritesh Gupta: The increment in the number of distribution channels has highlighted the significance of channel managers especially when it comes to handling a multitude of manual extranets. How do you assess the situation today from a hotelier's perspective?

Tarek Elsherif: I fully agree with you that the importance of the channel managers is increasing, which is a must use for hotels now which will save on errors and time consumed to update each extra-net separately.

The challenge hotels have right now is that there is an increasing number of channels that are coming up every day and the current available channel managers are not connected to all of them yet. So there is still time being spent on managing inventory on a number of channels directly on the extranet.