One of the most glaring omissions from the coverage of the hotel partnership between eBay and Octopus Travel in recent weeks is how far the auction giant is willing to go in travel.
In the UK at least eBay is ramping up its efforts following the deal with the Travelport-owned Octopus Travel to provide a stream of 50,000 hotel properties into a co-branded store.
Officials admit that the partnerships is actually the start of something much bigger.
eBay says the Octopus deal marks an eagerness from its end to bring in other travel sectors and their respective product providers in “flights, cruises, trains, package holidays”.
The company has an ongoing partnership with German travel technology firm Cultuzz – a partnership which has been in place for a few years to provide a media-based site under the CultBay brand for travel sellers to stream products into a search and mapping system.
It currently plugs into ten eBay sites around the world and automatically includes products in the CultBay system.
Travel companies in the US, such as Expedia, also use eBay as a traditional media partnership to include search and booking modules as part of display advertising on the site.
The Octopus deal is something different entirely, officials say. Octopus has a co-branded site within eBay to distribute its inventory and is not part of the auction system.
What eBay didn’t mention at the time of the Octopus deal included its pervious forays into the travel sector with dedicated co-branded partnerships.
A list of old partnerships – mostly in the US – reads like a mini-who’s who of the travel sector. In 2001 eBay had an ill-fated partnership with Priceline. It also worked with Expedia.
Both deals have since fallen by the wayside with no explanation.
In Australia it worked with Webjet for the LotsofHotels brand. This has since been axed and users are now directed to WebJet’s StayThenPay site.
Some might argue that the odds are stacked against Octopus if history is not to be repeated.
However, doubters might be proven wrong now that eBay appears to have a dedicated strategy to reach into travel much further than it ever has before.
Thomson Holidays had their own ebay shop for quite a while. Sold packages and flight only.
Airtours meanwhile had a whole stand alone site for auctions.
Problem #1 : It’s not that cheap, ebay fees are for listing as well as the success fee. On top of that you have probably got paypal fees.
Problem #2 : It takes time / human capital to set-up and monitor as well as market the auctions.
Problem #3 : Execution – You may have to allocate specific seats to the promotion, and that could mean blocking them off your main inventory just in case someone buys at auction and then add the names afterward. If there is no bidders you have had seats off sale for a period of time. If you didn’t do this you risk overbooking.
Otherwise you may decide to offer something like “any seat in April excluding Friday and Sunday” but again you have a manual process at some point to get the passengers booked in the res system.
Solutions : Execution – Only sell standbys (flight only)?
Solutions : Execution – Charge a booking fee ?
Solutions : ebay fees – negotiate a bounty from ebay for every new member you generate for them, place the auctions in your email newsletters and the revenue from the new customers you get from ebay could offset or surpass the fees.
Or maybe the solution is to reverse the auction: instead of having travelers bid for lodging, lodgings should be bidding for travelers.
Great concept Alex. I just had a quick look at your site and hopefully there’ll be more hotel participation soon – in London for instance.
Alex: Not sure about that. You’re effectively reversing the distribution model that way. Surely it would put pressure back on the marketing departments to find prospective travellers?
Ebay is supposed to be about independent and small sellers offering products to consumers. You don’t find large store chains (i.e. Target, BestBuy, etc) using Ebay to sell their products. Nevertheless, when approaching the travel industry, Ebay has tried to convince large travel distributors to sell their services in there. That, I think, will never work. If Ebay wants to succeed there, they should be trying to connect consumers with small providers of travel services.
In most countries, with the exception of North America, most lodgings are small or independent. These lodgings, that may include hotels, bed and breakfasts, vacation rentals, hostels, etc., are used to constantly respond to inquiries by phone or via email. A reverse auction platform would simply ease the process. Granted, this may never work for large hotels and hotel chains, but both Ebay and the Amazon Marketplace were able to grow not paying attention to the large players of their time.
Great concept Alex but how do you go about hoteliers finding out these customers. Are you planning to send them emails every time customers requires a hotel in the same city they have available rooms?
Cheers, Guillaume
PS: would love you to participate in the next ‘Ask the CEO’ feature on HotelBlogs.net
to me eBay brands means a market place that matches up buyers and sellers of specific items that are “non-perishable”.
if a hotel room is empty today, it has perished.
i don’t think ebay is good at matching users to perishable inventory like date specific hotel rooms, nor flight, nor cars.
so try as they may, or even with a reverse system like Alex is hypothesising about, I’d say if its perishable – forget it. plus if it’s not done uniquely – why bother.
when webjet publicised their eBay hotel deal, I predicted to the webjet ceo, that it wouldn’t work because the ebay brand is not known for nor good at travel.
but at least they tried something, like the clichĂ© goes..better to have tried and failed than…