1. “The New Normal for Distribution Channel Management”

2. Our expert panel
Carrie Campbell, Director of Lodging, D.K. Shifflet & Associates
Richard Chambers, President, TravelCLICKinteractive
Bill Peters, Vice President of Reservations, Outrigger Hotels & Resorts
Jim Young, Senior Vice President, Global Distribution, InterContinental Hotels & Resorts

3. Today’s agenda Quick overview of the new landscape
Recent findings of consumers trends in online arena
Expert panel to comment on those trends
Summary of recommendations for channel management
Q&A from you

4. Background Continuing Internet growth and influence Economy recovering
Intermediaries consolidating/evolving
Chains taking action
. . . challenges remain!

5. Internet Hotel – U.S.
Growth
&
Share Mix
Hotel Revenue
’ ‘04
13% %

6. The Internet – U.S.
Growth
&
Consolidation

7. Consumer Use of the Internet
Half of online travelers
look online
but book offline.
Source: PhoCusWright,2003 Online Traveler Survey

8. The Economy
An improving economy is a necessary condition for hospitality financial improvement:
Improves occupancy
Provides negotiation leverage
Sets the stage for raising ADR

9. Hospitality Forecast Total US Occupancy Percent
Source: Smith Travel Research

10. Declining Travel Agent Role
Agency
Revenue
($b)

11. GDS Changing Roles
Conglomerate Component vs. Distribution Core

12. Mega Players in the Game
InterActiveCorp
Expedia
HRN (Hotels.com)
Travelscape
Hotwire
TripAdvisor
Ticketmaster
Vacation spot.com
Interval International
Lending Tree
Match.com
WizCom
Trust
Galileo
Cheap Tickets.com
Trip.com
RCI
Hotels
Avis/Budget
Rezoultions/Anasazi
Thisco
Utell
ASP-PMS
TravelWEb.com

13. Biggest Player you may have never heard of Liberty Media Corporation
20% of InterActiveCorp
4% AOL Time Warner
3% Cendant Corporation
55% On Command
100% Starz
42% QVC
50% Discovery Communications (Travel Channel included here)
29% Sky Sports 1,2,3
56% DMX Music
30% the Wireless Group
89% True Position, Inc

14. Orbitz and Priceline, Give me no lifeline
Where all my business is, no one can tell
The .Com's are booking, My RevPar is looking
Like someone has shot it right straight to hell
Wasting away again in Merchant Modelville
Hoping for some …some rooms to be bought
Some people claim, that the web is to blame
But I know, it’s my own damn fault

15. The Major Sites 3 Hotel Companies 20.13 B Top 3 “3rd Parties” 28.21 B
Prices as of noon April 2, 2004

16. Chain Response Chain distribution focus: Web site
Direct connect
Best rate guarantee
Portal strategy
Intermediary negotiations
Property level support:
Strategy – Pricing & Distribution
Systems

17. Key Issues Intense competition for . . . Guest eye share
Guest allegiance & market share
Price and inventory control
Creates opportunities for resorts!

18. “The New Normal for Distribution Channel Management” Carrie Campbell Lodging Group Director D.K. Shifflet & Associates, Ltd.

19. The New Normal: (Overview)
We all know distribution has changed
Room Night/Revenue Share
Who Using the Internet?
How Do We Rate?

20. We All Know Distribution Has Changed:
Hotels
Resorts
D.K. Shifflet & Assoc. Ltd.
(Total Room Nights)

21. Share of Nights ≠ Share of Revenue
Hotels
D.K. Shifflet & Assoc. Ltd.

22. Share of Nights ≠ Share of Revenue
Resorts
D.K. Shifflet & Assoc. Ltd.

23. Bargain Hunting #1 Use of Internet
D.K. Shifflet & Assoc. Ltd.

24. Who Are These People? Resort Website Other Website
All Other Res. Channels
Male
56%
46%
53%
Female
44%
54%
48%
Married
68%
67%
71%
Mean Age
43.5 years
41.7 years
48.0 years
Mean HHI
$90,700
$78,200
$80,200
Att./Grad. College
70%
77%
69%
Emp. Full Time
76%
80%
Prof./Mgr
47%
38%
D.K. Shifflet & Assoc. Ltd.

25. And Why Should I Care About Them?
Resort Website
Other Website
All Other Res. Channels
Avg. # of Trips
4.3
3.3
3.9
Ave LOS
3.1
3.0
2.8
ADR
$125
$113
$120
Avg. Total Bill
$379
$344
$314
D.K. Shifflet & Assoc. Ltd.

26. Guests Are Getting What They Pay For…
D.K. Shifflet & Assoc. Ltd.

27. Summary Most Internet room nights at expense of higher ADR channels
Guests Through Your Website
Travel More
Stay Longer
Spend More
Not all guest experiences are equal
In the long run, that will hurt you
D.K. Shifflet & Assoc. Ltd.

28. Our expert panel
Carrie Campbell, Director of Lodging, D.K. Shifflet & Associates
Richard Chambers, President, TravelCLICKinteractive
Bill Peters, Vice President of Reservations, Outrigger Hotels & Resorts
Jim Young, Senior Vice President, Global Distribution, InterContinental Hotels & Resorts

29. Wrap up: Best Practices for Local Internet Marketing

30. Topics Functional Website Design Search Marketing
Reservations Processing

31. Place the booking engine on the home page
Conversion rates increase dramatically with less ‘click-throughs’.

33. Email Capture on Home Page
Like the booking engine, acquiring addresses for future re-marketing is easier with less clicks

35. Instill Confidence on the Site
Best Value or Best rate clear in the copy
Keep the online consumer at your site rather than clicking to another site

37. Search Marketing Bringing customers to your site
Need to have both organic and pay per click to optimize marketing plans

39. Search Marketing Market your resort by business unit
Horizontal Marketing Approach

40. Horizontal Strategy
Accommodations Restaurants Meetings Golf Spa

41. Reservations Processing
Conversion rates are higher with less clicks

42. Traditional Booking Engine

44. Summary Build Best Practices on the site Best Marketing Practices
Less clicks means more business
Best Marketing Practices
Search Engines
Market by business unit