Far too many hoteliers in Latin America have failed to embrace the latest tools for marketing their businesses online. A group of Argentine hoteliers aims to bridge this digital divide by pooling resources.
Argentina’s hotel and restaurant federation seeks to level the playing field in online distribution by debuting a homegrown booking website. Federación Empresaria Hotelera Gastronómica de la República Argentina (FEHGRA), has launched ReservAR Alojamiento, which promotes local, licensed establishments — whether they are affiliated with the association or not.
The move comes as Argentina’s hotel brands risk becoming collateral damage in the online distribution wars. Companies such as Despegar, Google, Booking.com, Expedia, Kayak, Trivago, Tripadvisor, and Ctrip are making inroads into Latin America.
While consumers begin to embrace online booking, many local travel companies remain behind the times in online sales.
The new project from Argentine hospitality leaders aims to bridge that digital divide. It provides digital management and marketing free to licensed hotels, hostels, resorts, cabins, and vacation rentals.
“In research, we learned that around 60 percent of the 17,000 companies in the sector were still not using digital tools as of 2020,” said Fernando Desbots, president of FEHGRA.
Hotels Desire Direct Bookings
The project provides a booking management system that’s a step up from relying on manual spreadsheets or legacy software systems. Reservations are made directly with hotels. The federation doesn’t intervene.
The tools may offer a chance for hotels to increase their direct sales. In Latin America, direct sales are significantly below a desirable goal of at least 25 percent of total bookings, on average, according to the Argentine association.
Direct bookings are desirable for hotels as a cost-cutting measure, eliminating intermediary fees.
“Some of the smaller companies in our market can’t afford to lose the 15 to 30 percent commission OTAs [online travel agencies] are charging, so they were not present in the digital channels consumers prefer,” said Florencia Landivar, FEHGRA vice-president.
Direct bookings also help hoteliers retain the guests who book for repeat visits because they have more digital engagement with the guests.
Harder Than It Looks
The association points out that ReservAR’s goal isn’t to become the next Trivago or Booking.com. It says the project will still be worthwhile even without becoming a significant competitor to the big tech companies.
“What we are doing is leveling the playing field technology-wise between smaller and larger companies — and between those in capital cities and in other places,” Landivar said.
The other part of the project, trying to attract consumer bookings, can be hard for associations to do.
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 embedded the tool, which lets travelers research hotel availability for particular dates. But the project suffers from a lack of broad participation from the sector.
Argentina’s new ReservAR site may similarly suffer from a “which-comes-first,-chicken-or-the-egg” problem. It needs to get many hoteliers to take part if it’s to become attractive for consumers to use. But some hoteliers may be slow to adopt it because it may not deliver many bookings in the early days before consumers discover it in large numbers.
In a hopeful sign, some bigger names are already taking part in ReservAR, including Esplendor by Wyndham, Howard Johnson, DOT Hotels, and Los Pinos Resort and Spa Termal — the only five-star resort in the country.
Helping to promote the site, some local and provincial governments are already in the process of including ReservAR on their tourism promotion sites. FEHGRA is also holding talks and training sessions for hoteliers in its 54 offices scattered all over Argentina. In each one, they will leave a person in charge of helping owners learn how to use the management system and how to market themselves better online.
ReservAR’s lack of consumer reviews or opinions may also disappoint some early users. But adding reviews is a feature being considered.
The association is also working with contacts at Google about how to improve online performance and at metasearch websites like Trivago and Tripadvisor about including ReservAR in their search results. The association is giving regional travel agents a way to book via its system.
Until now, the association’s undertaking has been paid out of its funds. But the hospitality group has a game plan for the website to become self-sustainable.
“We are on the initial stage of gaining critical mass, and we aim to reach about 4,000 establishments by the end of the year,” Landivar said. “We will then try to get on consumers’ radar and increase traffic before looking for sponsors, although some private banks and credit card companies have expressed interest.”
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