An Investigation of the value of opaque websites to resort hotels.

Abstract

Purpose

The purpose of this paper is to investigate the value of internet opaque websites to resort properties. The demographics of guests that utilise such websites are considered as well as the revenue such methods of booking contribute to a resort property. It is also considered whether demographics of guests are changing or whether it is simply an increasing consumer trend to shop online. These factors are investigated within the context of the recent economic recession.

Methodology

Secondary quantitative financial data was collected from a resort based on Hilton Head Island, South Carolina, USA, based on business activity from 2006-2009. This data was supplemented by qualitative data based around interviews with three members of the guest service department.

Findings

The study has produced a number of interesting key findings in terms of the quantitative and qualitative data. It was found that the most active years for opaque methods of booking were immediately prior to the recession in 2007 and 2008. Non-opaque methods of booking via the internet increased post recession, in 2009, in line with a decrease in average daily rate (ADR). Post recession, opaque methods of booking decreased despite a continued decrease in ADR. The data shows a decrease in the total number of rooms sold during the recession in 2008, and a return to post recession levels in 2009. ADR post recession however was higher, and therefore despite a similar number of rooms being sold in 2007 and 2009, total revenue in 2009 was higher. Interviews with the resort staff identified a general feeling that guests booking via opaque methods generally spent less whilst at the resort and did not contribute to revenue in the same way guests booking via direct methods do. There was a general feeling that these methods of booking were used simply to increase occupancy at times when the resort would otherwise be quiet.

Research Limitations

There are limitations to this paper in that the findings are only applicable to the resort studied. Further research would have to be conducted to identify if the findings can be generalised to resorts on a global scale. This research has also been conducted during a time of recession, and whilst key for this research, identified spending patterns may not be applicable during times of a healthy economy.

Value

This paper holds value both academically and in practical terms. Academically it supports theories suggested by Alred, Smith and Swinyard (2006) and Alder (1992) in that there is an increasing spend to shop online. At the same time the findings question those of Palakhurthi and Parks (2000), who suggested consumers that shop online are wealthier and bigger spenders. Practically the paper is able to make recommendations to the resort industry in terms of staff training and marketing methods. Crucially this paper makes a final assessment as to what extent the use of internet opaque and internet non-opaque websites are of value to the resort market.