Far too many hoteliers in Latin America have not adopted the latest online marketing tools for their businesses. A group of Argentinian hoteliers wants to bridge this digital divide by pooling resources.
Argentina’s hotel and restaurant federation is looking to level the playing field in online distribution by launching a local reservations website. The Federación Empresaria Hotelera Gastronómica de la República Argentina (FEHGRA) has launched ReservAR Alojamiento, which promotes accredited local establishments, whether or not they are affiliated with the association.
The move comes as Argentine hotel brands risk becoming collateral damage in online distribution wars. Companies such as Despegar, Google, Booking.com, Expedia, Kayak, Trivago, Tripadvisor and Ctrip are making inroads in Latin America.
As consumers begin to embrace online booking, many local travel agencies are lagging behind in online sales.
The new project of the Argentine leaders in the hotel industry aims to bridge this digital divide. It provides free digital management and marketing to licensed hotels, inns, resorts, cabins and vacation rentals.
“In research, we learned that around 60% of the 17,000 companies in the sector were still not using digital tools in 2020,” said Fernando Desbots, president of FEHGRA.
Desire Hotels Direct Bookings
The project provides a booking management system that relies on manual spreadsheets or legacy software systems. Reservations are made directly with the hotels. The federation does not intervene.
The tools can offer hotels a chance to increase their direct sales. In Latin America, direct sales are well below the desirable target of at least 25% of total bookings, on average, according to the Argentine association.
Direct bookings are desirable for hotels as a cost saving measure, eliminating middleman fees.
“Some of the small businesses in our market can’t afford to lose the 15-30% OTA commission [online travel agencies] are paid, so they were not present on consumers’ preferred digital channels,” said Florencia Landivar, Vice President of FEHGRA.
Direct bookings also help hoteliers retain customers who book repeat visits because they have more digital engagement with customers.
Harder than it looks
The association recalls that the objective of ReservAR is not to become the next Trivago or Booking.com. He says the project will be worth it even without becoming a significant competitor to big tech companies.
“What we’re doing is leveling the technological playing field between small and big companies — and between those in capitals and other places,” Landivar said.
The other part of the project, trying to attract consumer reservations, can be difficult for associations to achieve.
For example, in 2018, the Hotel Association of Canada invented a national Check In Canada price comparison tool. A few tourism promotion partners, such as Explore Edmonton, have integrated the tool, which allows travelers to search for hotel availability on particular dates. But the project suffers from a lack of broad sector participation.
Argentina’s new ReservAR site may also be suffering from a “which comes first, chicken or egg” issue. It must involve many hoteliers to become attractive to consumers. But some hoteliers may be slow to adopt it because it may not deliver many reservations in the first few days before consumers find out about it in large numbers.
In a sign of hope, some big names are already participating in ReservAR, including Esplendor by Wyndham, Howard Johnson, DOT Hotels and Los Pinos Resort and Spa Termal – the country’s only five-star resort.
To help promote the site, some local and provincial governments are already including ReservAR on their tourism promotion sites. FEHGRA also organizes conferences and training sessions for hoteliers in its 54 offices located throughout Argentina. In each of them, they will leave a person responsible for helping owners learn how to use the management system and how to sell themselves better online.
ReservAR’s lack of consumer reviews or opinions may also disappoint some early adopters. But adding reviews is a planned feature.
The association is also working with contacts at Google on how to improve performance online and at metasearch websites like Trivago and Tripadvisor to include ReservAR in their search results. The association offers regional travel agents a way to book through its system.
Until now, the commitment of the association was paid from its funds. But the hotel group has a game plan for the website to become self-sufficient.
“We are on the initial cusp of gaining critical mass and aim to reach around 4,000 establishments by the end of the year,” Landivar said. “We will then try to grab consumer attention and increase traffic before looking for sponsors, although some private banks and credit card companies have expressed interest.”